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Non-Court Dispute Resolution, a changed approach

View profile for Katie Phillips
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In April 2024, there was a change in the Family Procedure Rules, which placed a greater emphasis on the importance of Non-Court Dispute Resolution (NCDR).

This does not mean that prior to these rule changes, NCDR was discouraged, but the changes have now given the Court a wider toolkit to encourage parties to resolve matters away from Court. It was described in one article in the Financial Remedies Journal as a “fresh carrot, bigger stick”.

The Court also introduced a form, and known as FM5, and amended the Form A (which is the application which kickstarts the financial remedies procedure). The FM5 is a “Statement of position on NCDR”, and there is a requirement for both the Applicant and the Respondent to file their own versions of the form. It is 6 pages, and must be completed to identify whether mediation, arbitration, neutral evaluation, collaborative law, or other non-NCDR options have been explored. This is likely to be used by the Courts going forward to identify whether or not the parties have really given NCDR real consideration, and if not, allow Judge’s to actively manage cases.

The first real test of the amended rules came in the case of NA v LA [2024] EWFC 113, which was heard by Mr Nicholas Allen KC, who was sitting as a Deputy High Court Judge. He is an advocate for NCDR, being a trained Arbitrator himself.

In that case, the Judge was hearing a return date, on 23 May 2024. This followed the making of two Orders on 14 May 2024, which included an ex-parte (without notice) Non Molestation Order and Occupation Order, and an Order under R20.2(1)(c) which permits the Court to make an interim order for the “detention, custody or preservation of relevant property”. This was regarding the preservation of two London properties, and it was not that the wife in that case was seeking a Freezing Injunction under Section 37, of the Matrimonial Causes Act 1973, which would have required the wife (who had sought the orders) to demonstrate an intention to dissipate the assets.

The Judge in this case considered with very careful scrutiny whether or not prior to the applications by the wife, NCDR had been fully explored. When the Judge made the Order on 14 May 2024 (being Mr Justice Peel) the issue of NCDR was raised, but it does not appear from the Judgment that this was explored fully by the parties, or that proceedings were put on hold whilst NCDR was explored.

The Judge in this case, at paragraph 31 of his Judgment, said “I consider NCDR to be appropriate and I wish to encourage the parties to engage in the same. This will be to their emotional and financial benefit as well as the benefit of their children”.

The Judge then went on to “stay” the proceedings. This means that he has put the proceedings on hold, and required the parties to explore NCDR. He went further by ordering that a letter to be sent to the Court, to him directly, setting out what engagement (if any) there had been with NCDR, whether any of the issues in the proceedings had been resolved, and setting out their proposals for the way forward. He then made provision that upon receipt of the letter he shall “decide the appropriate way forward”. This therefore gives the Judge continued input in relation to matters, and has given a very clear encouragement to the parties to pursue NCDR, as a way to resolving their dispute without the Court’s intervention.

Whilst this may be a “big money case” with the parties having property in the UK worth a reported £8m (mortgage free), a second London property worth circa £6.5m (again mortgage free) and a property in Athens worth approximately €3m, and further extensive assets, the principal still should be applied in every case that comes before the Court. It is clear that NCDR is a “hot topic” and failure to fully engage in NCDR not only could result in proceedings being stayed (put on hold) but also costs penalties against the refusing party.

Despite the above, NCDR is not always suitable for every case, and every party, but it certainly should be considered in every case and by every party and their lawyers. There are many NCDR options available, to suit every budget, or case, and your lawyer can advise you further.

If you have any questions regarding NCDR, or whether this is something that could be applicable in your case, please don’t hesitate to contact a member of the Family Team.