Our litigation team recently assisted clients in settling a prickly ongoing property and will-related dispute via a Financial Dispute Resolution hearing at court.

Financial Dispute Resolution (FDR), while often seen in family proceedings, is now being seen more widely, including in proceedings relating to estates and wills.

It is worth solicitors, parties and barristers considering at an early stage whether an FDR hearing may help in resolving a dispute faster than would be the case if that case went to trial. If so, it is an idea that can be proposed to a judge at a directions hearing.

It may be particularly suitable in cases where one or both of the parties is taking an entrenched position and seems very confident that the outcome at trial would go in their favour.

What Happens at a Financial Dispute Resolution Hearing?

To some extent, this will depend on what order for FDR is made by the judge. Generally, the order will be that the FDR will be “without prejudice”, enabling the parties to speak freely to each other and the judge at the hearing, without the fear this will be used against them at trial.

In most cases, the judge sitting for the FDR hearing will not be able to impose a decision on the parties but could indicate what he would expect to be ordered at a final hearing. A judge will usually, with that indication, send the parties away to negotiate for a period, before returning to update him on their progress. There is no formal witness evidence required to be produced and no cross-examination of witnesses, although the parties having some witness evidence or indication of likely witness evidence may be useful.

The judge is also permitted to see prior without prejudice negotiations between the parties, and so can also garner some understanding of the parties’ likely exposure on costs. At the end of the hearing, the judge must return all documents to the parties (whether the hearing was successful or not) and can have no further dealings with the matter.

How To Arrange An Financial Dispute Resolution

In a case with which we were recently involved, an FDR was proposed by our clients’ legal team at a prior hearing. The judge considered this a sensible suggestion, and listed an FDR.

Part of the thinking behind making the suggestion was that there had been several without prejudice offers made on the case, and one in particular that had come very close to ending the dispute.

It was perceived that barriers to settlement were a lack of trust between the parties, and a stark difference in how they perceived the law and the likely outcome at trial. If those could be overcome, we and our clients thought a settlement was possible and potentially beneficial for all parties.

Pros and Cons of Financial Dispute Resolution

The parties being able to “test” their positions before a judge can be very useful in circumstances where one party has been adamant that they considered themself and their legal position correct. A judge informing a party that they would have a major uphill battle successfully at trial understandably resonates more than being told that by an opponent’s lawyers. This is also an advantage an FDR has over mediation – whereas mediators often (properly and as taught by mediation providers) do not venture any view whatsoever on the law, an FDR judge expressly tells the parties how he sees the merits of the case.

Similarly, the judge sending the parties out to a waiting room (and agreeing to book two for the day is a good practical tip for parties/solicitors dealing with an FDR) to return and update him on negotiations at a certain time, can focus the minds of the parties.

With regard to timing and certainty, we have found that having an FDR hearing listed by the court holds an advantage over trying to negotiate a date, location and mediator for mediation. It effectively compelled the parties to attend court on the day listed or be in breach of a court order, rather than giving them a time window in which to mediate when one of the parties may have said they found it impossible/inconvenient to do so.

Finally, FDR is also generally cheaper than mediation as the parties do not have to pay a mediator’s fee or for venue hire for a day (save for possibly booking meeting rooms at court)

Nevertheless, it is worth bearing in mind that the parties still have to be willing to listen and compromise for a settlement to be reached. The judge is highly unlikely to state that one party will categorically succeed on a claim or defence (and it will not ultimately be that judge who hears the trial in any event). Time is also shorter than at a full day mediation (and a judge will not stay until midnight for the parties to continue negotiating)!

However, there is nothing to stop the parties subsequently mediating or engaging in further negotiations if progress is made at an FDR but settlement is not reached.

Conclusion

FDRs have their place within dispute resolution outside of purely family proceedings, and are another useful tool for dispute resolution lawyers to think about when advising their clients.

If you are considering whether an FDR hearing would be suitable for the dispute you are involved in, or if you have been directed to attend one and are without representation at present, please do give us a call on 01384 340340 and ask to speak to contentious probate lawyers, Liam Owen (01384 340551 / lowen@georgegreen.co.uk) or Rachel Humphries (01384 340506 /  rhumphries@georgegreen.co.uk). We would be happy to discuss matters with you, and to assist you at the FDR if you wish.