DR Corner: FPR Part 3 – Out-of-Court Dispute Resolution Options – Perils and Possibilities
Published: 21/11/2023 07:00
Opportunities for resolution away from the court have never been greater – mediation, early neutral evaluation, private FDRs, arbitration – and practitioners continue to take up training in these disciplines. However, although the use of out-of-court resolution continues to increase, too many cases remain within the overburdened court system, cases for which non-court dispute resolution (NCDR) are or may be suitable.
A reminder of FPR Part 3
‘THE COURT’S DUTY AND POWERS GENERALLY
Scope of this Chapter
This Chapter contains the court’s duty and powers to encourage and facilitate the use of non-court dispute resolution.
The court’s duty to consider non-court dispute resolution
(1) The court must consider, at every stage in proceedings, whether non-court dispute resolution is appropriate.
(2) In considering whether non-court dispute resolution is appropriate in proceedings which were commenced by a relevant family application, the court must take into account –
(a) whether a MIAM took place;
(b) whether a valid MIAM exemption was claimed or mediator’s exemption was confirmed; and
(c) whether the parties attempted mediation or another form of non-court dispute resolution and the outcome of that process.
When the court will adjourn proceedings or a hearing in proceedings
(1) If the court considers that non-court dispute resolution is appropriate, it may direct that the proceedings, or a hearing in the proceedings, be adjourned for such specified period as it considers appropriate –
(a) to enable the parties to obtain information and advice about, and consider using, non-court dispute resolution; and
(b) where the parties agree, to enable non-court dispute resolution to take place.
(2) The court may give directions under this rule on an application or of its own initiative.
(3) Where the court directs an adjournment under this rule, it will give directions about the timing and method by which the parties must tell the court if any of the issues in the proceedings have been resolved.
(4) If the parties do not tell the court if any of the issues have been resolved as directed under paragraph (3), the court will give such directions as to the management of the case as it considers appropriate.
(5) The court or court officer will –
(a) record the making of an order under this rule; and
(b) arrange for a copy of the order to be served as soon as practicable on the parties.
(6) Where the court proposes to exercise its powers of its own initiative, the procedure set out in rule 4.3(2) to (6) applies.’ (emphasis added)
The Family Solutions Initiative represented a concerted effort to refocus attention on Part 3 thereby requiring the Court, lawyers and the parties to consider NCDR at all times.1 Where it is safe and appropriate, the increased use of out-of-court processes should improve the experience of separating and divorcing families, leading to improved outcomes (particularly for children), at the same time as easing the burden upon the court system.
Lawyers should consider with their clients the appropriateness of all forms of NCDR at all times. This should be not only at the commencement of their instructions, but also throughout the conduct of the matter. They should consider inviting the other person to a suitable NCDR process/es setting out their rationale. The recipient of such invitation is expected to set out a considered response. The Part 3 chain of correspondence should be open, written and received in the expectation that it may be seen by the court in relation to the conduct of the matter generally and in respect of costs.
In WL v HL  EWFC B10,2 Mr Recorder Allen QC (as he then was) used his FPR Part 3 powers to case-manage by maintaining a supervisory role over the progress of the inter-solicitor negotiations, adjourning to enable mediation to take place. The lawyers were required to keep him informed of the dates at which without prejudice offers were made but he was not appraised of the detail thereof.
If the court considers that NCDR may be appropriate it may adjourn to enable the parties to ‘obtain information and advice about, and consider using, NCDR’. The court may adjourn of its own motion or when requested to do so by one of the parties which anecdotally is on the increase.
The recent Ministry of Justice consultations invited responses on a number of issues including MIAM compliance, mandatory mediation, and costs orders. In financial remedy matters, the court has demonstrated its willingness to make costs orders for failure to use an appropriate out-of-court process.
In JB v DB  EWHC 2301 (Fam) at –, Mostyn J made a £15,000 costs order against the husband for ‘wilfully’ refusing to engage in a settlement meeting withdrawing the day before a scheduled mediation meeting.
In CM v CM  EWFC 16, Moor J ordered the applicant to meet the respondent’s costs stating (at ):
‘High Court Judges are exceptionally busy. They do not have time to draft letters of instruction or even to determine disputes as to the wording of such letters. In a future case, if there is a genuine issue as to drafting, I consider it would be exactly the sort of matter that should be referred to an arbitrator who is accredited by ILFA’.
In Re B (A Child) (Unnecessary Private Law Applications)  EWFC B44,3 HHJ Wildblood QC (as he then was) could not have been clearer about the risk of sanctions for failing to engage in appropriate NCDR (at ):
‘Therefore, the message in this judgment to parties and lawyers is this, as far as I am concerned. Do not bring your private law litigation to the Family Court here unless it is genuinely necessary for you to do so. You should settle your differences (or those of your clients) away from court, except where that is not possible. If you do bring unnecessary cases to this court, you will be criticised, and sanctions may be imposed upon you. There are many other ways to settle disagreements, such as mediation.’
Although the court has existing powers to make costs orders for an unreasonable refusal to negotiate (Mostyn J in OG v AG  EWFC 52), the Family Procedure Rule Committee has been invited to consider a proposed rule change at FPR 28.3(7) with the addition of a new paragraph (g):
‘In deciding what order (if any) to make under paragraph (6), the court must have regard to (g) a party’s unreasonable refusal to engage in non-court dispute resolution.’
Some form of new ‘NCDR certificate’ is also being considered; at various touchpoints with the court the parties/their solicitors could be required to explain why the matter is not proceeding through an out-of-court channel.
Mediation continues to be the most used NCDR process. Hybrid (aka integrated) mediation enables the mediator to hold confidences in the negotiations (akin to the civil and commercial model) and encourages attendance by lawyers or other professionals.4
Private FDRs report considerable success, with matters settling on the day or shortly thereafter. However, it is disappointing that arbitration has not taken off as hoped or expected. The number of Institute of Family Law Arbitrators (IFLA) registered arbitrations is considered to be lower than the actual number that have taken place, particularly for financial cases. Accordingly, arbitrators are now asked to register their arbitration with IFLA.
Total number of arbitrations registered with IFLA to September 2023
Finance scheme (commenced 2012) – 571
Children scheme (commenced 2016) – 76
A reminder – arbitrators should now register their arbitration with IFLA
The emergence of the ‘One Lawyer One Couple’ model is proving popular with clients and lawyers. The single professional’s role is to facilitate the couple’s negotiations and advise them on whether the outcome of their negotiations has fallen within the parameters of their advice. It is inappropriate for a single lawyer to be involved in substantive negotiations and it follows that if there is a continuing ‘dispute’ the single lawyer should withdraw. At that stage, the matter could proceed to an NCDR process. More details about Resolution’s model ‘Resolution Together’ can be found on the Resolution website.5
See also The Divorce Surgery website founded by barristers Samantha Woodham and Harry Gates.6
Recognising that many couples require ‘certainty of conclusion’ but without litigation, The Certainty Project combines a seamless beginning-to-end service bringing together lawyers, mediators and arbitrators – a comprehensive NCDR package with an arbitral determination if required.7
A judicial request to collate on ‘no more than two pages’ a users’ summary of Out of Family Court Resolution Helpful Links can be found on the Financial Remedies Journal website.8 At the request of Peel J and HHJ Hess, this document should now accompany the court’s notice of hearing and be sent to both applicants and respondents.
For only £20 those considering or already within court proceedings would do well to acquire Jo O’Sullivan’s excellent book, (Almost) Anything but Family Court,9 which provides an in-depth explanation of the various out-of-court options. The resource has received glowing endorsement by the President.
Over the last decade or so, Alan Larkin has been developing a free AI-powered tool for those going through separation or divorce which provides an online analysis and recommendation regarding their suitability or otherwise for NCDR in its various forms.10
Lawyers are expected to have a good knowledge of all forms of NCDR both locally and nationally. They are expected to have discussed with their client the suitability or otherwise of all out-of-court processes, keeping them under constant review as the matter progresses. They should consider inviting the other person to an appropriate NCDR process/es setting out their rationale. Such invitations and replies should be open and capable of being put before the court in relation to the conduct of the matter generally and the question of costs. Expect the court to increasingly exercise its Part 3 duties and powers.
Consider when approaching a hearing, particularly a final hearing, moving a matter into arbitration should the matter get bumped due to judicial unavailability. Know which arbitrators might be available and invite the other person to agree to arbitration in the event of such circumstances (include proposals for meeting the arbitrator’s fee, etc). Such correspondence might well have the effect of moving the matter into arbitration; if it does not, it may be considered by the court on the question of costs at some later date.
Watch the direction of travel, particularly with regard to costs orders for unreasonable refusal to engage in NCDR and any changes to the Family Procedure Rules.
* This article adopts the language of the Family Procedure Rules although it is universally accepted our language should aim to move away from ‘parties’ and ‘disputes’ towards constructive problem-solving language. See www.familysolutionsgroup.co.uk/language-matters/. It is refreshing to see NCDR practitioners recognised for their work away from the court, for example the new Legal 500 category for Private FDR Judges and arbitrators, see www.legal500.com/c/london-bar/family-private-fdr-judges-and-arbitrators/