With the introduction of the Family Procedure Amendment 2 rules in April 2024, family law practitioners are encouraged to resolve financial disputes at the start of divorce proceedings. This aims to reduce delays and promote a more efficient resolution process. The recent case of NA v LA has highlighted the court’s commitment to non-court dispute resolution (NCDR), emphasising the importance of attempting these methods before resorting to litigation.
The robust approach taken by the court in NA v LA represents a significant shift. The court stayed proceedings, requiring the parties to engage in non-court negotiations. The ruling underlines the necessity of attempting NCDR before bringing a case to court, even in the absence of complete financial disclosure.
Fair Result’s Approach
At Fair Result, we have always advocated for sensible and realistic financial resolution from the outset of a case. Most divorcing couples are aware of their financial landscape, including the value of their home, bank accounts, and debts. Negotiations should begin promptly, ideally within two to three weeks, even if some financial details, such as pension values, are still being obtained.
The courts have introduced a new form (FM5), requiring parties to submit their views on the suitability of NCDR at the start of the divorce process. This should be submitted alongside the divorce application, focusing the parties on settlement and negotiation immediately.
Emphasis on Non-Court Dispute Resolution
NCDR should be a priority for all parties involved in family law disputes. The judgment in Re X 2024 EWHC 538 emphasised the court’s expectation for serious efforts to resolve disputes outside of court. This judicial emphasis is expected to speed up financial resolution for divorcing couples.
NCDR Methods Going Forward
- Mediation: Mediation, including hybrid mediation with support from solicitors and accountants, can be used at the outset. Shuttle mediation can also be effective if parties prefer not to be in the same room.
- Collaborative Family Law: Involves roundtable meetings where disputes are resolved through sensible and achievable approaches without court involvement.
- Private Financial Dispute Resolution (FDR) Hearings: Parties can appoint a qualified judge to assist with negotiations, focussing entirely on the case without the rush of a court environment.
- Arbitration: If other NCDR methods fail, parties can appoint an arbitrator to decide specific aspects of their case, agreeing to be bound by the decision.
These methods provide a quicker, more cost-effective way to resolve financial disputes, minimising the emotional toll on the parties.
Failure to engage in NCDR without good reason could result in court proceedings, where the court may depart from the general rule of no cost orders. This could lead to cost penalties for parties who do not engage realistically with NCDR.
The new regulations empower the court to encourage NCDR at any time, without requiring the agreement of the parties. Practitioners must reflect on this change and encourage early negotiation and practical dispute resolution.
Final Thoughts
The landscape of family law dispute resolution is changing for the better, promoting quicker and more cost-effective solutions for divorcing couples. For a no-obligation discussion, please feel free to contact us at Fair Result.
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