Non- Court Dispute Resolution (NCDR) in Divorce
When divorcing or separating from your spouse or partner, any agreement reached in relation to finances should be approved by the court, who will approve the agreement as being reasonable and, so far as is possible, dismiss any further financial claims in the future.
However, this does not mean that court proceedings are an essential part of reaching an agreement; recently, the onus has been put on parties using NCDR where possible.
The guide below sets out to explain, as briefly as possible, the different forms of NCDR that are available.
What is NCDR?
NCDR stands for Non-Court Dispute Resolution (previously known as Alternative Dispute Resolution), the umbrella term for the various methods that parties to potential proceedings may use to settle their cases outside court. The law relating to NCDR changed as of 29 April 2024. The definition has now been widened to include mediation, arbitration, evaluation by a neutral third party (such as a private Financial Dispute Resolution process) and collaborative law.
The court expects parties to have fully considered and engaged with NCDR prior to the issuing of any proceedings. A form called the Form FM5 must be completed prior to the first Directions hearing. This sets out the parties’ attempts to resolve matters outside of court, including which methods of NCDR they have engaged with or are willing to engage with. If they have not attended NCDR, they must state whether any exemption still applies and why NCDR is not appropriate in their case.
In addition to this, the court still requires a party making an application for proceedings to complete a MIAM (Mediation Information Assessment Meeting). This is an initial meeting with a mediator to discuss whether or not mediation is appropriate. The exemptions to completing this assessment have been reduced.
In both children and financial proceedings, it is open to the court to make a costs order against a party who has failed to engage with NCDR without good reason. The court may also choose to adjourn proceedings and order both parties to attend some form of NCDR to resolve matters outside of court even if this is not by consent. However, this will be on a case-by-case basis and will not apply to cases of domestic abuse.
Methods of NCDR
Mediation
Mediation is a process in which parties work with a professionally trained and neutral mediator in order to help resolve disputes in relation to children or financial matters. The mediator listens to both parties’ points of view and provides guidance to help narrow the issues whilst remaining impartial. The mediator does not provide legal advice but can provide legal information.
There are different forms of mediation, which can take place in person or online:
1. Mediation where both parties sit together with the mediator.
2. Shuttle mediation, where the parties sit separately, and the mediator goes between the two parties.
3. Hybrid mediation where both parties sit separately with their respective legal representatives.
All discussions had in mediation are ‘without prejudice’ which means that they cannot be referred to or relied upon outside the mediation process and in any subsequent court proceedings. This does not include any discussions relating to either party’s financial disclosure, which is made openly.
If either party does not feel like mediation is working for them then the process can be stopped at any time. It is a voluntary process.
Neutral Evaluation (such as a private FDR)
Neutral Evaluation is where a neutral, qualified third party is jointly instructed by the parties to provide an objective assessment of the likely outcome of the case. This is sometimes called Early Neutral Evaluation, depending on what stage of the case it takes place.
This takes place in a private hearing where both parties are represented by their respective counsel who make submissions to the evaluator on their behalf.
The evaluator is usually a family solicitor, barrister and/or Judge. Their decision (also known as an indication) is not binding on the parties. However, it gives both parties an idea as to how a judge at court may decide on what is the appropriate outcome having considered the particular circumstances of the case, and based on legal principles from statute and case law. Having had the indication, it is hoped the parties use that as a basis from which to negotiate and reach an agreement between them without the need for court proceedings.
As this decision is not binding, the parties are able to maintain some authority over the outcome of the case during the negotiations. A neutral evaluation can take place quite early on in proceedings, which means it can often be the quickest and most effective way in reaching a resolution outside of court.
The FDR being part of the court process, it is possible to “contract out” of court for the FDR, to hold it privately, as it is usually much quicker than waiting for the next available court date.
For more details of Private FDRs, see our guide.
Arbitration
Arbitration is where the parties agree to appoint a suitably qualified third party to adjudicate a dispute and make a decision as to the appropriate outcome. This is similar to being in court; however, the arbitrator is chosen by the parties and is guaranteed to carefully review and consider all of the information in the case, as well as hear from both parties’ counsel. Arbitration can also take place much sooner than waiting for a court hearing to be listed.
When parties sign up to the Family Arbitration Scheme, they agree that the decision of the arbitrator will be binding upon them. Neither party is able to later withdraw from the process. Other forms of NCDR may take place in parallel with arbitration, such as mediation or solicitor negotiation.
Arbitration can take different forms, including:
1. A ‘hearing’ in front of an arbitrator; or
2. By way of written submissions, where both parties prepare and submit their written arguments to the arbitrator to be considered and decided upon. This option is more often used if the issues are discrete.
The arbitrator’s decision will be converted into a court order and then filed with the court.
Although the parties will pay for the cost of the arbitrator, this process is usually more cost-effective than court proceedings as there is no undue delay and less solicitor involvement.
Collaborative Law
Collaborative Law is when both parties instruct a collaboratively trained solicitor and reach an agreement through taking part in four way roundtable meetings. Both parties sign an agreement that they commit to reaching a settlement without issuing court proceedings by working together. If negotiations breakdown, then the parties agree to instruct new solicitors after that.
The roundtable meetings take place in person which means the parties can take an active role in the discussions and tackle the issues in a non-confrontational manner.
This process is suitable for parties who maintain a level of amicability between them but agree that they will benefit from having specifically trained solicitors involved to guide them in reaching a fair settlement.
Solicitor Negotiation
Negotiations through solicitors are an effective way of reaching a resolution, particularly where parties feel less able to communicate directly with each other without the need for court proceedings.
This process can help parties to stay on more amicable terms whilst benefitting from legal advice and guidance. Solicitor involvement enables parties to maintain a level of separation between each other when it comes to important issues of finances and child arrangements and allows parties to focus on the matters which are most important to them. There is a level of flexibility with solicitor negotiations which does not come once court proceedings have been issued.
However, in financial matters, should an agreement not be reached through solicitor correspondence then the court does not consider this alone to be a sufficient attempt at NCDR. Other forms of negotiation between legal representatives, such as round table meetings, may be considered sufficient
depending on when and how they took place. Negotiations through solicitors can often be effective alongside forms of NCDR.
What if NCDR is not appropriate
There may be situations where NCDR is not appropriate. This could include cases involving domestic abuse, financial urgency or non-disclosure, where the input of the court is necessary. Protective financial injunctions may need to be applied for, for example, to freeze assets or set aside transactions.
At Ribet Myles we have extensive experience of both litigation and all forms of NCDR. We can advise you of which options may be the most advantageous to you, and warn you if a court application is necessary to protect your position. To speak to an experienced family lawyer, call us on 020 7242 6000.