What is the impact of Non-Court Dispute Resolution in family matters?

Changes to the Family Procedure Rules (FPR) to encourage the use of Non-Court Dispute Resolution (NCDR) in family matters came into effect on Monday 29 April 2024. In summary, the changes:

1. Lessened the exemptions to completing the Mediation Information and Assessment Meeting (MIAM), required in most private family cases before a court application is issued;
2. Required parties to update the Court by filing open statements of their position on and attempts to make use of Non-Court processes;
3. Imposed duties on the Court to scrutinise compliance with the FPR to ensure that opportunities to settle matters have not been overlooked; and
4. Provided the Court with powers to impose adjournments of hearings to encourage the take up of Non-Court options; and brought into sharp focus the prospect of Costs Orders for breach of the FPR.

Furthermore, the definition of NCDR at FPR 2.3(1)(b) was widened to mean “methods of resolving a dispute other than through the Court process, including but not limited to mediation, arbitration, evaluation by a neutral third party (such as a Private Dispute Resolution process) and collaborative law.”

As a result, a form FM5 now has to be lodged with the Court within Court proceedings at least seven days before the first hearing, i.e. the First Appointment in Financial Remedy Proceedings, and the First Hearing and Dispute Resolution Appointment (FHDRA) in Private Law Children Proceedings. Alternatively, it needs to be lodged within such other period before a hearing as the Court may direct.

The effect of these changes

This significant change in the FPR has been real progress and it is a change that should be embraced by everyone in the Family Law world. The stress and financial burden experienced by families in contested family proceedings should now be lessened as a result, and indeed the Private Dispute Resolution Process (using private Judges to help couples to achieve agreements) has been revolutionary in the Family Law setting. It is also possible to resolve matters very early on using other out-of-Court processes too, such as mediation, the collaborative process, arbitration, or through an early opinion being given in early neutral evaluation.

However, when the rule change came about last year, there was a question mark over how much Courts would intervene to impose adjournments of hearings to encourage the take-up of Non-Court options.

Lessons learnt from NA v LA

The recent case of NA v LA [2024] is testament to the fact that Judges are actively encouraging litigating parties to use out-of-Court processes and vigorously promoting the new rules.

In this case, the Court put the wife’s financial remedy application on hold to allow the parties to engage in NCDR. The Judge found that the initial urgency in the case had fallen away, Orders having been made to preserve various assets etc. and the urgency was therefore no longer a good reason for refusing to engage in NCDR, nor were objections to NCDR by one of the parties. The wife’s representatives were firmly of the view that the wife knew very little about the husband’s financial position and sought Orders for disclosure from the Court before NCDR could be considered. However, the Deputy High Court Judge (Nicholas Allen KC) stated that there was no need for financial disclosure to be given prior to parties engaging in NCDR. NCDR would almost invariably provide for such disclosure to be given as part of the process and that many forms of NCDR also had “teeth” if there was, for instance, a reluctant discloser. If, for example, the parties opted for financial arbitration, and a party disobeyed the arbitrator’s Order, then the Court could make an Order requiring a party to comply with an Order made by the arbitration Tribunal.

The Judge held that this was a paradigm case for the Court to exercise its new powers. The Court considered NCDR to be appropriate and wished to encourage the parties to engage in it. This would be to their emotional and financial benefit as well as to the benefit of the children. However, if the parties were to tell the Court (by way of a joint letter sent by email to the Court) by a certain date (i) what engagement (if any) there had been with NCDR, (ii) whether any of the issues in the proceedings had been resolved, and (iii) respective proposals for the way forward, then on receipt of that letter, the Court would decide the appropriate way forward.

The parties were urged to keep the issue of costs and the proportionality of incurring costs very much at the forefront of their minds. They were told that the Court would certainly do so when considering the appropriate way forward for this case.

It is imperative therefore that NCDR is to be considered at all times, not only at the outset of a matter but importantly, during the lifetime of the proceedings themselves and on a constant basis.

A year on from the FPR changes and the courts are actively staying proceedings and ordering NCDR. A sea change has taken place.

If you have questions or concerns about NCDR, or any other family matter, please contact Emma Harte.