The Financial Dispute Resolution Appointment (FDR) is the second court hearing that a separating couple will attend if they are resolving their finances in connection with divorce or 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 the court proceedings. At that hearing, the judge will consider what further information they need from the separating couple in order to progress with the case. For instance, the judge may require property to be valued if the separating couple cannot agree on the value of the same, or, the judge may order a pension report to be obtained if the separating couple are considering pension sharing.
The purpose of the FDR
The FDR is the best opportunity for the separating couple to try and agree a financial settlement between them through negotiation.
Prior to the FDR, full financial disclosure should have taken place. For example, if it was appropriate in that case then valuations of property should have been obtained, an actuary should have provided a pension report and the separating couple should have asked questions about the other spouse’s financial disclosure if there was anything that was unclear about their financial position. If one person has business interests, then it is possible the court may have also 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, this means that the settlement proposals put forward by each spouse cannot be disclosed at any further hearings and they will not be held to the proposals they put forward.
If the separating couple cannot agree a financial settlement, then the case will progress to a final hearing. The judge at the final hearing cannot be the same as the judge at the FDR and they will therefore not be aware 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). Since Covid-19, some FDR hearings may take place online (e.g., through Microsoft Teams), but many hearings still take place at 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 of the building with their legal representatives meeting in the court’s corridors discussing options for settlement before hurrying back to their respective clients to take instructions and then reconvening back in the corridors for negotiations.
If the FDR takes place remotely, then the separating couple’s respective legal representatives can still try to call one another to start negotiations prior to the FDR beginning.
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, meaning that the separating couple will not be permitted to provide a statement to the court, supporting their proposal.
After the judge has listened to both settlement proposals, they may ask further questions to the legal representatives if they have any queries. The judge will then give an indication as to what they consider is likely to happen at a final hearing if the case does not settle today, based on their experience (e.g. cases they have dealt with and also legal principles). The judge may favour one spouse’s position over the other, this is often referred to as a ‘positive indication’.
After the judge has made an indication, the separating couple will leave the hearing with their legal representatives and continue negotiations. The spouse that has received a positive indication may be less inclined to move too far from their negotiating position and conversely, the spouse that hasn’t received a positive indication may be inclined to move towards the other spouse’s proposal. However, ultimately, a judgement cannot be imposed on the separating couple at the FDR without consent of both spouses and the spouse that hasn’t received the positive indication at the FDR may take the risk of attending a final hearing with the hope that a different judge will consider the case differently and the outcome will be more favourable to them. Alternatively, both spouses 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 will update the judge on negotiations. The legal representatives will confirm whether or not a settlement has been reached. If an agreement has been reached, then the legal representatives will draft a final order which will then be approved by the judge. However, if a settlement has not been reached then a final hearing will be listed. If an agreement is not reached between the spouses at a final hearing then the court can make a final order which will be binding on the separating couple.
If you would like to know more about the court proceedings relating to finances on divorce or the dissolution of a civil partnership then please do not hesitate to contact a member of the family team.
