FDR Hearings – The Process

What is an FDR?

The FDR hearing (or Financial Dispute Resolution Hearing) is generally the second hearing that takes place once a party has made an application for a financial remedy as part of divorce proceedings.

The purpose of the FDR hearing is to facilitate and explore settlement negotiations between the parties, in the hope that an overall agreement can be reached and costly further litigation avoided. 

The FDR judge will not be permitted to continue with the case following the conclusion of the FDR if the case has not settled, and a new judge will be appointed for the final hearing.

What to do before the FDR

In order for the FDR to be used as an effective forum for settlement, the financial disclosure process must be complete. In other words, both parties should be comfortable that they have a full and detailed understanding of the other’s financial circumstances.

If full disclosure has not taken place, or one party considers that the other has failed to disclose an accurate picture of all of their financial affairs, it can be difficult for settlement discussions to be effective; both parties need to feel that they have the “full picture” in respect of the family finances to as great an extent as possible. Further, the parties legal representatives will be unable to advise them as to what a suitable settlement might look like without the full financial picture.

In addition to disclosure having been dealt with, in the lead up to the FDR hearing, the parties should exchange without prejudice proposals for settlement. These proposals will essentially represent the parties’ starting point to the settlement negotiations.

What happens at the FDR hearing

On the day of the FDR, the parties, together with their respective lawyers, usually attend court at least an hour before the hearing is listed. This allows the barristers to begin the negotiation process and make the most of having the parties together under one roof to negotiate.

Generally the parties and their legal teams will be seated in separate meeting rooms within the court building. This means that in practice, the barristers will disappear for discrete chats in the court building’s corridors, relaying their respective client’s instructions before returning to report back.

The hearing may not begin at the exact time it is listed. This is because a judge often has several cases in their list, and the parties must wait to be called in by the judge’s clerk. This waiting time can be used to progress the negotiations, although at this point the parties will not have had the benefit of the judge’s input in their case.

Once the judge is ready, the parties and their legal representatives will be called into court. Both parties’ barristers will make submissions to the judge, setting out the reasons and legal basis on which they consider their client’s position to be a suitable outcome in the case. No other evidence is heard at the FDR and the parties themselves will not have to give evidence or be questioned; all of the talking is left to the barristers and the judge.

After the judge has heard from both barristers and any questions he/she may have had have been dealt with, the judge will give an indication as to what he/she believes is an appropriate outcome in the case and what he/she would order were the case to proceed to a final hearing.

The judge may favour one party’s position to the other’s, or their indication could be based on an amalgamation of both of the parties’ positions; it will ultimately based on the judge’s experience of dealing with numerous financial cases, and on the relevant case law.

Following the judge’s indication, it is usual for him/her to ask the parties to return to the courtroom at a set time later that afternoon in order for him/her to hear how the negotiations are progressing. The barrister-led negotiations will then re-commence outside of the courtroom in an attempt to narrow the gaps between the parties, but this time with the benefit of the having heard the judge’s opinion on the case.

These negotiations can go on all day, with the parties making further proposals and counter-proposals to reach an agreement.

What happens after an FDR

In the event that the parties are able to agree a settlement on the day of the FDR, the barristers will draft a final order which can then be approved by the judge.

If a settlement cannot be reached, the judge will list the case for a final hearing, usually many months away. However, the conclusion of an unsuccessful FDR does not mean that the without prejudice negotiations cannot continue; it is sensible for the parties to continue to work to reach a settlement between them in order to avoid the costly exercise of going to a final hearing

By the time of the FDR, the parties will normally have provided written answers to questions and any expert evidence will have been produced.

The aim is for the parties and the court to have a relatively clear idea of the family’s financial situation. Also, each party should have made at least one ‘without prejudice’ offer to settle the case. A without prejudice offer is usually in the format of a letter and sets out the terms on which the sender is prepared to settle the case.

It is without prejudice, meaning that it cannot be shown to the court at any hearing other than the FDR. The idea is that parties may be prepared to make greater concessions ‘off the record’ than they otherwise would.

The FDR is a court hearing, presided over by a judge but rather than making decisions about the outcome of the case, the judge instead offers guidance as to the range of likely settlements that might be imposed if the case were to go all the way and end in a final hearing. The judge should have been given comprehensive information about the family finances and details of each party’s without prejudice offers.

He or she will listen to each party’s legal representative (or the parties themselves if they are self-represented), consider their assessment of the facts of the case and the reasoning behind their without prejudice offer.

The judge will then offer guidance as to what might happen if the case were decided at a final hearing.

This is only an opinion but it is the opinion of someone who deals with (and decides) similar cases all the time.

After the judge has given this opinion (known as an “indication”), the parties and their solicitors and/or barristers are given some time to enter into negotiations.

This can take a variety of forms and can sometimes take many hours while revised offers are made and considered. Sometimes the parties and their representatives may come back before the judge to report on what progress has been made and further guidance might be given at this stage.

If an agreement is reached, then the terms will be reported to the judge who will consider whether they are fair in all the circumstances. Provided the judge approves the agreement, then it will be converted into a written consent order either there and then or via email/letters over the following days or weeks.

If the parties do not reach an agreement, then the judge will either schedule a further FDR or set the case up for a final hearing.

Because the FDR involves the presiding judge hearing the parties’ without prejudice or ‘off the record’ offers, that judge cannot take any further part in the case, other than to preside over another FDR.

 

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