“The First Rule of FDR Club….”

Recent legislative and judicial developments continue to emphasise the importance of resolving disputes, wherever possible, outside the formal court process. Private Financial Dispute Resolution (FDR) hearings and arbitration are now well-established features of this landscape, and both have been the subject of renewed attention through the Family Procedure Rules amendments and the 2025 Arbitration Act.

The benefits over court hearings include:

• Choice and expertise: Parties can choose a judge/evaluator with the precise expertise match for their case (e.g. complex ancillary relief, trusts, high-net-worth assets).  
• Focus and preparation: The evaluator is dedicated to the single hearing, rather than juggling multiple court matters, and ideally will read all papers in advance.  
• Speed & flexibility of scheduling: Private FDRs avoid the delays and listing constraints of public courts, helping parties to advance resolution sooner.  
• Confidentiality: What is said and done in the private FDR is typically protected from disclosure in later proceedings, encouraging frank negotiation (subject to narrow exceptions).  

The confidentiality of private FDRs has been reinforced in recent case of BC v BC [2025] EWHC 2016 (Fam), where Peel J confirmed that statements made during a private FDR are protected by the same confidentiality principles that apply in court-based FDRs, and that only limited factual information (such as attendance and timing) may later be referred to in proceedings. The issue was whether the respondent husband was entitled to refer to events which took place at a private FDR. The applicant wife contended not and sought an order excluding certain material from the husband's open offer made shortly after the pFDR. The court found that statements in the husband's open offer, referring to the wife's actions during the pFDR, breached the principle of confidentiality that underpins the process. It determined that such references were impermissible and directed their removal from the offer to uphold the sanctity of the pFDR process.

This decision follows the decision in LS v PS (Q Company (a litigation lender) intervening) [2021] EWHC 3508 (Fam), [2022] All ER (D) 05 (Jan) where an anonymous specialist litigation funding provider was granted permission to intervene in concluded financial remedy proceedings, where the applicant wife owed them approximately £1m. The litigation funder sought to set aside of a consent order made at a private FDR. The order left the wife without the resources to repay the litigation funder. The litigation funder sought disclosure of all without prejudice correspondence from the date of the original final hearing, all offers to settle since that date, and a Zoom recording of the private FDR. The court had to balance the competing policy considerations when deciding whether to go behind FDR privilege. A very high value was placed upon the privacy of the FDR process as a whole, both within and outside of the court system and refused to allow the disclosure.

The use of out of court dispute resolution, has been encouraged by the Family Procedure (Amendment No. 2) Rules 2023, which came into force on 29 April 2024, which introduced a clearer definition of non-court dispute resolution (NCDR) and placed a stronger duty on the court to consider such methods at all stages of proceedings. NCDR now expressly includes mediation, arbitration, collaborative law, and private FDRs or early neutral evaluations.

In the civil sphere, the Court of Appeal’s decision in Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416 confirmed that courts may stay proceedings to encourage or require parties to participate in ADR, provided this does not prevent access to justice. That principle has since been reflected in updated Civil Procedure Rules.

In GH v GH [2024] EWHC 2547 (Fam) Peel J confirmed the importance of the financial dispute resolution hearing where there was an attempt by the parties to bypass the process. Peel J found that the judge should not have dispensed with the FDR. His Lordship highlighted that the absence of any attempts by the parties at non-court dispute resolution made the need for an FDR all the more pressing. 

Parallel developments in the Arbitration Act 2025 have modernised the statutory framework first set by the 1996 Act. The Arbitration Act 2025 consolidates the UK’s position as a leading seat for arbitration and introduces refinements aimed at improving procedural clarity. The Act limits the ability of parties to raise new evidence at the stage of jurisdictional challenge, enhances court assistance in interim relief, and codifies arbitrators’ obligations of impartiality and disclosure.

These measures seek to ensure that arbitration remains a reliable and efficient means of resolving disputes under English law. In family law, arbitration continues to provide a binding, private means of determining financial and some child-related disputes. The Family Law Arbitration Schemes remain consistent with the broader legislative movement encouraging parties to pursue non-court routes wherever suitable.

In Re X (Financial Remedy: Non-Court Dispute Resolution) [2024] EWHC 538 (Fam), Knowles J highlighted the importance of engaging with non-court processes, observing that many disputes are capable of resolution through negotiation once the framework of NCDR is properly understood and supported by legal advisers.

On 29 September 2025 the President of the Family Division, Sir Andrew McFarlane, announced that the London Financial Remedies Court will reduce its sitting days between October 2025 and March 2026. Indicative listing times are now expected to be first appointments within 16 weeks of issue; financial dispute resolution hearings within six months of the first appointment and final hearings within eight to nine months of the FDR. The benefits of early resolution of disputes is clear. 

42BR barristers act both as advocates and as neutral evaluators or arbitrators across a wide range of disputes, including family finance, commercial, and cross-jurisdictional matters. Private FDRs and arbitrations can be arranged through chambers by agreement of the parties, with full administrative and remote-hearing facilities available.

The legal landscape in England & Wales is evolving to place greater emphasis on non-court resolution of disputes. The private FDR and arbitration landscapes are evolving rapidly, backed by statutory reform, judicial support, and growing client demand. These mechanisms offer compelling alternatives to court proceedings — combining speed, flexibility and expertise and maintaining privacy. 

9th Oct 2025

Paul Pavlou MCIArb

Call 1993