A Financial Dispute Resolution hearing, or FDR, is meant to be the point in a divorce financial settlement where everything comes together, and the dispute settles, saving everyone the stress and cost of a full court hearing. However, more often than not, it does completely the opposite. Court based FDRs face considerable delays to get a hearing, and when a case is heard, limited court time often means it is too rushed to be constructive. Private FDRs come with an expensive bill that many people can well do without. If you are heading towards an FDR, it is worth understanding these problems before you part with any money.
What is Financial Dispute Resolution?
When a couple cannot agree on how to divide their finances and one of them applies to court, the case usually moves through three stages. The first sets out what information is needed, including a financial disclosure from each party. The second stage is the FDR, a formal hearing before a Judge, who, after hearing a summary presentation from both sides gives an “early neutral evaluation” of the likely outcome if it were to proceed to a final hearing. The third stage, if it comes to that, is the final hearing, where a Judge imposes a decision.
An FDR is held on a without prejudice basis, meaning the offers and discussions that take place cannot be raised later if the case proceeds to a final hearing. The Judge reviews the presentation papers, hears the case from both sides, and gives an indication of what a court is likely to order. That steer can be enough to unlock an agreement, which is why, when used correctly, most cases settle at the FDR stage or soon after.
The Problem with Court Based Financial Dispute Resolution
The trouble is that the family courts are stretched to breaking point. Getting a court FDR listed can take many months, and in some areas a year or more, on a date you have little say over. Court based FDR hearings are also prone to last-minute cancellations, with further considerable delays before the case can be relisted. Those delays and cancellations have added cost implications. Valuations of the family home, business accounts and pension reports go out of date while you wait, all of which will have to be redone before the hearing can go ahead. None of this comes cheap either. The work leading up to a court FDR, your solicitor’s time plus a barrister to represent you on the day, commonly runs to thousands of pounds, often £3,000 to £5,000 plus VAT, with counsel’s fee on top. And when the day finally arrives, the judge may have had very little time to prepare, and very limited court time allocated (typically 1 hour) to hear your case, meaning the indication you receive can be thin and non-committal. An FDR used that way is unconstructive and settles nothing. Instead of a clear steer that brings both sides together, you get a vague one, and the case rolls on towards an expensive final hearing.
The Problem with Private FDR
Faced with limited court time, delays, and a prospect of last-minute cancellations, many people are told the answer is a private FDR. It does the same job but outside the court system: the two of you jointly appoint an experienced financial remedy specialist to act as your evaluator; they read the papers in advance, and they give you a proper, considered indication with a full day set aside for your case. It is quicker, private, and the evaluation is usually more considered than anything an overstretched court can offer.
But it often comes with higher costs. The private evaluator’s fee for the day typically runs from around £3,000 to £7,000 plus VAT, depending on where you are based, how senior a specialist you appoint, and how complex your finances are.
That is on top of paying your own solicitor and barrister to prepare for the day and attend the private FDR. The fee is normally shared between the two of you, which softens the blow, but there is no getting away from the fact that you are paying a premium for a service the court is supposed to provide. For couples of modest means, or where the sums in dispute are not large, that cost can be hard to justify.
How Do You Avoid Wasting Money?
The honest answer is to treat a hearing, court or private, as something to prepare thoroughly for and, where you can, to avoid needing at all. Most of the money in a financial case is spent in the run-up to hearings, so the more you can settle without one, the less the whole thing costs.
That usually starts with getting full and honest financial disclosure from both sides early, so everyone has a clear picture of what needs to be divided.
From there, solicitors can often close the distance through negotiation, or you can use another form of non-court dispute resolution. Family mediation is usually the lowest-cost option and works well when both of you are willing to talk. Collaborative law is another option, as is arbitration, where a qualified arbitrator makes a binding decision. However, arbitration still calls for the same barristers and preparation as a final hearing, so it is not always the cheapest alternative dispute resolution (ADR) route.
Since April 2024, the court rules have expected couples to consider these routes seriously, and a party who refuses to engage without a good reason risks a costs penalty.
Handled well, these ADR approaches can get you to a fair settlement without either the court’s delays or the private evaluator’s fee.
Advantages of Private Financial Disputes Resolution
In some cases, private FDR is a suitable option. Where negotiation has stalled, where the assets are substantial or complicated, and where both of you are willing and able to share the cost, paying for a first-rate indication can be the very thing that breaks a lengthy and more expensive deadlock. Set against the far greater cost of a contested final hearing, the fee can be money well spent. The point is not to rule it out, but to use it deliberately, when it is the right tool, rather than defaulting to it because the court has let you down.
Speak to Our Family Law Solicitors
At O’Donnell Solicitors, our family law team helps people across Saddleworth, Oldham and the surrounding area sort out the finances on divorce in the way that makes the most sense for them, keeping paid hearings to the minimum your case needs. We will tell you honestly when a private FDR is worth the outlay and when your money is better spent settling another way. Obtaining advice at an early stage helps you understand where you stand, identify potential issues before they become disputes and work towards a fair financial settlement that reflects your own circumstances.
Our family law solicitors are accredited members of Resolution and we are committed to the Resolution Code of Practice, promoting a constructive approach to family issues that considers the needs of the whole family. Whatever your circumstances, our team is here to guide you through the process with clarity, sensitivity, and practical advice. Get in touch with us today for a confidential discussion about your circumstances.
For further related information, you may find the following blogs useful:
- Financial Settlements in Divorce: How Are Assets Divided?
- Inherited Property in Divorce: When Does it Stop Being Yours?
- How are Pensions Split on Divorce? Pension Sharing Orders Explained
- A Fresh Start After Divorce: Practical Steps to Help You Move Forward
- Divorce and Business Owners: Navigating the Legal Landscape
- Financial Abuse in Marriage