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Resolving financial and private children law disputes can be an emotionally taxing and complex process, particularly when it involves a divorce or separation. While court proceedings are a traditional route the court must consider the overriding objective to deal with cases justly, with a suitable allocation of court resources and without incurring disproportionate expense.

The court now has a duty to consider Non-Court Dispute Resolution (NCDR) at every stage in the proceedings.  Although this has been the case since it was introduced by the Family Procedure Rules in 2010, these rules have been updated in April 2024 which give the court more power to encourage NCDR.

The main changes are:

  • The court can compel a party to file and serve a form setting out their view on using NCDR in the proceedings.
  • The court can encourage parties to obtain information about, use and take part in NCDR.
  • The court can without the agreement of the parties adjourn proceedings to undertake NCDR including attending a Mediation Information and Assessment Meeting (MIAM)
  • In financial remedy proceedings, the court can make a costs order against a party who has failed, without good reason, to engage in NCDR.

In the recent case of XvY, Mrs Justice Knowles set out the courts expectation that there should be a “serious effort” to settle matters outside court at all stages of the proceedings, including before commencing proceedings. In the case before Mrs Justice Knowles, the parties had not engaged in any form of NCDR before commencing proceedings, which she said was “utterly unfathomable”.

Certain cases are less suitable for NCDR for example where there has been domestic abuse, drug or alcohol misuse, coercive control, mental health issues, high conflict individuals and those who will not engage in good faith.

Where it is not possible for the whole case to be resolved by NCDR, is worth considering whether part of a claim can be, to narrow the issues and lessen the pressure on court time and resources.  If there are natural breaks in the proceedings, parties should consider whether these should be used to engage in NCDR. These NCDR methods may provide a quicker, less stressful and more cost-effective resolution than court proceedings.

Types of NCDR (Non-Court Dispute Resolution) methods

Mediation

In mediation, a neutral third-party mediator assists the disputing parties in reaching a consensus. The mediator offers suggestions but does not make binding decisions. The flexibility of mediation allows parties to control the pace and nature of the discussions, and while it is usually cheaper than court, it does require both parties to actively participate.  Mediation often works best if you have some legal advice alongside it.

Collaborative Divorce

Collaborative divorce involves both parties and their respective lawyers, all trained in collaborative resolution methods. Unlike traditional negotiations, both parties commit to avoiding court, working together to achieve a beneficial outcome. It often involves other experts, such as financial advisors or child specialists, to provide comprehensive solutions.  If an agreement can’t be reached the Collaborative lawyers drop out and the parties have to instruct fresh lawyers for any court case that follows.

Private Financial Dispute Resolution Appointments (pFDRs)

Parties pay an experienced barrister/judge to carry out a “Financial Dispute Resolution Hearing” for them with the aim of reaching a settlement about finances.  An FDR is a hearing where a judge hears a summary of the parties positions and gives them guidance as to what outcomes are likely or sensible.

Round table

Parties and their lawyers agree to set aside a day to come together and attempt to negotiate a settlement in an attempt to avoid court.

Arbitration

Arbitration is often used for financial disputes and non-safeguarding child matters. Here, an independent arbitrator makes a legally binding decision on the matter. While more expensive than other methods, arbitration is usually quicker than court and allows for greater focus on your specific case.

Evaluating the Pros and Cons

When dealing with complex financial and children cases, each NCDR method presents its own set of advantages and challenges:

Mediation Pros and Cons

Pros:

  • More control over the outcome, rather than giving the power to judges
  • Neutral mediation without taking sides via mediator
  • You can obtain legal advice alongside mediation
  • Wide range of mediation styles available
  • Can lead to a faster resolution
  • Often more cost-effective compared to court

Cons:

  • No legal advice is provided by mediators
  • It is voluntary – both parties must engage and if one party withdraws you cannot mediate
  • Without prejudice; cannot be referred to in open court
  • Any agreement made in mediation is not binding until it is drawn up into a consent order and approved by the court

Collaborative Divorce Pros and Cons

Pros:

  • Both parties are legally advised
  • As in mediation, there is control over the pace and process
  • May result in better post-dispute relationships
  • Both parties sign an agreement that they are committed to finding a resolution

Cons:

  • May not suit cases where there is an imbalance of power between the parties
  • Potentially more expensive with legal involvement and other experts
  • Agreements are not binding until court-approved

pFDRs Pros and Cons

Pros:

  • Both parties are legally advised
  • Barrister/Judge has had time to fully prepare and is available for a whole day to assist the parties and provide an “indication” of what would be the likely outcome at final hearing rather than a court judge who may have minimal preparation time and only have an hour or so in a busy court list.
  • Without prejudice – cannot be referred to in open correspondence or at the final hearing which encourages early settlement.
  • The Barrister/Judge draws the parties attention to the high legal costs of going to a final hearing which encourages early settlement.
  • A more relaxing environment than attending court

Cons:

  • More expensive than attending a court FDR (which is free)

Round Table Pros and Cons

Pros:

  • Both parties are legally advised
  • Can be useful where there is a particular need for privacy
  • More informal and a less stressful environment than attending court.

Cons:

  • No guarantee of reaching a settlement
  • You are not provided with an “indication” by a judge (like at a pFDR) of what would be the likely outcome at final hearing which may make settlement harder.

Arbitration Pros and Cons

Pros:

  • Both parties are legally advised
  • The arbitrator will be solely focused on your case
  • More informal and less stressful environment than attending court
  • Parties can choose the same arbitrator
  • Provides a binding decision with limited grounds to appeal

Cons:

  • If one party is hiding assets an arbitrator does not have the same investigatory powers as the court
  • Can be expensive as parties pay for their own representation
  • May not be appropriate for all areas of law
  • Both parties must agree to arbitrate

Making an informed decision

Choosing the most appropriate method for your situation involves careful consideration of the nature of your dispute and the dynamics between the parties involved. The new NCDR rules make NCDR options even more important to consider at every stage of the proceedings, whether for finances or private children law cases. 

Divorce and separation can be very complicated, and we recommend getting legal advice to understand the different options available to reach a resolution and which may be the best NCDR option (if any) in your particular case. It is important that you are properly advised and informed at every step of the process, including at the very beginning, to have the best chance of a fair, expeditious and cost-effective outcome.

Contact us to speak to one of experienced family law experts.