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You are here: BAILII >> Databases >> England and Wales High Court (Family Division) Decisions >> X (Financial Remedy: Non-Court Dispute Resolution), Re [2024] EWHC 538 (Fam) (08 March 2024) URL: https://www.bailii.org/ew/cases/EWHC/Fam/2024/538.html Cite as: [2024] EWHC 538 (Fam), [2024] WLR(D) 116, [2024] 2 FCR 528, [2024] 4 WLR 28 |
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representatives
of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of
court.
COURT
OF JUSTICE
FAMILY DIVISION
Courts of JusticeStrand, London, WC2A 2LL |
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B e f o r e :
____________________
X |
Applicant |
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- and |
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| Y |
Respondent | |
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Re X ( Financial Remedy: Non-Court Dispute Resolution) |
____________________
Alexander Thorpe KC for the
Respondent
Hearing date: 17 January 2024
____________________
Crown Copyright ©
remotely
at 10.30am on 8 March 2024 by circulation to the parties or their
representatives
by e-mail and by
release
to the National Archives.Mrs Justice Knowles:
court
process is not always suited to the
resolution
of family
disputes.
These are often best
resolved
by discussion and agreement outside of the
court
arena, as long as that process can be managed safely and appropriately.
court's
expectation that a serious effort must be made to
resolve
their differences before they issue
court
proceedings and, thereafter, at any stage of the proceedings where this might be appropriate. Furthermore, I want to signal that, at all stages of the proceedings, the
court
will be active in considering whether
non-court
dispute
resolution
is suitable. Changes to the Family Procedure Rules 2010 ("the FPR") which are due to come into effect on 29 April 2024 will give an added impetus to the
court's
duty in this
regard.
court.
This ruling focuses on that which is pertinent to the subject of
non-court
dispute
resolution.
review
in
financial
remedy
proceedings in
relation
to a 15-year marriage which came to an end on 7 June 2022. The final hearing is due to take place before me in June 2024. The parties have an 11-year old daughter and there are separate Children Act proceedings listed for a three day hearing on 25 March 2024.
financial
asset base is somewhere between £27m to £29m. This is a needs based case and the parties have made open offers to each other - the husband in July 2023 and the wife in November 2023 in an effort to
resolve
the
financial
remedy
proceedings. The parties participated in an FDR in July 2023 which
regrettably
did not settle their
dispute.
I learned today that the parties never engaged in any form of
non-court
dispute
resolution
before issuing either
financial
remedy
or children proceedings. I
regard
their failure to do so as utterly unfathomable.
relating
to the
financial
remedy
proceedings amount to £581,000 to date. The projected costs going forward amount to £511,400. Therefore, the total amount spent, if this matter proceeds to a final hearing, will be close to £1.1m. That sum excludes the cost of the children proceedings, which will cost at least another £300,000 on a conservative estimate. Using the lower of the two valuations of the matrimonial assets, those legal fees in total would
represent
about 5% of the total assets.
court
with a duty to consider if
non-court
dispute
resolution
is appropriate at every stage in proceedings (my emphasis). When considering whether
non-court
dispute
resolution
is appropriate, rule 3.3.(2) states that the
court
must take into account whether (a) a MIAM (a family mediation information and assessment meeting) took place; (b) whether a valid MIAM exemption was claimed or mediator's exemption was confirmed; and (c) whether the parties attempted mediation or another form of
non-court
dispute
resolution
and the outcome of that process. Rule 3.4.1(a) states that, where appropriate, the
court
may direct that proceedings or a hearing in the proceedings be adjourned for a specified period in order to enable the parties to obtain information and advice about, and consider using,
non-court
dispute
resolution.
Rule 3.4(1)(b) states that adjournment for a specified period may also be appropriate where the parties agree to participate in
non-court
dispute
resolution.
The
court
may make such directions on application of the parties or of its own initiative.
read
in the context of the
court's
overriding objective to deal with cases justly having
regard
to any welfare issues (rule 1.1(1). Rule 1.1(2) states that dealing with a case justly includes, as far as practicable, the saving of expense and the allocation of an appropriate share of the
court's
resources.
The
court
also has a duty of active case management (rule 1.4(1)), amongst which is encouraging parties to use a
non-court
dispute
resolution
procedure if the
court
considers that appropriate and facilitating the use of such procedure (rule 1.4(2)(f)), and helping the parties to settle the whole or part of the case (rule 1.4(2)(g)).
court
power to
require
parties to engage in
non-court
dispute
resolution.
Rule changes on 29 April 2024 will promote the
court's
ability to encourage parties in
financial
remedy
and children proceedings to use natural gaps in the proceedings' timetable for the purpose of
non-court
dispute
resolution
or to adjourn the proceedings, if necessary, to encourage the parties to try
non-court
dispute
resolution.
Amendments to the costs sanctions the
court
can impose in
financial
remedy
proceedings will take into account conduct
relating
to a failure either to attend a MIAM or to attend
non-court
dispute
resolution.
resonance
within the wider litigation landscape in civil proceedings. The
court's
general powers to compel parties in civil proceedings to engage in
non-court
dispute
resolution
was highlighted by the case of Churchill v Merthyr Tydfil County Borough Council and Others [2023] EWCA Civ 1416 (29 November 2023) ("Churchill v Merthyr Tydfil").
Court
of Appeal was constituted of the Lady Chief Justice of England and Wales, Sir Geoffrey Vos, Master of the Rolls, and Lord Justice Birss, the deputy head of civil justice. The issue in Churchill v Merthyr Tydfil was whether the
court
could order the parties to
court
proceedings to engage in a
non-court-based
dispute
resolution
process, and, if so, in what circumstances it should do so.
non-court
dispute
resolution
against their will. The case of Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 decided there was no such power, Dyson LJ stating that, to oblige truly unwilling parties to mediate, would be to impose an unacceptable obstacle on their right of access to
court.
However, in Churchill v Merthyr Tydfil, the
Court
of Appeal concluded that the dicta of Dyson LJ were not a necessary part of the
reasoning
that led to the decision in Halsey and were therefore obiter [see paragraphs 18-19].
review
of domestic and international case law, the
Court
of Appeal held that the
court
had the power to compel parties in civil proceedings to engage in
non-court
dispute
resolution
and/or stay proceedings to allow for
non-court
dispute
resolution
to take place. How a
court
should exercise its discretion to compel the parties was set out by the
Court
of Appeal in paragraph 65:
The
court
should only stay proceedings for, or order, the parties to engage in a
non-court-based
dispute
resolution
process provided that the order made does not impair the very essence of the claimant's right to proceed to a judicial hearing, and is proportionate to achieving the legitimate aim of settling the
dispute
fairly, quickly and at
reasonable
cost.
Court
of Appeal listed in paragraph 61 of Churchill and Merthyr Tydfil a variety of matters which the Bar Council suggested that a
court
may wish to take into account when determining whether or not to exercise its discretion to compel parties to engage in
non-court
dispute
resolution.
However, the
Court
of Appeal ultimately concluded that it would be undesirable to endorse such a checklist for judges to operate, as the judiciary was well equipped to decide how to bring about a fair, speedy and cost-effective solution to
disputes
in accordance with the overriding objective.
relevance
to family proceedings. To make that assumption is unwise. The active case management powers of the CPR mirror the active case management powers in the FPR almost word for word and both the civil and the family
court
have a long-established right to control their own processes. The settling of cases quickly supports the accessibility, fairness and efficiency of the civil, and I emphasise, the family justice system. As Sir Geoffrey Vos, MR stated in paragraph 59 of Churchill v Merthyr Tydfil:
" even with initially unwilling parties, mediation can often be successful. Mediation, early neutral evaluation and other means ofnon-court
based
dispute
![]()
resolution
are, in general terms, cheaper and quicker than
court-based
solutions. Whether the
court
should order or facilitate any particular method is a matter for the
court's
discretion, to which many factors will be
relevant."
Though the FPR rule changes due on 29 April 2024 do not go as far as compelling parties to proceedings to engage in
non-court
dispute
resolution,
the agreement of the parties to an adjournment for that purpose will no longer be
required.
Instead, the family
court
may where the timetabling of the proceedings allows sufficient time for these steps to be taken "encourage" the parties to obtain information and advice about and consider using
non-court
dispute
resolution
and "undertake
non-court
dispute
resolution"
(rule 3.4(1A) with effect from 29 April 2024). The accompanying Practice Direction 3A has been amended and makes clear that the
court
may also use its powers to adjourn proceedings to encourage the use of
non-court
dispute
resolution
(rule 4.1). In
financial
remedy
cases, the power to encourage even unwilling parties will be
reinforced
by an amended rule 28.3(7) which will make the failure, without good
reason,
to engage in
non-court
dispute
resolution
a
reason
to consider departing from the general starting point that there should be no order as to costs.
Non-court
dispute
resolution
is particularly apposite for the
resolution
of family
disputes,
whether involving children or finances. Litigation is so often corrosive of trust and scars those who may need to collaborate and co-operate in future to parent children. Furthermore, family
resources
should not be expended to the betterment of lawyers, however able they are, when, with a proper appreciation of its benefits, the parties'
disputes
can and should be
resolved
via
non-court
dispute
resolution.
Going forward, parties to
financial
remedy
and private law children proceedings can expect at each stage of the proceedings - the
court
to keep under active
review
whether
non-court
dispute
resolution
is suitable in order to
resolve
the proceedings. Where this can be done safely, the
court
is very likely to think this process appropriate especially where the parties and their legal
representatives
have not engaged meaningfully in any form of
non-court
dispute
resolution
before issuing proceedings.
recognised
that it was desirable to try to
resolve
their
financial
dispute
by means of
non-court
dispute
resolution
in advance of the
financial
remedy
hearing in June 2024. There was time to do so without adjourning the final hearing. To concentrate minds, I approved directions for valuations and the like which would not take effect until mid-March 2024 so that energy and costs would not be expended on litigation whilst the parties were trying to
resolve
their differences. Though I was not seised of the children proceedings, I expressed the hope that the parties might also
resolve
these given that it was agreed that the child concerned should see, visit and stay with both her parents.
non-court
dispute
resolution,
applying the factors more apposite to family
disputes
from the list set out in paragraph 61 of Churchill v Merthyr Tydfil. Thus, both parties were legally
represented
and an adjournment would not have prejudiced either party's case for
financial
relief
(or incidentally their
respective
cases on how their child's time should be divided between them). In those circumstances,
non-court
dispute
resolution
was likely to be effective and appropriate. Moreover, the costs of
non-court
dispute
resolution
were undoubtedly cheaper than those of litigating to a contested hearing and there was a
realistic
prospect that settlement might be
reached
given the very narrow difference between the parties'
respective
open offers. Any imbalance between the parties as to
resources
and bargaining power was not so significant that it might be a source of prejudice to the weaker party. Finally, neither party had ever tried
non-court
dispute
resolution
and so could give no convincing
reason
not to engage in that process.
resolve
their
dispute
or have narrowed the issues between them. I very much hope that they can. This would be to their emotional and
financial
benefit as well as to the benefit of their child. I urge them to engage meaningfully in this process very belated in this case - and to
recognise
the
real
advantages that will flow from
resolving
their
dispute
away from the
courtroom.