If you are getting divorced or dissolving your civil partnership, there is a good chance that there will need to be some fairly detailed discussions between you and your partner about the financial aspects of your split. A financial settlement can be worked out in many different ways. Some couples will reach agreement privately and only instruct a solicitor to ensure that the agreement is converted into a properly worded consent order to ensure that it is final and binding. Others will take advantage of the growing number of options for non-court dispute resolution. This can include processes such as mediation, round table meetings, collaborative law and arbitration.

In some cases, however, the only option to resolve financial disputes will be to make an application to the court. The court process has been designed with the specific aim of helping as many couples as possible settle their disputes without the need to go through a contested final hearing, which can be extremely stressful and very expensive in terms of legal fees. The lynchpin of this process is a court hearing known as a financial dispute resolution appointment or FDR for short. Let’s take a closer look at what an FDR is like and the sort of preparation that goes into it.

The Form E

When someone who is getting divorced or dissolving their civil partnership makes an application to the court for a financial order, the court will set a date for the parties to exchange financial information in a document known as a Form E. This document – not dissimilar to a tax return but with a different focus – provides a framework for producing complete details of your assets, liabilities, income and expenditure and other relevant information. Various pieces of documentation (such as bank statements) are needed to back up the information in the form. After the forms have been exchanged, each party has the opportunity to ask written questions of the other to clarify information within the Form E and/or provide further relevant documents.

The first appointment

The court will also set a date for a hearing called a first appointment. This is best thought of as a “housekeeping” hearing. It is a relatively formal occasion but the judge cannot make any final decisions as to the nature of the financial settlement. Instead, he or she will look at the financial information the parties have already exchanged (i.e. in their Form E financial statements), consider the written questions the parties have asked each other and decide whether they are necessary and proportionate. He or she will also decide whether any further evidence is needed, such as valuation reports about any properties or businesses in which the parties have an interest. Dates will be set for the answering of the written questions and production of any valuation reports.

The FDR

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.

This brings us neatly onto what is so special about an FDR. It 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.

Prospects of reaching a settlement

We tend to find that a significant majority of our cases settle either at or in the weeks shortly after an FDR. The judge’s indication can be a very powerful incentive to people to abandon arguments that would be unlikely to succeed at a final hearing and the whole experience can be a bit of reality check for everyone. In most cases the judge will also give a stark warning as to what further costs may be incurred if the case does not settle soon. Again, this exerts pressure on everyone to think pragmatically and consider whether certain points of principle are really worth pursuing when measured against the commercial reality.

Real life experiences

All family law solicitors will have stories about long FDRs. I think we have all had the experience of going between the parties’ respective consultation rooms and bumping into cleaners vacuuming the court building, long after official closing time. Sometimes, everyone gets kicked out of the court building and further discussions will take place in one party’s solicitors’ or barristers’ offices or even a café or public house (although those last two have never happened to me!) Whatever the venue, everyone can become very invested in the process and, often, everyone simultaneously comes to the realisation that this dispute has to end…today! In some cases, it becomes very clear that progress is not going to be made for a variety of reasons and the most sensible course is to politely bring an end to the discussions and start preparing for a final hearing.

There are as many variations on the experience of a FDR as the imagination will allow but some common features are:

• progress in negotiations being made at a pace that simply was not possible before
• an increased pace of progress after everyone has heard the judge’s indication
• long, tiring days and frequent visits to the court café or vending machine
• a real sense of achievement if and when a settlement is reached that everyone can live with