In April 2024, the Family Procedure Rules (FPR) were revised to encourage parties to consider non-court dispute resolution (NCDR), among other changes.

Carla Ditz, Fiona Porter and Emily Chalk of Stewarts explore those changes to the FPR and the judgment of Mrs Justice Knowles in X v Y, which highlights the changes and importance of NCDR in financial remedy and private children proceedings.

New rules in relation to NCDR

The court must consider the overriding objective to deal with cases justly, with a suitable allocation of court resources and without incurring disproportionate expense.

While the new rules, arguably regrettably, do not give the court the power to require parties to attend NCDR, the court now has a duty to consider, at every stage in proceedings, whether NCDR is appropriate (FPR r3.3(1) and PD3A para 10A).

When considering its appropriateness, the court will take into account whether a mediation information and assessment meeting (MIAM) has taken place, a MIAM exemption has been claimed and is valid and/or whether the parties have attempted any NCDR.

The changes to the FPR, which came into effect on 29 April 2024, promote and enforce the court’s powers to encourage NCDR in private children law and contested financial remedy matters. The main changes are:

• the court will now be able to compel a party to file and serve a form setting out their views on using NCDR in the proceedings (FPR 3.3(1A))
• the court can encourage (where the timetable of proceedings allows) parties to obtain information about, consider using and undertake NCDR (FPR 3.4(1A))
• the court can adjourn proceedings without the agreement of the parties to encourage parties to undertake NCDR including attend a MIAM (particularly where an exemption is no longer valid) (PD 3A and 4.1)
• in financial remedy proceedings, the court can make a costs order where there has been any failure by a party, without good reason, to engage in NCDR (FPR 28.3(7)). This will be a reason for the courts to consider a departure from the general rule in family proceedings that there shall be no order as to costs.

How will the courts apply this?

The best current indication of how the family court will apply the changes to the FPR rules can be found in the judgment of Mrs Justice Knowles in X v Y, which solely focuses on the importance of NCDR within family proceedings. While there was no disagreement between the parties as to the judge’s proposed course of action, Mrs Justice Knowles considered her judgment would be useful for family practitioners and parties to proceedings alike to understand the court’s expectation that there should be a “serious effort” to settle matters outside of the court process at all stages of proceedings, including before commencing proceedings.

Parties to financial remedies and private children’s proceedings should expect active case management by the court on this issue, including ongoing reviews of whether NCDR is suitable and has taken place. Where NCDR can be done safely, it is “very likely” the court will deem NCDR is appropriate, particularly if the parties have not engaged in NCDR previously.

Throughout her judgment, Mrs Justice Knowles sets out the importance of NCDR, highlighting the benefits for managing parental relationships, preserving family resources and stating that litigation “is so often corrosive of trust and scars those who may need to collaborate and co-operate in future to parent children.” She focuses on the then upcoming changes to the FPR, explaining how these will increase the impetus on the courts and parties to prioritise NCDR. In the matter before her, the parties had failed to engage in any form of NCDR before issuing proceedings, which Mrs Justice Knowles coined “as utterly unfathomable”.

Broader implications considered by the court

In her judgment, Mrs Justice Knowles considered the approach to NCDR within civil proceedings and the interplay this has with family proceedings. In civil litigation, the courts can compel parties to engage in NCDR (and stay proceedings for that purpose), as recently found in the case of Churchill v Merthyr Tydfil County Borough Council and others [2023]. While the matter of Churchill concerns civil proceedings, Mrs Justice Knowles highlighted that the case management powers of the CPR are similar to those of the FPR and that to think of the Churchill judgment of limited relevance to family proceedings would be “unwise”.

Mrs Justice Knowles caveated that the court should only compel parties where 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”. There is no defined checklist when considering the appropriateness of NCDR; the court is well-equipped to use its discretion.

What does this mean in practice?

The importance of considering and promoting NCDR is well established within family proceedings, where appropriate. That being said, the court is clearly now emphasising the importance of NCDR. More than ever, NCDR should be at the forefront of the parties’ minds, or they may find themselves at the wrong end of a costs order.

A few practical points to consider as these new rules are implemented are:

1. Before commencing proceedings (children and finances), all practitioners and parties should consider whether NCDR is appropriate.
2. All NCDR offers should be considered seriously and only rejected for good reason, or the parties will risk cost consequences.
3. While not all matters may be suitable for NCDR, it is worth considering whether NCDR can deal with part of a claim to narrow the issues and lessen the pressure on court time and resources. Within the court’s powers of active case management, it has a duty to encourage parties to partake in NCDR, if appropriate, if it would facilitate and/or help parties settle their case in whole or part.
4. If there are natural breaks in your proceedings, consider whether these can be used to engage in NCDR, even if you would prefer the court timetable to continue running in the background, as the courts may order that this takes place in any event.

Comment

Partner Matthew Humphries says: “This is a wonderful opportunity for fundamental changes in the operation of the Family Court, which can serve to alleviate increasing delays in the court and pressure on the overworked judiciary. The Divorce and Family team at Stewarts has long been advocating for an increased use of arbitration, which brings swifter resolution to disagreements in a private and confidential setting. I hope these rule changes encourage other family lawyers to embrace arbitration and other forms of NCDR in the same way we have, and that all the judiciary facilitate them doing so by also adopting the strong directives of Mrs Justice Knowles.”

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