If ever there were any doubts as to the importance of the FDR appointment and the parties’ attendance at one, then Mr Justice Peel has unequivocally put those doubts to rest in his judgment in GH v GH [2024] EWFC 272, published on 3 October 2024. The court’s ongoing focus on assisting parties to resolve financial remedy proceedings in a timely and proportionate manner means that FDRs (including private FDRs) are, perhaps unsurprisingly, still receiving significant praise and judicial support.

The facts

In the Family Court, the judge had dispensed with the FDR appointment and directed that the case proceed straight to a final hearing. The judge had done so for two reasons: (i) there was an ongoing factual dispute about the wife’s earning capacity; and (ii) the wife’s position had not crystallised so as to enable the FDR process to be successful.

The judgment does not set out the facts of the case as it supplements the appeal judgment which was given ex tempore, but Peel J decided to commit to paper his reasons for overturning the judge’s decision on what he described as a ‘narrow but important point’. Having allowed the appeal Peel J directed that parties attend a court FDR and ordered the parties to file without prejudice offers in advance in the usual way.

FDRs

Peel J could not have been more emphatic in expressing his support for the FDR process describing it as an ‘integral part of the court process’ and that ‘anecdotally it facilitates settlement in a significant number of cases’. As he stated, ‘[i]ts value has been proved time and time again’.

He referred to the Family Procedure Rules 2010 as a reminder to all practitioners of the centrality of the FDR to the process:

By FPR 9.15(4)(b)

‘(4) The court must direct that the case be referred to a FDR appointment unless—

(a) the first appointment or part of it has been treated as a FDR appointment and the FDR appointment has been effective; or

(b) there are exceptional reasons which make a referral to a FDR appointment inappropriate.’ (Highlighting by Peel J)

Peel J was clear that ‘under (b) the words “exceptional reasons” need no gloss or interpretation’.

He also highlighted para 6.1 of PD 9A:

‘A key element in the procedure is the Financial Dispute Resolution (FDR) appointment.’

The judgment also noted that the parties had not attempted any form of ‘Non-Court Dispute Resolution’.1 Whilst it is unlikely that the judge’s view would have been any different if that had been the case (unless the parties had perhaps undertaken a private FDR), it is significant that the judgment makes clear an FDR is more pressing in such circumstances.

Application

So, what does this mean for cases in which factual disputes and uncrystallised positions are central?

Peel J was clear that factual disputes are no bar to an FDR. This is of particular importance as parties (or perhaps their advisers) are often concerned about the likely efficacy of an FDR when there is a factual dispute which the tribunal will not of course be able to resolve. He stated that:

‘[t]he FDR judge is well able to deal with factual issues (such as, in this case, W’s earning capacity), not by determining them but by expressing a view as to how they appear on the available evidence and how relevant they are.’

In relation to this particular case, in spite of the factual issues, ‘[t]he essential facts and resources are clear and there is no impediment to the parties’ making offers, or to the court giving a firm steer’.

In some cases, particularly those – as Nicholas Mostyn QC (as he then was) observed in TL v ML & Ors (Ancillary Relief: Claim Against Assets of Extended Family) [2006] 1 FLR 1263 – where there is a dispute about the ownership of property between a spouse and a third party, the dispute should be directed to be heard separately as a preliminary issue before the FDR so the parties know at an early stage whether or not the property in question falls within the dispositive powers of the court and a meaningful FDR can take place. However, it all depends on the issue in dispute and this is by no means a universal rule.

Likewise in relation to uncrystallised positions:

‘[t]he FDR judge is also well able to give a clear overview even if (as the judge assumed to be the case here) one or other party’s position is not fully crystallised.’

The judgment also sends a clear message, to practitioners and clients alike, that the benefits of the FDR process are wider than the indication itself. As Peel J said, it enables the parties to hear, probably for the first time, an independent evaluation of the case; where parties’ positions differ, the judge can consider which arguments are sound and which are devoid of merit; and parties have the opportunity to consider the risks (in terms of costs, uncertainty, delay and emotional toll) of protracted litigation.

Peel J was emphatic in stating that it was ‘very hard’ to envisage a situation where the FDR should be dispensed with. He said that one example might be if one party had not engaged at all, including not attending court hearings, and had stated that they will not attend the FDR. Although there might be other situations which might justify proceeding from First Appointment to final hearing without an FDR ‘these will be very few and far between’.

GH v GH complements earlier cases which emphasised the importance and centrality of the FDR including S v S (Ancillary Relief: Importance of FDR) [2008] 1 FLR 944 per Baron J and Mann v Mann [2014] 2 FLR 928 per Mostyn J.

In S v S, the parties did not have an ‘effective’ FDR. The District Judge’s involvement on that occasion was said to have been ‘so slight that both of the parties accepted that he could, despite the rules, undertake the final hearing’. Baron J observed as follows:

‘The FDR procedure must be undertaken in an effective way in every case, for it gives every party the opportunity to settle the litigation, to air the issues and to have neutral judicial evaluation at a time before the costs have denuded the parties’ assets in the manner in which they have in this case. As a general principle, therefore, I make it clear that where an FDR is not effective, it is incumbent upon the court to fix another appointment as soon as practicable in order to ensure that there be such mediation. It must come before an experienced tribunal and it must be given sufficient time to enable that tribunal to read the papers fully and to engage with the parties/their professional teams in order that the matter can, if possible, be sorted out.’

GH v GH therefore states that it will be exceptional to dispense with the listing of an FDR and S v S states that if one is listed but is ineffective the court should fix another one as soon as practicable.

In Mann v Mann, Mostyn J referred to the introduction of FDRs in 1996 on a pilot basis and in 2000 nationwide as ‘a significant innovation’ and ‘a great success, contributing to the settlement of the majority of cases’. He referred to the good practice guide promulgated by the Family Justice Council: Financial Dispute Resolution Appointments: Best Practice Guidance December 2012 [2013] 1 FLR 1109. He stated that an FDR ‘is almost invariably ordered’ and that when ordered ‘attendance by the parties is compulsory’, referring to FPR 9.17(10). He said:

‘I have never heard of a party refusing to attend and so cannot say from experience what would happen if someone did. It would be a serious contempt of court were a party recalcitrantly to refuse to do so.’

Peel J’s support for the FDR process is therefore consistent with these previous cases where their importance has been underlined. It is obvious why this is so: early neutral evaluation by a specialist judge minimises the risk in terms of costs, uncertainty, delay and emotional toll of protracted litigation. Given what is exceptional needs ‘no gloss or interpretation’ parties can therefore expect a court dispensing with such a hearing to be a very rare occurrence.