Early Neutral Evaluation: An Alternative Approach to the Resolution of Financial Remedy Cases

Paul Waterworth writes

One of the fascinations of the practice of family law is the way in which the law itself and the procedures involved in its application, evolve to suit changing social needs and the constant search for more (cost) effective processes. On some issues, it is clear that parliament has been ahead of general public sentiment and on others, the  ever flexible common law has often found ways of finding solutions outside legislation. The adoption of marriage for same sex couples is one example of the former. The latter is exemplified by the partial relief of the plight of unmarried couples in the resolution of property disputes by constructive use of the law of trusts, such as was seen in the case of Stack v Dowden [2007] UKHL 17 in which Lady Hale found that “many factors other than financial contributions may be relevant to divining the parties’ true intentions”.

In the practice of financial remedy applications (still then called applications for “ancillary relief” – even the nomenclature evolves), it is now nearly twenty years since the introduction of Financial Dispute Resolution (FDR) hearings as part of the formal court process. It is easy to forget how revolutionary such a development appeared at the time. By and large, FDR’s have been successful with many cases settling at or soon after such hearings.

It has to be accepted, however, that formal court FDR’s are not without their problems. There is generally acknowledged to be a lack of adequate court time for each hearing. The number of cases listed and the late production by practitioners of case summaries and copies of offers usually means that there is insufficient time for adequate preparation and consideration by the judge. The inappropriate listing of some cases before part time judges with little or no experience of this area of the law renders some FDR’s of little value, at least in court (although at least the parties are brought together which makes discussions more likely). Experience shows that  there is virtually no prospect of finding a solution at a FDR where neither party is legally represented.

FDR’s come at a relatively advanced stage of the formal court process. By then, even in the simplest of cases, much work will have been undertaken, at no little expense to the parties. Hopefully, there will have been an exchange of financial information and “full and frank” disclosure; documents will have been examined in detail; consideration will have been given to the issues, such as whether the case is one in which a departure from equality can and should be argued; pension information will have been obtained and often, expert advice on the possible ways of sharing the benefits. In many cases, valuations of property and other assets will have been prepared and agreed or the cause of disagreement identified; statements will have been drafted and served. Advice will have been tendered by solicitors and sometimes also by counsel and offers and counter-offers made and considered.

One of the great strengths of our system is that the majority of practitioners, seeking to achieve the most suitable result available for their clients, form a view, as a case progresses, as to the likely outcome. Genuine attempts are usually made to find a solution by negotiated agreement between the parties. Even, however, where there is goodwill between the parties (not always obvious)  and their lawyers (usually, but not inevitably present), there can be genuine differences of opinion as to what amounts to the fair solution, which, of course, is the goal of the process.

When Baroness Deech was introducing to parliament her bill seeking to amend the basis upon which financial disputes on divorce were resolved and to replace it with a formulaic approach, she commented that it was recognised that judicial intervention was an excellent method of resolution under the present system. She argued, however, that that intervention came “late” in the process. She also said that the current law in this area, with its wide discretion for judges, was too unpredictable, even though, in her proposed replacement, discretion would be retained where required.

It is clear that there are many cases where lawyers are able to give their clients sound advice as to the likely outcome. There are also many examples where, for whatever reason, such advice is not accepted and the case ploughs on, with ever increasing costs and often growing inflexibility by and rancour between the parties.

It is for some of these reasons that practitioners are increasingly turning to other methods of resolving financial (and other) disputes arising on divorce. One such method which is rapidly gaining traction is the obtaining an early evaluation of the case from a neutral expert, frequently an experienced practitioner not involved in the case or a retired judge. Practitioners are recognising that such a system provides an independent and reliable additional resource which they can utilise for the benefit of  clients and which is cost effective and quick.

Early neutral evaluation has sometimes been described as “private judging”. Technically, the system is evaluation or assessment at any stage of the process, not merely towards the end which, typically, is the case at FDR’s in the court process. Evaluation is  usually undertaken on the joint instructions of the parties but can be undertaken at the instance of only one party. The evaluation can relate to a case as a whole or only part of it, perhaps to a particular asset or issue, even one that is temporary, pending a final settlement.

One of the significant advantages of early neutral evaluation is that it can be take place very much more quickly than can a hearing in court, for it is now commonplace for there to be very considerable delays between the first court appointment and the later FDR hearing. At evaluation meetings, more time, often very much more (a whole day is not uncommon), can be given to the parties than can be accommodated in a busy court list. The process can also be shaped to allow time for the parties, together or separately, if necessary with their legal advisors, to consider privately what has been said at the end or even part way through the process.

The meetings take place in the presence of lawyers and their informal nature means that they are likely also to be useful to those who are not represented and therefore without legal advice.

Early neutral evaluation meetings can be tailored to the needs of the individuals and the case. Assessment can be given in simple cases as well as those which are more complex and can even take place before proceedings have begun. The more information and material the consultant has, the more likely that a clear view can be expressed. The process is confidential and there can be no publicity unless agreed between the parties (which is rare). The parties can decide the extent to which, if at all, what has been discussed at early neutral evaluation meetings can be referred to if the case proceeds to court. The date of the evaluation meeting can be fixed to suit the availability of the parties and the consultant.

The purpose of the evaluation is for the consultant to make an assessment of the case, or part of it and to express a view of the likely outcome. It is only if the parties specifically agree that this should be the case that they would be bound by the assessment: otherwise the consultant has no legal power to decide facts, let alone a case as a whole. The process is advisory to the parties. If an agreement is reached, it will be for the parties to draft a document recording that agreement, normally   followed by an application for a court order (usually but not invariably, with the help of lawyers because of the need to ensure that such documents are legally sound).

Disputes relating to finance, indeed any issues arising on separation and divorce can be painful and bitter. In the traditional court process, it is often only when the parties arrive at court that constructive discussions take place. However, it is inevitable that  parties, when at court, usually feel under extreme pressure: it is undesirable, if there is a viable alternative, that they should be asked to make immediate decisions on very important decisions, frequently involving lasting consequences.  

All the evidence shows that parties find the process of resolving disputes in court perplexing, stressful, protracted, worrying, long and expensive. The rationale of early neutral evaluation is to remove some if not all of these disadvantages. The benefits to each party and any children in finding a fair and satisfactory solution are clear and settlements reached by agreement are very much more likely to be adhered to.

Early neutral evaluation will not suit every case and solutions will not always be found or accepted by the parties. It is, however, an additional resource which practitioners will find provides extra scope towards the settlement of disputes, with the resultant increase in satisfied clients

Paul Waterworth is a retired District Judge and a consultant with the Financial Resolution Consultancy

at Magdalen Chambers in Exeter where he is an associate.