How Private FDRs Can Be Improved
Published: 12/05/2023 22:44
"Perhaps the only certainty about an FDR indication is that the outcome at final hearing is almost bound to be different”
As family lawyers, we are good at some things; less so at others.
Our strong suit is thinking creatively and holistically in finding a solution to any given case. We are comfortable with the concept of discretion; or at least we become so after a few years’ experience of how the courts actually deal with financial remedy claims.
Where we tend to be weaker is with the traditional lawyerly craft of building a case: evidence-gathering and proving facts in court. That isn’t to say we’re bad lawyers. It’s the product of several factors: (1) the law of financial remedies being all about balance, weighing competing legal and factual arguments, as opposed to determining whether a party has proven the elements of her case to the requisite standard; (2) the overarching objective of fairness and the court’s quasi-inquisitorial function, which mean that, while a devastating cross-examination can materially reduce an award, it will rarely produce a knock-out blow in terms of a claim being dismissed; (3) as advocates we have far less experience of having evidence tested in court, compared e.g. with criminal advocates, many of whom will have acquired close to the 10,000 hours required for expertise.
The FDR is a good example of where family lawyers found an innovative way to resolve disputes at a relatively early stage, without worrying too much about evidential proof. By giving an indication, judges give a cautious assessment of the likely outcome, mindful that (a) final evidence has not yet been exchanged; (b) the oral evidence has not been tested, (c) the assets will almost certainly look different at trial, if only to reflect the drain of legal costs.
This, plainly, has never been an exact science. It is easier to give a view about a principle (e.g. the extent of a sharing claim, the relevance of inherited assets) rather than a fact-specific issue such as housing need or maintenance. The reality is, as they say in Hollywood, no one really knows the answer, when it comes to factual issues. Also, litigation is dynamic: particularly so in family cases where the parties do not at the outset have to stats their cases in detail (cf. Part 7 claims). Between FDR and final hearing, assets may have changed in value, liabilities will rise, there could be updating expert evidence, the parties will produce new evidence (e.g. housing particulars) in addition to s.25 statements which will not be before the FDR judge. New factual or legal arguments may be articulated as late as the day before the hearing. Trials are inherently unpredictable: witnesses say unexpected things, the court exercises a broad discretion and individual judges may be more interested in certain arguments than other ones.
Or, to quote the old cliché, no one ever steps in the same river twice because it’s not the same river.
There are no statistics about the accuracy of FDR indications. Perhaps the only certainty about an FDR indication is that the outcome at final hearing is almost bound to be different: hopefully not different in terms of principle; but almost certainly different in terms of the precise calculation.
However, an FDR is unquestionably a hugely valuable exercise, where parties can see the strength of their arguments tested, and if only because the combined costs of proceeding to trial are probably higher than the margin of error in many indications.
Innovation of the private FDR
If the innovation of an FDR was a good one, the private FDR was a brilliant one, in terms of providing a forum where the parties could select a tribunal (which generally means both sides have expressed confidence in the individual); which will have received and read the papers in advance and will be able to concentrate exclusively on one case during the day. The parties have the time to see their evaluator when they are ready; there is not another case waiting to be heard.
The anecdotal evidence (query if that is a contradiction in terms) is that private FDRs have better outcomes in terms of the likelihood of settlement, in spite of full-time judges unquestionably having the greater experience and knowledge of actually hearing contested applications at trial.
Here I should declare an interest: I have sat part time as a judge for ten years and as a private FDR evaluator for nearly as long. I enjoy hearing private FDRs and being engaged in problem solving, guiding people towards settlement and away from the brutal experience and cost a final hearing. Private FDRs involve the best elements of sitting without the pressure of late receipt of papers or the pressure of having to get through numerous cases in a list. I should say I also enjoying hearing a FDR as a judge but typically that will be in a list of 3 or 4 in a single day and while I will do my best to apply the same attention to each case, there are only so many hours in day for pre-reading.
Issues with the private FDR
So, what is the problem with private FDRs? They clearly work well and have resolved some of the most intractable cases, thanks to the availability of an informed tribunal who has had the time to consider the papers in detail.
In my view, there are a handful of issues, most of which relate to the evolution of the court FDR from something relatively short and summary (i.e. typically 1 or 2 hours in a family court; a day or longer in the High Court) to a more ‘Rolls Royce’ service where the private FDR hearing can take several hours: advocates lodge lengthy position statements and speak to them for over an hour; evaluators who attempt to cover the arguments so comprehensively that the indication turns into something like a mini-judgment.
The reasons for these development are understandable: lawyers and tribunals want to ensure the clients feel they get value for money. However, this development and elongation of the process risks undermining the essential nature of the FDR: to give a view based upon a neutral evaluation of the case, before the final evidence has been adduced - and with it the opportunity to settle can be lost. This expansive approach to the private FDR can give the parties the false confidence that a detailed indication based upon untested evidence is somehow a more reliable guide of what will actually happen at trial.
Here are what I would suggest are the problems:
1. Selection of tribunal
There is a free market in terms of who is selected as a FDR evaluator. However that market does not appear to be working fairly in terms of the instruction of women evaluators. Katherine Landells from Withers LLP has been campaigning on this issue for some time. All I can add, from my perspective, it that is difficult to fathom why this problem arises given the sheer number of excellent women FR specialists, many of whom have relevant judicial experience. Off the top of my head, I can think of a dozen names (just in terms of barristers) who I would have no hesitation in recommending: Katie Cowton KC, Alexis Campbell KC, Sally Harrison KC, Samantha Hillas KC, Sarah Phipps KC, Jude Allen, Fiona Hay, Lucy Owens, Nicola Fox, Zoe Saunders, Niki Langridge, Helen Brander, Laura Heaton, Katherine Kelsey, Laura Moys, Marina Faggionato, Amy Kisser (with apologies to those who I have not named)
2. Giving evidence by proxy
In life, nothing stands still. Within the span of my own career (25 years) this area of law has changed unrecognisably, both in the applicable principles (from reasonable requirements to fairness and sharing) and also in its practice (of lodging written notes). When I began, older barristers complained about the innovation of having to lodge a position statement instead of setting out a case orally (“It’s the end of the Bar”). Now, written submissions have gone through a sort of hyper-inflation whereby tracts of 20 or 30 pages are often lodged for an FDR, accompanied by an array of schedules, net effect calculations and Capitalise calculations.
The length of these documents can be a problem per se. Practitioners habitually ignore paragraph 24 of the Efficiency Statement (19 January 2022) which requires that position statement should be “concise” and not exceed 6 pages for a First Appointment, 8 for an interim application, 12 for an FDR and 15 for a final hearing.
But there is a more serious problem at a private FDR, which will generally take place before the exchange of witness evidence, where the line between a position statement and what should be the contents of a witness statement is blurred to the extent that the writer of a position statement effectively gives evidence by proxy, the day before the FDR, without a signed statement of truth, with the expectation that the document will attract FDR privilege.
The effect is that in some cases the orderly hearing of a private FDR is hijacked by the presentation of contentious and sometimes incendiary allegations on the eve of a hearing. This uses up time both in conference (where instructions are taken on the points for the first time) and during the hearing, which the other advocate may feel the need to respond in detail. Even though most tribunals will reiterate that they are not in a position to resolve (or give an informed indication in relation to) factual disputes.
This is not to promote a counsel of perfection. Clearly, advocates will want to summarise a factual case in the document, which will likely involve filling in certain gaps from the contents of a Form E or replies.
However, parties should be alive to the risk that where a position statement covers the points in too much detail or introduces new allegations that have not been articulated earlier the whole point of attending the private FDR will be blunted because time will be taken up in responding to these allegations.
A connected problem is how much time advocates take in making their oral submissions at a private FDR.
In most court FDRs there is a natural limit to how long the advocate will address the court: this is typically in the region of 20-30 minutes, assuming that the listed time is one hour.
At a private FDR, that pressure of time dissipates. Advocates can usefully take their time and expand on points which might assist with the evaluator’s indication. However, the lack of time pressure can be (ab)used when an inordinate amount of time is taken to set out a case on disputed issues. For example, I recall a case where the one advocate spoke for over two hours, covering numerous points of what their client was likely to say. Since the private FDR tribunal sits as an evaluator (and not a judge), they may feel they have less control (or be less willing) to impose some sort of ‘cloture’ to this 'filibuster' that a judge who has a list of other cases to hear on the same day.
Why is this a problem, given that it is for the parties to decide how best to use the day?
Firstly, because, just as every act has an equal and opposite reaction, where one party dwells on the detail for so long, the other party will likely want their advocate to respond in kind. Secondly, at the risk of stating the obvious, because any FDR involves two stages: the FDR hearing and the parties’ negotiation. However erudite an indication the parties need to have time to consider it and negotiate. It is good practice to have the indication before lunch to allow a half day for discussions. This is why a court FDR starting at 2pm or 3pm is such a bad idea. Thirdly, where the advocates take all to most of the morning to set out or respond to factual allegations, the time for the indication is put back until after lunch. In my experience, some clients will either begin to lose focus or will tire by 3pm or 4pm. It is generally speaking less than ideal to start negotiations at that stage – even in a comfortable environment where coffee and expensive biscuits are freely available.
4. Indications that are practically mini-judgments
The perceived need of advocates and evaluators to give value for money by setting out a case so expansively risks undermining the whole point of attending an FDR (reaching settlement) and invites the evaluator to give an indication which becomes more like a judgment.
An indication is not and cannot be a judgment for the simple reason that the tribunal hearing a FDR/ private FDR has not seen the final evidence and has not heard the parties evidence tested in the witness box. While in some cases the evaluator may be willing to give a view (based upon a gut instinct or even ‘judicial notice’), where this strays into giving a provisional assessment of the merit of an inchoate factual case on e.g. housing need or income need, the danger is the indication can involve speculation on what the parties might say, how their evidence might be tested and how a judge might approach the detail in future (where the figures will likely be different).
It is perfectly understandable why a private FDR evaluator, acting with the very best intention of wanting to give the parties value for money, would give a lengthy detailed indication, even one backed by their own net effect schedules, but this apparent value for money might not achieve what the FDR is all about. The parties may end up taking time in conference to discuss everything that the evaluator has said. One party may feel dissatisfied if the evaluator has formed a preliminary view without having heard from him. The erudition of a legal analysis might assist the advisers but it will have limited use for the lay clients.
Ultimately, as a general rule of thumb, it is suggested that a private FDR indication needs to be clear, honest (in terms of explaining that this area of law is discretionary and fact-dependent) and above all explain the commercial reality, that while a view has been given on the facts, the costs of taking this to trial could well be disproportionate.
So, what can be done?
The following is suggested as some practical solutions to the problems which, it is accepted, are not universal but arise in a minority of cases:
- In terms of selection of tribunal, the adoption of a voluntary practice whereby lists of (say 3) proposed FDR judges should include at least one woman. Practitioners should be aware of the excellent PFDR Directory on the Financial Remedies Journal Website;
- In terms of written submissions, that there should be a strict application of the existing rules for length of bundle and position statements save e.g. where agreed in advance or brought to the evaluator’s attention. It may be worth considering, where a position statement has descended into factual submissions, if those parts of the document can be excised from the privileged part of the note and referred to later on, in the same way as factual assertions contained within a without prejudice document might not be;
- There should be some understanding in advance as to the length of oral submissions (typically limited to 45 minutes or 1 hour each) to enable the indication to be given, if at all possible, before lunch.
- In terms of indications, the parties are undoubtedly assisted by a short summary of the evaluator’s views. However, a lengthy document which sets out the law in detail might not assist if it would take a large part of the remainder of the day to unpack its contents.