What is a Private FDR and are they effective?
Changes to the Family Procure Rules (FPR) that came into effect in April 2024 surrounding Non Court Dispute Resolution (NCDR) have led to an increase in out-of-court settlements in family law cases. The reforms aim to reduce the burden on the Court system and promote amicable resolutions, particularly concerning financial disputes and arrangements for children.
Whilst there are several NCDR options, Private Financial Dispute Resolution (FDR) appointments are an increasingly popular method for resolving family law cases in the UK and one that the Family Team at Pearson Hards frequently endorse. They offer a confidential, flexible and faster alternative to Court based proceedings.
What is a Private FDR?
A private FDR is a form of alternative dispute resolution that closely mirrors the Financial Dispute Resolution hearing within the formal Court process but occurs outside the Courtroom and is voluntarily arranged by the parties. Instead of a judge, a private FDR is presided over by a neutral expert, often a retired judge, barrister, or senior solicitor with extensive experience in financial law.
The goal of a private FDR is not to impose a decision, but to help the parties reach a mutually agreeable settlement by the judge providing their opinion on what a reasonable settlement might look like. This opinion is not binding, but it serves as a powerful incentive to settle. Because the judge is usually highly respected, their view can help bridge the gap between opposing positions. If an agreement is reached, it is formalised into a binding legal document.
Benefits of Private FDRs
Several factors contribute to the high success rates of Private FDRs.
Expedited scheduling: Unlike Court FDRs, which can involve significant delays of many months, private FDRs can be arranged quickly, sometimes within weeks, reducing the emotional and financial strain on the parties, as well as their legal fees. The parties will also be able to choose the date and location for the hearing.
Expertise of the private Judge: Parties can select a judge with specific expertise in family law and financial disputes, ensuring that the FDR hearing is as efficient and effective as possible.
Enhanced Preparation: In a private FDR, an agreed bundle and the parties’ submissions are sent to the judge days before the hearing, enabling the judge to spend time familiarising themselves with the details of the case. This contrasts with court-based FDRs, where judges may not receive the bundle until the day of the hearing and will hear this case along with various others. The private FDR Judge will be available to deal with one case for the whole dat.
Voluntary Participation: The voluntary nature of private FDRs indicates a mutual willingness to negotiate and settle, which can lead to more amicable resolutions.
Costs: While private FDRs involve costs for hiring a private judge—typically ranging from £2,000 to £5,000 plus VAT for the Judge for a one-day hearing (including their preparation) —these expenses can be offset by the savings from avoiding prolonged litigation and multiple court hearings.
Conclusion
Private FDRs have demonstrated high settlement rates, making them a compelling option for resolving financial disputes in family law cases. Their efficiency, flexibility, and the ability to choose a judge with relevant expertise contribute to their effectiveness. While they involve upfront costs, the potential for quicker, amicable resolutions often justifies the investment.
Several surveys carried out by law firms and family Courts, suggest that pFDRs are highly effective in facilitating settlements, often more so that traditional Court bases FDRs.
If you would like to discuss a Private FDR with any of our Family team, please contact Emma Rothstein or Chloe Langdon on 0208 949 9500.