A financial dispute resolution offers more than a forum for discussion - it can be a useful tool in taking a case forward, says Sue Spencer


At a financial dispute resolution (FDR) that I conducted recently, it emerged that counsel instructed by the parties viewed the time set aside by the court for the FDR appointment first as an opportunity for them to have settlement discussions, and second - and a rather poor second at that - as an opportunity for the court to give directions for trial if the settlement discussions failed to resolve the case in full.



Happily, the discussions in that particular case were successful. However, the approach by counsel gave me pause, and led me to revisit the rules to clarify the intended purpose of the FDR, and everyone's proper role within that process.



Rule 2.61E of the Family Proceedings Rules (FPR) 1991 governs the FDR process, together with the 'overriding objective' as set out in rule 2.51D. Rule 2.61E (1) says 'the FDR appointment must be treated as a meeting held for the purposes of discussion and negotiation...'



Parties are required by the balance of the rule to file offers and proposals and all responses to them not later than seven days prior to the FDR (see rule 2.61E (3)), and to ensure full openness at the proceedings. All papers filed must be returned at the end of the hearing. Discussions are not admissible at any final hearing. The trial judge must not be the one who conducted the FDR (see the 25 May 2000 direction of the President of the Family Division and rule 2.61E (2)(4) and (5)).



The judge must have adequate reading time built into the appointment, so as to be completely familiar with the assets, the issues, and the offers. Quite often, written submissions and schedules of assets are filed, both of which help during pre-reading. It is always of assistance if these can be filed the day before.



With the change to the rules on costs brought about by the new FPR 2.71, the court can be sure that the open offers before it at FDR are the offers by which the parties stand not only historically, but in the time leading to trial. Calderbank offers are no longer to be used (see FPR 2.71(6)). It is also now essential that if there are discrete costs orders to be sought, based on conduct during the proceedings, these are identified and formally recorded during the FDR. Such issues will affect the time estimate, and may require specific directions about mini bundles for the final hearing in relation to costs issues. The same is true of any issues about/objections to the quantum of the costs that are to be put into the asset pool at the final hearing.



The Judicial Studies Board has been running a series of seminars to promote the best approach to FDRs among the District Bench by encouraging discussion of practice issues. Unsurprisingly, what has emerged is that there is a multitude of possible approaches, and that the approach could and should be tailored to the case being conducted. However, a more general pattern did emerge.



In this, each side makes submissions (and if in person, may need some help in doing that). The district judge then expresses a view on major issues of principle (if any) that divide the parties, and gives an indication of how the court might approach the division of assets in the case before the court. The matter is then stood down for discussions between the representatives (if possible).



Once called back in, the parties indicate if the matter is or can be settled, and there may be further court input and/or 'stood down' time. Towards the end of the time set aside for the FDR, there may be signed heads of agreement drawn up, considered and (it is to be hoped) approved by the judge. Alternatively, directions will be given to take the matter through to final hearing (see rule 2.61E (8)). Since each case will be different, it is essential that the court can be flexible in its approach to how and when the parties come into chambers, and what is said during that time.



However, the chief purpose of listing an FDR hearing (as opposed to staying the case for a roundtable meeting to be held) is for the court to be pro-active. This purpose is set out in rule 2.51D - the overriding objective. It is always open to the representatives to arrange a roundtable meeting at some other time, preferably before the time set aside by the court for the FDR. If the matter then settles, court time and - equally importantly - parties' costs of preparing for the FDR, can be saved. If the matter does not settle, then it is for the representatives to assist the court in undertaking the task that it has been set by the rules.



In rule 2.51D, the court is given a positive duty to apply the overriding objective by means of pro-active case management in order to 'deal with the case justly'. It is for the court to do the 'dealing' (see rule 2.51D(3) and (5)) and for the parties to help the court further the overriding objective of rule 2.51D(4). Both these rules are phrased in mandatory language.



Rule 2.51D(6) tells the court what it must do by way of active case management. This includes: encouraging co-operation, identifying issues at an early stage, helping the parties to settle the whole or part of the case and fixing timetables or otherwise controlling the progress of the case.



Therefore, from the rules the following would seem clear:

Standing a case down for negotiation following court input is clearly envisaged;

Allowing some preliminary time to negotiate can be pro-active, once the court has been assured that such negotiation might be fruitful;

It would not in most cases be in accordance with the court's duty at an FDR hearing simply to stand back and leave counsel alone without any court input at all.



The FDR appointment is of genuine value to those clients who have found settlement difficult. One hopes that all concerned can maximise benefit from both judicial input and the opportunity for frank and confidential negotiation within the framework set out by the rules.



District Judge Sue Spencer sits at Leeds Combined Court Centre