This month we speak to Morgan Sirikanda of Queen Elizabeth Building about the benefits and pitfalls of private FDRs
Q: Morgan, you are a “senior junior” barrister at Queen Elizabeth Building specialising in financial remedy work, and you sit as a Recorder in the Family Court, but increasingly you conduct a large number of private FDRs as an evaluator, can you tell us what a private FDR is and why people are turning to them?
As your readers will know, an FDR hearing is described in the Family Procedure Rules as “a meeting held for the purpose of discussion and negotiation”. The parties attend Court and the judge hears their without prejudice offers for settlement and then he or she gives a short view of the issues and the outcome and leaves the parties to negotiate an agreement. That is the theory anyway. The problem with Court based FDRs is even the most conscientious judge can only allocate a small amount of time to an FDR. They will have other matters on their list which they have to devote time and attention and the previous working day, they will likely have had a full day of sitting. This has a direct impact on the quality and detail of the indication the judge can give.
When I do a private FDR, I am sent the bundle around a week before and set aside half a day to read it carefully and compile my own chronology. I then receive the advocates’ notes and create an asset schedule. On the day of the private FDR, I hear oral submissions and then, after short break, I deliver a detailed oral indication and hand to the parties a typed document setting out my views in summary written form. Private FDR evaluators are certainly not inherently “better” than judges at conducting FDRs.
But what they do have is the benefit of extensive time and with this time comes very high-quality and considered indications. Private FDRs are very good at settling even the most difficult of cases.
Q: Are there any other benefits to the private FDR?
Not only do the parties choose their own evaluator, who will be somebody both sets of solicitors can have confidence in, but they will also choose the venue. I think lawyers can easily forget how stressful the experience of going to court is. To be in a busy Court often means cramped consultation rooms in a depressing building in dire need of cosmetic TLC; the client has to gather themselves amidst the constant bustle of other cases being called and anxiously waiting for the judge to say they are now ready to hear the FDR.
A private FDR is the complete opposite of this. It can take place in well-appointed offices of solicitors or counsel; the evaluator is there at 10 am waiting for the parties to tell them they are ready to start and there is no rush at all. It drastically reduces the stress and anxiety of most clients.
For me, a private FDR is a “no-brainer” and when acting as counsel I always recommend the private FDR process. And for your readers, I would stress that I consider it suitable for many different types of cases. Smaller money cases can still benefit from a more junior barrister or solicitor who, at very reasonable costs, can crack the case saving money in the long run.
Q: What are the disadvantages of Private FDRs?
Firstly, and obviously, costs. The parties will have to find the additional funds to pay the evaluator. They may well ask their solicitor: why bother when the Court is free? But for the reasons above, I do think it is a false economy to not have a private FDR on costs ground alone.
I suppose a more nuanced objection might be a tendency or some evaluators to be (a) too accommodating of positions which are unreasonable and (b) perhaps more generous in their
indications than a district judge would be at final hearing (for example in respect of the term and quantum of a spousal pps orders). As to the first, it is very important for PFDR evaluator be a straight talker. If a party’s position is simply not reasonable, it is best they be told that in a calm and polite way at the PFDR (I always try and look the party I am giving his kind of bad news to directly in the eye at the hearing). The second point requires the evaluator who has experience of outcomes of the Courts both regionally and in London. The evaluator has got be faithful to their view of what would actually happen if the financial remedy application went to Court. I think the private FDR process would be undermined by evaluators not giving indications as to actual outcomes at Court.
Q: You are also an arbitrator, can you tell us little about that process?
Arbitration is a more formal process than the private FDR. It involves stepping away from Court and seeking a binding arbitration award which will determine the financial remedy proceedings. Both parties have to commence the proceedings via a Form ARB1FS issued with the Institute of Family Law Arbitrators (IFLA). The appointed arbitrator will then have a short directions hearing and conduct a final hearing which normally proceeds like a final hearing at Court with oral evidence and submissions. The arbitration award will take the form of a detailed written decision and will be binding on the parties. The Court of Appeal in Hayley have, however, provided a de facto appeal to a judge if a party considers the award plainly wrong. But I suspect such applications will be few and far between.
Q: What are the particular benefits of arbitration?
These are similar to private FDRs. The parties choose the arbitrator (who must be IFLA accredited/trained). They will have confidence in their decision-maker. Again, the arbitrator will have more time to devote to the case and, perhaps most importantly, the written awards I prepare follow about 14 days after the hearing. So no judgment is reserved for months.
Q: Where do you see the future of out-of-court dispute resolution?
I think it is fair to say that initially, judges were quite reticent about supporting private FDRs and arbitrations. That has changed from the President down there is widespread support for both. This means judges at first appointments sign off on orders providing for parties to step out of the Court system for the FDR and to return for post-FDR directions appointment if settlement is not achieved. The growth in arbitration has not matched the increase in private FDRs, though there was certainly an uptick during the pandemic.
Q: What can solicitors do to prepare best for both types of hearings?
Three small things which make a difference:
- Bundle preparation remains a useful discipline. Do not send the tribunal 1,500 pages (not least because usually they charge extra); edit the enclosures so they receive and will read the important documents only.
- Prepare an ES2. This is one innovation of the Family Court which should be continued in the private out-of-court dispute resolution process. It enables the tribunal to see at a glance the computational issues.
- Tell the client that, whatever the indication is, it needs to be taken seriously. The parties are paying for an early neutral evaluation to assist them to avoid ongoing proceedings which have a financial and emotional cost.