A private FDR is very similar to a court-based FDR, except that the parties will have chosen and paid privately for an evaluator to take the role of the judge in a court-based FDR. The evaluator will be a barrister or solicitor or retired judge who is instructed by both parties.
The evaluator will read the documents that have been sent to them, will listen to submissions from both sides, and will give an indication about the likely outcome of the case.
This is invaluable to the parties, because they benefit from the neutral evaluation of an expert without the financial and emotional cost of proceeding to a trial or arbitration.
The private FDR is held on an entirely without prejudice basis and thus what occurs at the hearing cannot be referred to in any further court proceedings.
1. The main benefit is that (anecdotally) settlement rates are far higher, because the evaluator is an expert, will have considered all of the relevant arguments, and the parties can have confidence that the process has been conducted thoroughly.
2. The parties eill have selected the evaluator and will know that she or he is specialist in the field. At court, the case will be allocated to a judge who may or may not have background expertise in financial provision following separation.
3. The evaluator will be at the parties' service for the entire day. It is exceedingly rare for a court FDR to last for an entire day. Current demands on the court system are unbearably high, and many courts list more than four FDRs in a court day.
However, skilled and experienced the judge at court, it is difficult to assimilate the necessary information in four or more cases and to give an accurate and helpful indication.
The evaluator at a private FDR will be available whenever the parties need them. A judge at court will have to deal with other cases, so it is frequently necessary to wait for lengthy periods before seeing the judge.
Over-listed courts sometimes adjourn FDR hearings to another date, either before hearing from the parties or part-way through the hearing. That should not occur with a private FDR.
4. The evaluator will have pre-read the relevant documents that have been sent to him or her. It is simply not possible for a judge at a court-based FDR to read more than the bare essentials for each FDR that they hear.
5. The evaluator is also available to help with disputes that may crop up later, for example by assisting to draft the order. This is seldom possible at court.
6. The evaluator is providing a service to both parties, and will be polite, courteous, and sensitive when delivering the indication.
7. A private FDR will not take place in a court building. The 'hearing' can be arranged at a date and location that are convenient to the parties. There will be pleasant facilities with rooms for each party, good IT facilities, printing on demand and refreshments.
8. As practitioners, we often overlook the imposing nature of court buildings. Members of the public will often never have been to court, and will imagine that it is where criminals go for trials. Further, even the best courts have limited rooms available, may not allow laptops/iPads to be charged onsite and many have no refreshments available.
9. The parties can hold a private FDR even before court proceedings have been issued.
10. The authors have experience of conducting private FDRs before the issue of any proceedings, resulting in an agreement which was dully sanctioned by the court. Of course, it goes without saying that both parties must be satisfied that each has made full and complete disclosure to the other of their assets and liabilities.
Perceived disadvantages - and possible remedies
1. The court service does not charge for a judge's time.
2. The parties will need to pay for a private FDR evaluator. We are aware, anecdotally, that the range of fees charged by evaluators is wide and open to negotiation.
3. In any event, the expense can be greatly outweighed by the advantages gained e.g. an early settlement and thus the saving of substantial legal fees, of more stress for the parties, and of a long wait to a final hearing by the court.
4. A private FDR evaluator is not a judge and so does not have coercive powers to direct disclosure etc.
5. If the case involves non-disclosure, or wide-ranging directions are being sought against third parties, then it may be more appropriate to hold a court-based FDR, where directions can be given if the FDR is ineffective. Do bear in mind though that private FDRs can still be very effective in those situations.
6. There can be a delay in arranging a court hearing after a private FDR if settlement has not been reached. This can be avoided by making sure that a court directions hearing is listed shortly after the private FDR is due to take place.
7. Is the concept of private FDRs at risk from an undercurrent that, since the parties, or sometimes just one of the parties, pay the evaluator a fee, he or she may so conduct the FDR in a way so as to promote future appointments as evaluator from the lawyers involved in any particular case?
8. We firmly believe it is not. No evaluator should ever 'pull their punches' when giving his or her views. What the parties want, indeed what they have paid for, is for the evaluator to spell out impartially his or her considered, clear, eaily understood, and robust views as to the likely outcome of the case. Indeed the evaluator is likely to gain further appointments thereby and not by 'trimming the sails'.
Private Financial Dispute Resolutions: A Short Guide was edited by Sir Hugh Bennett and Duncan Brooks. The Consulting Editor was Mr Justice Mostyn.