Can parties proceed directly to a final hearing and bypass their attendance at a financial dispute resolution hearing? – A cautionary note to practitioners.
Mr Justice Peel was recently asked to consider this narrow but crucial point in the recent case of GH v GH (Rev1) [2024] EWHC 2547 (Fam) (03 October 2024) in the High Court, which has served to highlight the importance of parties fully engaging with the financial dispute resolution hearing.
The Court was asked to consider whether parties currently engaged in contested financial remedy proceedings could dispense with attending the FDR hearing and proceed straight to a final hearing. In short, Peel J confirmed it was only possible in “exceptional” circumstances as set out in FPR 9.15(4)(b).
The judge overturned an earlier decision by a first instance judge where the financial dispute resolution hearing was dispensed with as there (a) a factual dispute about the wife’s earning capacity, and (b) her position was not fully formed, to the extent, it was considered that the FDR would be ineffective. Peel J rejected this view and re-affirmed a long-held view that the FDR is an “integral part” of the court process, which facilitated settlements in a significant number of cases, both complex and straightforward in nature.
The benefit of attending and engaging at the FDR hearing (Court or private FDR) is not to be undermined. It holds special status as a “without prejudice” hearing and often, in our experience, may be the first time each party receives an independent and impartial assessment of the likely outcome, if their matter were to proceed to trial. The parties can benefit from receiving a firm steer by an experienced judge, who will indicate whether any proposals are reasonable or not and can also deal with factual issues, such as earning capacity, or ring-fencing, matrimonial and non-matrimonial assets, by expressing a view on how they are appear based on the available evidence and how relevant they are.
There will of course be times where an financial dispute resolution hearing is not suitable, but this is likely to be in very limited circumstances, such as a complete lack of engagement or non-attendance at court hearings. In the above case, Peel J allowed the appeal and directed a court FDR and for without prejudice offers to be exchanged.
Due to judicial availability and Court backlogs, private FDRs are becoming increasingly popular as means to assist divorcing couples to resolve the issues between them. Whether you are in contested court proceedings or trying to reach an agreement outside of court, the court does expect both parties to make robust attempts to resolve their finances, by making offers and engaging in Non-Court Dispute Resolution, such as mediation. This can save time, costs and stress of ongoing litigation and a failure to do so may result in cost penalties for the defaulting party.
Link to the Judgement – https://www.bailii.org/ew/cases/EWHC/Fam/2024/2547.html
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