The FDR hearing and the First Appointment: what you need to know
June 28, 2011 278 comments
When a financial application is made to the divorce courts, three court hearings are scheduled to take place: a First Appointment, an FDR hearing and a Final Hearing. Two years ago I published a post called FDR – look out for these stumbling blocks. It has proved popular with readers in search of information and practical advice, and for this reason I would like to look at the first and second court hearings in a little more detail.
Parties often regard the First Appointment as relatively unimportant, because they don’t have to say anything and much of what happens goes over their heads.
In reality? Ignore what is going on at your peril!
Before the First Appointment, each party will have exchanged a document known as Form E, which contains financial information. At the First Appointment hearing, discussions will take place with the judge as to what, if any, additional information is required before the case is ready to proceed to the next stage.
It is vital to play your part and make sure everything that should be disclosed between the parties, has been disclosed. You also need to confirm that all the valuations that need to be produced and agreed are set in train, ready for the next stage: the Financial Dispute Resolution hearing. At the FDR hearing, negotiations will take place on a Without Prejudice basis and a presiding judge will attempt to bring about a settlement.
Chronology Statement of Issues and Questionnaire
Before the First Appointment, each party will also have prepared a Chronology: a brief history of what they see as the relevant facts. Sometimes these will be contentious, but don’t worry too much, they are merely to assist the court. A draft Questionnaire will also be prepared, intended for the other party to answer. This Questionnaire is based upon a Statement of Issues, which is another document filed with the court. In a Statement of Issues document the party explains, as succinctly as possible, what the issues are in the case and what still needs to be answered by means of the Questionnaire, before the FDR hearing can proceed.
The Questionnaire aims to sweep up all outstanding matters the other party may have “forgotten” to deal with when filling out his or her Form E. It may also require further amplification. I have seen opponents value their interest in a company at “nil” or simply leave figures blank or “to be assessed”. How can the case proceed without that information?
At Stowe Family Law we are greatly assisted by our in-house forensic accountants, who assist in the preparation of clients’ Questionnaires and who help to assess the information subsequently provided. We are solicitors, not accountants, so having this facility on tap is greatly appreciated by our clients and is frequently invaluable.
In straightforward cases, the Questionnaire may be surplus to requirements. In complicated cases, it most certainly is not. However the judge has to decide whether each question is necessary.
One trick I have noticed is that at the First Appointment hearing, the lawyer on the other side may sidle up to the opposing lawyer, for a conversation beforehand. In the course of trying to “amicably agree” the questions to remain in each party’s Questionnaire, “to save the court’s time”, that lawyer might suggest that one or other of the questions are “irrelevant” and should therefore be struck out without further ado.
Beware! If in doubt, do your best to keep it in because while the lawyer on the other side is acting on his client’s instructions and may not know the truth, the client may not be so honest. This could be his or her last gasp effort to keep information hidden, knowing that a judge will keep that question in and that it should be answered.
You will frequently find that valuations are contentious. You may see no need of another valuation. You may already have one. Or you may believe that a valuation is desperately required, to prove that your spouse has placed a ridiculous value upon a major asset. Or if valuation is agreed, you may want your own valuer. It is up to the judge, remembering everything we have previously discussed in connection with the new Family Procedure Rules, to act in accordance with the overriding objective to decide what to do that is proportionate to the issues involved. Usually that means jointly instructing just one expert, who will give a valuation of a property or shares or pensions, or other valuable items. If it is a complex case, however, and you feel that a single expert is not appropriate, you can still argue for your own.
When the First Appointment is over, and you leave court with directions in place, the judge will also have ordered a new hearing date, and the case moves on. All directions given by the court must be complied with, so that the FDR hearing can go ahead.
The FDR Hearing
This is a private court hearing, which provides a very good opportunity for the case to settle. However this, as I noted in my previous post about FDR hearings, is not a certainty.
Settling a case at an FDR hearing is far from easy, because clients know they can still go to a Final Hearing if they wish. I have read letters written after FDR hearings, which set this out as follows:
“I regret the FDR did not result in a final settlement because as you [X] know, although you were prepared to compromise, unfortunately[Y] was not, and sadly continued to hold out for a disproportionate share of the assets so that a reasonable settlement was impossible…..”
In such a case, there is no possibility of compromise between the parties. So the case has to plod on to the third more terrifying stage: the “no holds barred” Final Hearing, in which control is surrendered to the judge as the parties finally walk through the courtroom door…
I have often thought that for a judge, conducting a negotiation is a far tougher job than arriving at a judgment, particularly if the judge does not have the presence or sharpness of some of the formidable advocates who appear before them. If the judge doesn’t give it a really good go, pushing both sides to extremes, then the intractable dispute will go to a lengthier – and even more expensive– Final Hearing.
So why do FDR hearings fail?
In my experience, one of the most common reasons why FDR hearings fail is that there is an insufficiently firm, authoritative figure at the helm who can steer the parties towards a settlement.
In such situations there will, of course, be tough lawyers on both sides. The lawyers will be happy to slug it out and demonstrate to their clients exactly why they are in safe hands. The judge needs to be even tougher. When this is not the case – perhaps an inexperienced deputy has been assigned to the task, or perhaps there are insurmountable time constraints – it can be difficult for the judge to stage manage the deal.
The parties leave deflated. Outside the courtroom door, aggression can turn into melancholy, as the wasted time and costs are lamented. It is a great pity, because an FDR hearing is a good opportunity to settle. But the parties, cocooned by their lawyers and not actually taking part in the court hearing, simply sit back while it takes place around them.
In the heat of the moment, they can forget that a good settlement is one where both parties walk away thinking that each of them could have done better. That is the price they pay for achieving resolution. I think it is a small price. The parties need to consider whether or not it is worth the wait, the additional cost and the stress of going to a Final Hearing. If this happens, the adversarial process will get into full swing and the parties will have to give evidence and be subject to rigorous cross examination.
If the FDR hearing takes place in the High Court, it can be a different matter. A High Court judge will have greater stage presence;after all, the courtroom setting is somewhat different to the chambers of the local district judge. The judge has the ability to challenge both sides so acutely that even intractable disputes may settle – unless, of course, the parties are so bloody-minded that the outcome is inevitable.
June 28, 2011