Alternative Dispute Resolution When Divorcing

Attending Court to try to resolve financial matters can be a stressful journey for couples when divorcing. The current backlog in the family Courts could mean that financial matters are delayed for up to two years in the case of a Final Hearing. This is why Alternative Dispute Resolution is becoming more popular than ever before for couples getting a divorce.

The parties can feel more in control of the process when it is outside of the Court arena and the process can be less intense.

If parties struggle to reach an agreement directly or through their solicitors, the first route many will attempt is mediation. Mediation can be more cost-effective and work well, provided both parties cooperate fully. If an agreement is reached, it can be recorded in a consent order and filed at the Court for the Judge’s consideration and approval.

Guidance or assistance with negotiations may be required. In such circumstances, the following can be considered:

1. Private FDR

A Financial Dispute Resolution Appointment (FDR) takes place as the ‘second’ hearing when an application is made at Court for a financial remedy. A Judge, during this hearing, will consider all financial disclosure and submissions by the parties or their representatives and provide guidance on how the case should be settled. If there are discrete issues, guidance can be given on those.

The majority of the cases settle at the FDR hearing because the parties understand the Court’s approach and are more willing to negotiate to settle the matter. The decision remains in the parties’ hands, as opposed to at a Final Hearing when a decision will be imposed by the Judge. The parties will also be reminded about the legal costs they would incur in taking matters to a further hearing.

A Private FDR can take place early on, once financial disclosure has been exchanged. An experienced Barrister, which the parties can choose, would sit as a Judge and hear the case. They will provide guidance on how the settlement should be reached and can advise on any discrete issues raised.

Any agreement reached can be drawn into a consent order and filed at Court upon receipt of Decree Nisi.

2. Arbitration

Arbitration is also a form of dispute resolution. The parties can agree to which suitably qualified Arbitrator they wish to use to adjudicate a dispute. The Institute of Family Law Arbitrators (IFLA) enables the parties to choose an Arbitrator, and if an agreement cannot be made, one can be selected by IFLA.

This route can be used to resolve any discrete issues or the full financial settlement.

An Arbitrator, who sits as Judge, will conduct a private hearing. They will review all financial disclosure and evidence before them, listen to the submissions made by or on behalf of each party, and will also hear evidence from the parties (if necessary).

Decisions of arbitrators are binding on the parties if they have entered into an arbitration agreement in accordance with the Arbitration Act 1996.

3. Collaborative law

This process enables financial matters to be discussed at face-to-face meetings in a calm and constructive way, without the need to attend Court if an agreement is reached. A signed Participation Agreement will show the parties’ and their representatives’ commitment to the collaborative process.

Both parties would instruct their individual accredited collaborative law solicitor and discuss their goals and objectives with them. The collaborative law solicitors would attend face-to-face meetings to discuss the issues and attempt to find an appropriate resolution for their clients.

The parties can take the lead on exchanging financial disclosure to achieve cost efficiency and speed in the process.

Once an agreement is reached, the collaborative solicitors will prepare a document setting out the agreement which can be submitted to the Court and endorsed as a legally binding Court order.