Covid-19: sorting the finances out

Divorcing spouses are more likely to want to settle financial matters promptly because of covid19, the growing backlog in cases in the family courts, and general uncertainties within personal lives.

In the wider context, the profession can expect an increase in various forms of alternative dispute resolution (ADR) because of the pandemic, as clients want a cost-effective and timely resolution outside of the courts – where the situation has reached breaking point.

Family practitioners have had a flurry of judicial guidance since March to adhere to, which has resulted in difficult decisions being made. An important element of the guidance to remember is that Mostyn J stated (in March) that all first appointments should be dealt with via the accelerated paper-only procedure where possible. Further, they should be undertaken privately via video conferencing.

One way that some family practitioners are finding an effective way, both financially and in terms of time, is through the private financial dispute resolution (FDR) process. The FDR is “a simple concept”, as Sir James Munby said in July 2018 as the outgoing president of the Family Division, and he urged other judges to encourage the use of private FDRs on a local basis in place of an in-court FDR.

This may involve the cost of paying a specialist to act as a private ‘judge’ to the role of giving an indication as to the likely outcome of the case (and they will have read all the papers!), and assisting the spouses in negotiating a settlement. But on the other hand, a whole day is typically set aside (rather than an hour or two in the case of a court-based hearing) and the benefits should not be ignored lightly.

The private FDR – assuming it is successful – can bring a mutually agreeable settlement to the parties in a non-acrimonious manner and in a considerably shorter period of time.

Sir Munby also noted that though a private FDR requires some investment by the parties, this expense can be greatly outweighed by the advantages gained. The very fact of investment by the parties will signify a voluntary seat at the negotiating table rather than a sense of being dragged there. The ‘hearing’ can take place at a time convenient to the parties, even in the evening or at a weekend, and for as long as the parties want. The private FDR judge will, by definition, have been given all the time needed to prepare fully for the hearing.”

The backlog of cases caused by covid-19 and court closures presents a significant burden on the family justice system, though in person hearings (and hybrid hearings) are now taking place once again.

Whatever the immediate future of the family court system, private FDRs are a route client should be encouraged to explore – not least because they are known to have a high settlement rate, and can resolve matters quickly enabling the parties to move on with their lives.

Written by Nicola Laver, a non-practicing solicitor and a qualified journalist. She is also editor of Solicitors Journal.


Posted on 22.09.20