What to expect at a Financial Dispute Resolution appointment (FDR)

A financial dispute resolution (FDR) appointment is the second court hearing that a separating couple will attend when resolving their finances as part of a divorce or the dissolution of a civil partnership in court proceedings.

Before the FDR, the separating couple will have attended a first appointment, which is the first court hearing in court proceedings. At that hearing, the Judge will consider what further information is needed from the separating couple to progress with the case. For instance, a property may need to be independently valued if the separating couple can’t agree on its value or the Judge may order a pension report to be obtained if the separating couple are considering pension sharing.

Purpose of an FDR

An FDR is the best opportunity for the separating couple to try and agree a financial settlement through negotiation. Prior to an FDR, full financial disclosure should have taken place and if one party has business interests, the court may also have ordered a business valuation. Once all disclosure has been obtained then the separating couple should have also exchanged ‘without prejudice’ proposals for settlement.

FDR negotiations take place on a ‘without prejudice’ basis — meaning that the settlement proposals put forward by each spouse can’t be disclosed at any further hearings and they won’t be held to the proposals they put forward.

If the separating couple can’t agree on a financial settlement, the case will progress to a final hearing. The Judge at the final hearing must be different to the Judge at the FDR, so they’ll be unaware of the offers put forward by the separating couple.

What happens on the day of the FDR?

The separating couple will attend a court hearing together with their respective legal representatives (if appointed). While some FDR hearings may take place virtually, most remain in-person at a court building.

Usually, the separating couple’s legal representatives meet an hour or so before the FDR hearing to try and see if an agreement can be reached. At court, each spouse will often be seen seated in a small meeting room at the building with their legal representatives meeting in the court’s corridors to discuss options for settlement before returning to their respective clients to take instructions and subsequently reconvening.

When the Judge has considered and read the relevant paperwork submitted by the respective legal representatives of the separating couple, the separating couple and legal representatives will attend the court hearing. Each legal representative will then set out the reasons behind their client’s settlement proposal and summarise the proposal to the Judge for their consideration. Importantly, evidence will not be heard at the FDR — so the separating couple aren’t permitted to provide a statement to the court in support of their proposal.

Once the Judge has listened to both settlement proposals, they may ask further questions to the legal representatives before giving an indication as to what they consider is likely to happen at a final hearing if the case doesn’t settle that same day. The judge may favour one party’s position over the other, on various points in dispute. After the Judge has given an indication, the separating couple will leave the hearing with their legal representatives and continue negotiations. 

The Court cannot impose an order on the separating couple at the FDR without the consent of both parties as the Judge will not have heard any evidence nor made any findings. The separating couple may try to reach an agreement through compromise at the FDR to avoid the cost and stress of a final hearing.

Once further negotiations have taken place, the separating couple will return to the court hearing with their legal representatives, who’ll update the Judge on their negotiations. The legal representatives will confirm whether or not a settlement has been reached. If an agreement has been reached, the legal representatives will draft a final financial order by consent, which will then be approved by the Judge. If a settlement hasn’t been reached, a final hearing will be listed where the Court will hear evidence, make findings and impose a Judgment. 

When can an FDR be dispensed with?

Under rule 9.15(4) Family Procedure Rules, the court must direct an FDR unless there are exceptional reasons that make an FDR inappropriate, or the first hearing has been treated as an FDR.

Historically, the court may have been persuaded that an FDR would be a waste of its time and legal costs if the parties’ positions were polarised. However, dispensing with an FDR is now rare and the Court is generally reluctant to do so. Judges adopt different approaches to timetabling to give the FDR the best prospects of success. For example, the parties’ witness statements (section 25 statements), additional expert evidence or the filing and serving of statements on a concise point in dispute could be ordered prior to the FDR as opposed to after the FDR.

The Court’s approach in dispensing with the FDR has recently come under scrutiny from Mr Justice Peel in the recent case of GH v GH. The Judge at first instance dispensed with the FDR for two reasons:

• There was an ongoing factual dispute about the wife's earning capacity.
• The wife's position hadn’t crystallised to enable the FDR process to be successful.

On appeal, it was found that the FDR shouldn’t have been bypassed, with Mr Justice Peel commenting that it’s an “integral part of the Court process”, “it is very hard to envisage a situation where the FDR should be dispensed with” and its “value has been proved time and time again”.

Mr Justice Peel gives clear direction that cases which fall into the ‘exceptional reasons’ category are likely to be few and far between. In most cases, the court will be able to provide a firm steer. Indeed, in cases where the parties’ positions are opposed, the Judge’s observations can be invaluable. They provide the parties with an independent view of their case and whether any particular points or arguments are likely to find favour with a Judge at trial. 

Non-court dispute resolution

It’s possible that full involvement in a form of non-court dispute resolution (NCDR, also known as alternative dispute resolution or ADR) — such as a private FDR or roundtable settlement meeting — would fall into the ‘exceptional reasons’ category.

The benefits of a private FDR are akin to those of a court FDR but with the added benefits of Judge selection, venue selection and speed of listing. 

Find out more about our NCDR options. Our trusted and award-winning family law team has a wealth of experience as both participant and tribunal in using NCDR to ensure the best route to resolution for any family law issue.

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