What is a financial dispute resolution hearing?

Posted onMarch 5, 2021

A financial dispute resolution hearing is a stage in financial court proceedings brought by a husband or wife when you cannot reach a financial settlement by agreement or using non-court alternative dispute resolution methods, such as family mediation.

If a financial agreement is reached at an FDR hearing, the judge makes a binding financial consent order, and the financial application is concluded.

The FDR hearing is a vital part of the financial court process. A successful FDR hearing can save you thousands as you won't have to go to a final hearing of the divorce financial application.

In this blog, our Family Law Solicitors explain what a financial dispute resolution is and how to prepare for the FDR.

Contact our London Divorce Solicitors Today for Expert Family Law Legal Advice.

Appointments are available at our office in London and by phone or online consultation.

What is a financial dispute resolution hearing?

The best way to describe an FDR hearing is mediation by a judge.

A judge reads the paperwork prepared for the FDR hearing and hears submissions (representations made by your Family Lawyer rather than evidence given by a husband or wife). The judge then gives a view on the type of order they think the family court would likely make if the financial settlement application went to a final hearing and another judge decided the financial settlement after hearing evidence from both husband and wife and additional legal arguments.

The FDR negotiations and court hearing take place ‘without prejudice.’ This means any concessions made or offers can't be used in evidence against you or vice versa at the final hearing. You can be open about what you want because you know your bottom line won't be disclosed to the judge at the final hearing. For example, you may want to stay in the family home and get a 50% pension sharing order, but at the FDR, you are prepared to settle for the family home and a 10% pension sharing order, provided you don’t have the expense and uncertainty of attending a final hearing. Your ex may make a counteroffer that you must be prepared to think through.

Time is usually given outside the courtroom to discuss the judge’s indication and see if a compromise can be reached. If an agreement can be reached, the judge will either make a binding financial consent order, or the Divorce Solicitors will prepare heads of terms setting out what has been agreed between you. The terms are also binding but are prepared if, for example, information or agreement from a third party is needed before the court can make the financial consent order.

Like mediation, you can't be forced to settle at an FDR hearing. If an agreement cannot be reached, the judge will list the financial application for a final financial hearing before a different judge who won't see any of the FDR paperwork or read about the discussions at the FDR hearing.

The advantages of settling at an FDR hearing

The advantage of settling a disputed financial settlement at the financial dispute resolution hearing is that you have certainty. A deal is done, and you can get on with your post-separation life even though you may have to wait for the family home to be transferred to you or sold.

Settling at the FDR also saves on:

Money
Time
Stress
Parenting disputes

Going to a final hearing of a financial application can cost a significant amount in legal fees. Your Family Law Solicitors should explain the likely costs so you can weigh the pros and cons of reaching a financial settlement at the FDR hearing.

If a financial application is listed for a final hearing in a London family court, it will likely be many months away. Documents and valuations will all need to be updated before the final hearing, and you will need to have further meetings with your Family Lawyers, who will need to prepare the court paperwork for the final hearing to comply with court rules.

Waiting for a final hearing date can add to your stress. With an agreed financial consent order, you have the certainty of a negotiated deal and do not need to worry that the judge won't agree with your point of view about your staying in the family home or getting a share of your spouse’s pension.

When you are a parent, there is a lot to be said for reaching a financial agreement. A financial settlement can make co-parenting much easier to handle, as you won't have the stress of having a further financial court date looming over you.

Are there any disadvantages of settling at a financial dispute resolution hearing?

The only disadvantage to settling at a financial dispute resolution hearing is regret.

You may regret settling because:

You felt under pressure to settle.
Further information is available about your ex’s financial circumstances.
Your situation has changed.

You may have felt under pressure to settle because of limited money to go to a final hearing or because you felt under time constraints on the day of the FDR hearing. That’s why preparing for the hearing with your Family Law Solicitors is essential so you understand the options and the consequences of agreeing to a financial deal.

If additional information is discovered about your ex’s finances after the FDR hearing, you may be able to reopen the order if you can prove that your ex-spouse didn’t provide full and frank financial disclosure. For example, you may be able to reopen the deal if they didn’t disclose the existence of shares or failed to provide information about an offer received for the family business. The fact that shares increased in value or the company is being sold years after the FDR hearing won't give you grounds to try to reopen the financial consent order.

If your financial or personal situation has changed, you may be able to reopen the financial consent order depending on the terms. For example, if you cannot work due to ill health, you may be able to apply back to court to increase your spousal maintenance payments. You won't be able to do this if you negotiated a clean break financial settlement.

It's normal to wonder if you would have done better at a final hearing rather than settle at an FDR hearing. Preparing for the hearing and drilling down into your options is the best way to avoid regrets, as you will then know that you struck the best deal you could.

The financial settlement court process

To understand the FDR process, you must know how it fits into the financial proceedings. With most financial court proceedings, there are three court hearings:

The first directions appointment hearing (FDA).
The financial dispute resolution hearing (FDR).
The final hearing.

Sometimes, additional court hearings are needed, for example:

To ask for an interim order, such as spousal maintenance. This is referred to as maintenance pending suit or MPS.
To seek an injunction order to prevent the disposal of assets. This is referred to as a section 37 application.
To seek additional directions, for example, permission to instruct a single joint expert on the tax consequences of disposing or transferring assets because tax issues have arisen after the FDA.
To join additional parties to the proceedings, such as a relative who says they have a financial interest in the family home.

The steps from financial application to FDR hearing

The steps in the financial settlement court process are:

The husband or wife starts financial proceedings by issuing an application.
The application is served on you and any relevant third parties.
The court lists a timetable of dates for things to be done by and court hearing dates.
You gather your financial paperwork to prepare your Form E financial document.
You swap Form E’s and paperwork with your husband or wife’s Divorce Solicitors.
Your Family Law Solicitors review your spouse’s Form E and documents.
A questionnaire is prepared to ask any follow-up questions or to ask for more information and supporting documents.
You try to agree on values for key assets, such as the family home or shares in a family business.
You receive a questionnaire and request for additional documents from your spouse’s solicitor.
Your Family Lawyer prepares the key court-ordered paperwork for the first directions appointment hearing, such as a statement of case and Form H.
You attend a first directions appointment hearing at court with your Family Law Solicitors. At that hearing, the judge decides if you must answer all the questions on the questionnaire and provide extra documents. The judge also decides if valuation reports or expert reports are necessary. The judge lists the financial application for a financial dispute resolution hearing after the questionnaires have been completed and the expert reports are available.
Any experts are instructed, generally through a jointly agreed letter of instruction. The court could order a family home valuation, a forensic accountant report on the family business's value and liquidity, or an actuarial report on pension values and pension sharing options.
Your Divorce Lawyer prepares your questionnaire response and reviews your spouse’s reply to the questionnaire and extra paperwork. If the replies are unsatisfactory, an additional hearing may be required.
Your lawyers and you review the experts' reports and financial disclosures and discuss financial settlement options.
Financial proposals are sent to your spouse’s solicitor and received from them. If you can reach a financial settlement, the lawyers draft a financial consent order and ask the court to vacate the FDR hearing.
Your Family Law Solicitors prepare for the FDR hearing. You may be asked to check that your financial position or outgoings have not changed. For example, the savings in your bank account may have been reduced, or your outgoings may have increased since you completed your Form E.
If you are being represented by a barrister at the FDR hearing, a conference/s will be held to discuss what you what to achieve from the FDR and for the barrister to set expectations.
Court rules require your Family Lawyers to prepare various documents, including position statements, a schedule of assets, chronologies, Form H, and other documents.
You discuss the format of the FDR hearing with your lawyer so you are primed and ready to instruct your Family Law Solicitors at the hearing.
Attendance at the financial dispute resolution hearing.

The financial dispute resolution hearing

At an FDR hearing, the judge reads the prepared summaries and key financial documents and then hears submissions from legal representatives. The judge will not usually ask either spouse questions, and you won't be asked to give evidence.

The judge will consider all the documents and submissions and then provide an impartial indication based on their experience of what is likely to happen and be ordered at a final hearing.

The judge’s indication may be similar to your proposal or radically different. For example, you may want to stay in the family home, but the judge may say they think it will need to be sold and how the net equity should be split. Alternatively, you may want spousal maintenance for life, and your ex-spouse may want a clean break order. The judge may indicate that they think a deferred clean break is appropriate, so you get spousal maintenance on a time-limited basis.

Time is usually given for you to consider the indication and for your lawyers to negotiate further with your spouse’s lawyer. The judge may be asked for a further indication, for example, on the amount of spousal maintenance or whether payments should rise with inflation or automatically stop if you live with a partner in a cohabiting relationship.

The judge at the FDR hearing will be keen to help you reach a financial settlement and will spell out the costs and risks associated with proceeding to a final hearing, but the decision to settle is down to you. You can't be forced to do so if you don’t want to accept the indication or your former spouse’s offer. Equally, they can't be forced to accept your offers, however reasonable they are.

Preparing for a financial dispute resolution hearing

Preparing for an FDR hearing can make the difference between reaching a financial settlement or going to a final hearing of the financial application.

Here are our Family Law Solicitors' top tips for preparing for an FDR hearing:

If you haven’t instructed lawyers from the outset, instruct a Divorce Lawyer in advance of the FDR hearing to give them plenty of time to check your spouse’s financial disclosure, ask questions and talk to you about realistic options to achieve a financial settlement at the FDR hearing.
If you think there is a vital missing bit of information, tell your solicitor ASAP so they can assess its potential relevance and advise you on how best to get it.
Check the date of the FDR hearing. The court will typically only change the date if you make an application and there is a good reason, such as ill-health or an operation, and you have medical evidence. Holiday bookings or sudden work commitments are usually insufficient reasons to change the FDR date.
If you want to bring a family member or friend, think carefully about your choice. They will not be allowed into the courtroom but can be at the conference with your Family Law Solicitors or barrister, provided you want them there. Your financial and personal affairs will be discussed, so you want someone close to you who is trustworthy and can support you rather than impose their views on your financial settlement.
Familiarise yourself with where the hearing will take place and how you get there. Allow plenty of time to get through court security.
If you have young children, arrange for child care or after-school collection. While your FDR hearing may only be listed for an hour, the judge may give additional time to negotiate and to agree on the wording of the financial consent order.
Reality-test your proposals and your ex-spouse’s offer. For example, if you stay in the family home, can you afford to repair the boiler and go on holiday, or will it be a struggle to pay the mortgage and bills without allowing for unexpected extras? If you decide to downsize, what are all the hidden costs, such as stamp duty and removal costs? If you downsize, will your outgoings increase because of a longer commute to work? How will you fund your retirement if you don’t take a share of your ex’s pension?
Remember to ask your Family Lawyer questions before the FDR hearing so you have answers and can determine what you are prepared to settle for.
If you need information from third parties, try to get it before the FDR hearing. For example, if you are waiting for confirmation of a mortgage offer, clarification of mortgage interest rates, eligibility for tax credits, or an anticipated increase in nursery fees. Get the third party to write the information so it can be disclosed before the FDR hearing.
Come prepared to negotiate at the FDR. While you won't need to give evidence, you must tell your Divorce Solicitor what you think of the judge’s indication and your ex-spouse’s proposals.

Reaching a financial agreement at the financial dispute resolution hearing

If you can reach an agreement at the financial dispute resolution hearing, the judge will either:

Make a financial consent order.
Record the terms of the agreement on the basis that the Family Law Solicitors will then submit a financial court order in accordance with the terms.

If a financial settlement is reached at the financial dispute resolution hearing, you won't be able to change your mind later. That’s why it is best that you have a family solicitor with you at the FDR hearing as they can protect your interests because whilst you will want to reach a financial settlement, it should be one that you are comfortable with and understand the short and long-term consequences.

Court orders if you cannot agree on a financial settlement at the FDR hearing

If you can't reach an agreement at the FDR hearing, the judge will give further directions to ensure the financial application is ready for a final hearing. For example, the judge could order:

Updated or additional asset valuations.
Statements by you or your spouse.

The judge at the FDR will ensure the final financial hearing is listed before a different judge so that the judge at the final hearing doesn’t have preconceived views.

After the FDR hearing, your solicitors will continue to negotiate with your spouse’s lawyers and try to negotiate a financial settlement to avoid the costs and risks of going to a final hearing.

Reaching a divorce settlement at the financial dispute resolution hearing

Most Family Lawyers say that it is best to go to a financial dispute resolution hearing with the hope of reaching a divorce settlement, but not at any price. That’s because a judge’s indication isn’t necessarily what a judge at a final hearing would order. You could potentially do better, or you could do worse.

That’s why it is essential to have legal representation by a specialist Divorce Solicitor at the FDR hearing to give you the best chance of settling the financial application on terms acceptable to you without the stress and economic implications of a contested final hearing.

Contact our London Family Law Solicitors Today for Expert Family Law Legal Advice.

Appointments are available at our office in London and by phone or online consultation.

Our lawyers speak Arabic, Armenian, Farsi, French/Mauritian Creole, Spanish, Tamil Tagalog/Ilonggo, and Urdu/Punjabi.

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