A recent family court judgment serves as a warning to court users that ‘non-court dispute resolution’ (NCDR) is more than just a buzz phrase.

Senior paralegal Mollie Mann examines the decision in NA v LA [2024], the first reported decision in which the court has stayed proceedings of its own initiative to encourage NCDR despite the objection of one of the parties.

Background

The judgment by Nicholas Allen KC (sitting as deputy High Court judge) follows a return hearing held on 23 May 2024. This hearing took place after the wife, who had initiated proceedings, obtained ex-parte non-molestation and occupation orders and an interim order for the “detention, custody or preservation” of the parties’ two London properties. Additionally, she issued divorce and financial proceedings, following which she filed applications for interim maintenance and a legal services payment order to cover her legal costs. Significantly, until he was served, the husband maintained he was unaware the marriage was over and that his wife intended to proceed with a divorce.

On the return hearing date, the parties negotiated outside court and sought Nicholas Allen KC’s approval of three agreed orders. These provided for replacing the non-molestation and occupation orders with undertakings, for the husband to pay monthly interim maintenance of £29,500 and for a legal services provision of £185,000 to meet the wife’s legal fees up to the first appointment. The family home was to be transferred into the wife’s sole name with the preservation order discharged.

Application of the Family Procedure Rules

Having approved the three orders, the judge said he was considering staying the proceedings of his own initiative as he was entitled to do so under revisions to the Family Procedure Rules (FPRs) that came into effect on 29 April 2024. Under these revisions, the court has a duty at every stage in proceedings to consider whether non-court dispute resolution is appropriate. Where “the timetabling of proceedings allows sufficient time for these steps to be taken”, the court should “encourage parties” to “undertake non-court dispute resolution”. The court’s powers have been extended to allow it to give directions of its own initiative.

The FPRs required the judge to allow both parties to make representations before he stayed the proceedings. The husband made no objections. The wife’s counsel made the case that the wife knew little about the husband’s financial position and required further disclosure before any stay for the purpose of attempting NCDR. The judge rejected this position, stating that “there is no need for financial disclosure to be given prior to parties engaging in NCDR. NCDR will almost invariably provide for such disclosure to be given as part of the process.”

Nicholas Allen KC held that nothing in the facts of the case prevented it from being suitable for NCDR. He said that the case, while potentially “big money”, did not appear “unduly legally complex” and commented that this was “a paradigm case for the court to exercise its new powers”.

As such, the judge stayed the proceedings and declined to list a first appointment. Instead, he directed a joint letter from the parties be produced, indicating (i) what engagement there has been with NCDR, (ii) whether any of the issues in the proceedings have been resolved, and (iii) their respective proposals for the way forward.

Costs

The wife had incurred considerable costs to date of £125,000, and the court took the opportunity to remind the parties to keep the issue of costs and proportionality “very much at the forefront of their minds”. This follows from the court’s power to “encourage” NCDR”. This is backed by an amendment to the costs rules, making any failure by a party, without good reason, to attend NCDR a reason to depart from the starting point that there should be no order as to costs.

Stephen Foster, partner and Head of the Divorce and Family team, comments: “The decision of Nicholas Allen KC in this case should clear any lingering doubt about the seriousness with which the court is approaching the new FPR rules, particularly in relation to its willingness to give directions of its own initiative to encourage NCDR. We will continue to actively consider resolution outside of court with our clients at each stage of proceedings.”

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