The Ministry of Justice and HM Courts & Tribunals Service have just begun a year long pilot of an express financial remedy application process, designed to provide a better way to resolve cases where the assets are of a modest size.
Until now, all applications to the Family Court for financial remedy orders in divorces, dissolutions and judicial separations use the same standard procedure, regardless of whether the parties are princes or paupers (save for the limited number of cases where an accelerated procedure applies).
There are usually three stages to the standard procedure:
- A first appointment (often informally, but inaccurately referred to as a first directions appointment or FDA by lawyers)
- A financial dispute resolution appointment or FDR
- A final hearing
At the FDA, the court manages the case. If a financial questionnaire needs answering and further documentation needs to be produced, the court will order that this happens. It will also order, where necessary, that valuations be obtained in relation to the value of the family home and any businesses or other assets, if they are not agreed. It may also order that the parties jointly instruct a Pensions On Divorce Expert (PODE) to provide a report to assist the parties and the court in assessing how pensions should either be shared or offset against non-pension assets.
At the FDR (probably about six to nine months after the FDA), the parties outline their negotiating positions to the judge, who will then provide them with an informal non-binding indication what he or she thinks that a judge would order if the application proceeded to a final hearing. The parties and their lawyers are then sent out of court to carry on negotiating. As a result, most people tend to reach an agreement at this stage; if a judge tells you that you are seeking too much, this is a huge incentive to settle.
In cases where the parties have managed to get all the information they need in time for the FDA, it can be used as an FDR, but this is often not possible, especially where there are pensions that may need to be shared or offset because a PODE report is needed to do this properly.
Where the parties cannot reach an agreement, the court then sets a date for a final hearing where a different judge, who does not know what the FDR judge’s indication was, will then decide matters.
This process has its pros and cons. It’s very efficient and you get the court’s assistance at the FDR to reach an agreement. However, it is very slow, very expensive and not always suitable for cases where the assets are not high in value.
The process works well for so-called “big money” cases, where the parties are high net worth individuals. It probably works well for people who are not rich, but are reasonably financially well off. However, the standard procedure does not work so well for parties of more moderate means, who perhaps own a house with a modest amount of equity and a couple of pensions. It is hopelessly unsuitable for parties who have very little in the way of assets or income, but who may still have some kind of financial dispute that needs resolving.
Of course, the first thing that all people considering applying to the court should do is to consider alternatives to court, such as negotiation, mediation, collaborative law or arbitration. These alternatives are usually faster, less risky, less stressful and can be much less expensive. However, where those options are not suitable, an application to the court is probably the only way that the dispute will ever be sorted out. In cases with modest assets, the normal procedure may be excessive, so a pilot to investigate how to better resolve those cases should be welcomed.
The express procedure pilot scheme will run until 3 April 2026 and will apply to cases where the total net assets (excluding pensions) do not exceed £250,000. The pilot courts are in the north of England and the West Midlands, presumably because property values in the south of England are higher and there will be fewer suitable cases there. Although I practise in Essex, it is possible that I may find that one of my cases takes place in a pilot area if one of the parties is based in a pilot area.
Essentially, the pilot scheme is a streamlined version of the standard procedure. The parties have much less time, just 28 days, in which to do their Form E financial statements. The FDA no longer takes place and the first hearing will be an FDR. Details can be found here on the .gov.uk website (albeit that as at 13 April 2025, I can see a couple of inaccuracies, so you may be better off looking at the MoJ’s guidance here).
We shall have to see how well the pilot scheme works. One potential area where I can see a problem is where expert evidence is needed about a pension.
Practice Direction 36ZH, paras 9.21D (5) and (6) set out what steps the parties have to take to jointly obtain market appraisals of the family home, mortgage capacity evidence and a jointly instructed valuation of other assets. This latter provision would include expert evidence from a PODE about pensions.
Where the parties are both legally represented, their solicitors should be trying to get this stuff sorted out beforehand so that they can ensure that the FDR is effective, but in many cases one or both of the parties will not be legally represented. In cases where the assets are modest, I suspect that the number of litigants in person will be higher than higher value cases.
This makes it a lot harder to get the parties’ ducks in a row. Where neither party has a solicitor, they often will not appreciate that a PODE report may be needed and will probably assume that a pension CEV provided by their pension fund should suffice. Where only one party is legally represented, the other party may be uncooperative and refuse to co-operate in obtaining a PODE report.
This just increases the likelihood that the FDR is ineffective and has to be used as a directions hearing, effectively the same as the first appointment in a standard procedure case. The FDR would then have to take place at a later date, negating the advantage of the express procedure, unless the court decides to skip the FDR and proceed to a final hearing (which is rare as it is not supposed to do this without a very good reason). Given that an FDR is firstly an excellent way to resolve a financial dispute at a relatively early stage and that secondly, a final hearing will take up a full day of the court’s time compared to a one hour FDR, this would not be a sensible use of the court’s limited resources.
It is possible to apply to change to the standard procedure and the court may grant this where it appears that it will not be possible to have an effective FDR – but few litigants in person are likely to appreciate the need for that.
An upper limit of £250,000 in net assets may seem high to some, but there are many couples, even in the south of England who own a house with less equity than that, and who may have pensions with significant CEVs, especially if they work in the public sector. I often act for clients in cases involving the Armed Forces Pension Fund, NHS Pension Fund and Teachers’ Pension Fund. These funds can be incredibly slow to produce cash equivalent valuations. The express procedure says that the FDR will take place within 16 to 20 weeks of the application being issued by the court. I would not be confident that these CEVs would be provided by these public sector funds in time for the FDR, let alone that a PODE report could be obtained that quickly.
Many clients on limited incomes and with moderate or minimal assets often baulk at the prospect of paying for a PODE report that can often cost £2000 to £3000, possibly more. It is difficult to see how an express procedure FDR judge will be able to indicate how pensions should be dealt with where no CEVs and/or no PODE reports are available.
The purpose of a pilot scheme is of course to see what works and what doesn’t. I think that the issue of pensions and PODE reports in cases involving litigants in person may be a serious problem for the express pilot scheme, albeit that this is an existing problem in the standard procedure. We shall see if the pilot helps the court to find a workable solution.
13 April 2025
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