All change in the Family Court — a review of recent reforms designed to improve efficiency

The “statement on the efficient conduct of financial remedy hearings proceeding in the financial remedies court below high court judge level”, Efficiency Statement, published in January 2022 has introduced significant procedural changes to financial remedy proceedings.

The changes were implemented with immediate effect from 11 January 2022. Considering the forthcoming changes to divorce procedure, the introduction of the online portal, the updated D81 statement of information, which is also considered below, and guidance in respect of orders and witness evidence, this is a period of significant change for both family law professionals and separated couples.

Intention of the Efficiency Statement

The purpose of the statement is to “enhance efficiency in the disposal of financial remedy cases, to ensure that such cases are allotted an appropriate share of the court’s resources and to improve access to justice…”.

What impact will this have on parties?

Cooperation between parties

• The introduction of the Efficiency Statement will promote coworking between the parties as they are required to obtain a lot of the evidence required to resolve a case jointly.
• The parties are also required to work together to complete certain court documents. The court has made it clear that separate versions of such documents will no longer be tolerated.

Working proactively to minimise dispute

• The Efficiency Statement requires parties to act a lot more proactively once proceedings are issued. As an example, property particulars and mortgage capacity evidence should now be exchanged prior to the first appointment, whereas historically that evidence would only be obtained at FDR (Financial Dispute Resolution) stage.
• This should encourage settlement as the parties will have more of the relevant information at the earliest opportunity, before incurring costs preparing for the FDR.
• The outstanding issues in relation to a case will be clarified much earlier within the financial remedy proceedings and the parties can then work to minimise dispute.

Costs consequences

• As parties will need to obtain the relevant information much earlier in proceedings, it is possible that there will be increased costs involved in preparation for the first appointment.
• However, as the relevant information will be obtained early on and negotiation is actively encouraged, this should reduce the costs incurred later in financial remedy proceedings.
• The Efficiency Statement also introduces potential costs consequences for failure to comply with the requirements.
• Parties and family lawyers should ensure that the requirements of the Efficiency Statement are complied with.

Changes implemented

The Efficiency Statement implemented a number of changes to the financial remedy process. A flowchart detailing the procedure for financial remedy proceedings can be found here.

This note is no substitute for reading the entire Efficiency Statement and following the changes recorded therein.

The most substantial changes and the new documents introduced are considered below:

Allocation

When issuing financial remedy proceedings, the applicant must (unless wholly impractical) complete a questionnaire to enable the court to assess whether the case is to be allocated to the High Court.  

The considerations include the value and complexity of the case.

Continuity of judge

To allow for judicial continuity, the allocated judge will either conduct:

• all hearings up to and including the final hearing, excluding the FDR; or
• will conduct all hearings up to and including FDR with any subsequent hearings to be heard by another judge.

First Appointment

Parties can agree to directions ahead of the First Appointment.

The Efficiency Statement has introduced a number of steps that must be taken prior to the First Appointment, which include the preparation of new court documents:

14 days prior to the First Appointment the following steps should be taken:

• The applicant shall file a jointly obtained valuation of the family home (alternatively each party provides their own separate market appraisal and will need to explain why a joint valuation could not be obtained);
• Each party should use their best endeavours to

(i)  set out their positions in relation to the housing needs of themselves and the other party.

(ii) provide brief evidence of their respective borrowing capacities;

(iii)  Provide a questionnaire pursuant to FPR 9.14(5)(c) that should not exceed four pages unless permission is granted for a longer questionnaire.

The day before the First Appointment, the applicant must file with the court the following documents: -

• A composite case summary (Template ES1): to provide the judge with an overview of the case, including a brief chronology, details of any open offers, legal costs (incurred and projected) and likely issues;
• A composite schedule of assets and income (Template ES2): to record the assets, liabilities and income values in a simple and neutral format to highlight any differences in valuations whilst limiting disagreements as to how the figures should be presented.

Financial Dispute Resolution Appointment (FDR)

FDRs will usually be listed in the morning, but the parties and their advisers must be available for the whole day.

The parties must collaborate to produce a number of documents that must be filed at court no later than 7 days before the FDR:

• An updated composite case summary (Template ES1)
• An updated composite schedule of assets (Template ES2)
• A composite chronology in neutral terms with any unagreed events clearly denoted

It is not acceptable for competing schedules and chronologies to be filed at court.

For cases where a final hearing is to be listed, a final hearing template should also be prepared.

Private FDR

If the parties propose a private FDR, provision is made in the Efficiency Statement.

Interim applications

Interim applications should be made to the allocated judge, if appointed, unless to do so would be impracticable or would cause undue delay.

Pre-Trial Review (PTR)

Every case listed for a final hearing of three or more days will be the subject of a PTR approximately 4 weeks before the final hearing.

Preparation for final hearing

Final hearing template: a final hearing template (timetable) must be prepared and filed at the PTR;

Expert evidence: The admission of expert evidence will be in accordance with the President’s Memorandum: Experts in the Family Court (4 October 2021). If evidence from more than one expert has been permitted, and discussion between those experts has not occurred, the parties must agree that this takes place no later than 28 days before the final hearing.

7 days before the hearing: parties must collaborate to produce a number of documents that the applicant must file no later than 7 days before the hearing:

• An updated composite case summary using Template ES1
• A composite schedule of assets and income using template ES2 (unless wholly impractical) with any unagreed items denoted.
• A composite chronology recording, in neutral terms, the key dates of the relationship and the litigation, with unagreed items denoted.

The statement makes it clear that it will be unacceptable for the court to be presented with competing asset schedules and chronologies.

Section 25 and other witness statements: Witness statements must comply with the principles derived from the President’s Memorandum: Witness Statements (10 November 2021).

Bundles: The court bundle must strictly comply with PD27A and must be prepared in accordance with the General Guidance on PDF bundles dated 19 November 2021 and modified 12 December 2021.

Position statements: Position statements should be filed by 11am the working day before the hearing and should be exchanged with the other party no later than one hour after they were filed.

The Efficiency Statement provides further guidance in respect of position statements including prescribed page limits, depending upon the type of hearing, and the layout of the document.

Duty to negotiate

Parties must inform the court that they have complied with the duty to negotiate openly and reasonably. Position statements must contain brief details of what efforts the parties have made to negotiate openly, reasonably and responsibly. Failure to comply with the duty may be met by costs penalties.

Costs: both incurred and projected

The bundle for each hearing must contain the parties’ costs estimates in Form H.

Final hearing

If advocates, without reasonable excuse, fail to comply with the requirements set out in the Efficiency Statement, costs penalties may arise.

Orders

The drafting of orders must fully comply with the principles and standards derived from the President’s Memorandum: Drafting Orders (10 November 2021).