Changes introduced to the family courts this week that encourage separating couples to pursue out-of-court resolutions will reinforce practices favoured by high-net-worth and high-profile clients, according to leading advisers in the field.
Amendments to the Family Procedure Rules, which came into effect on Monday, widen the definition of non-court dispute resolution (NCDR). Previously, this focused on mediation but it will now include arbitration, collaborative law and evaluation by a neutral third party.
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‘All good family lawyers will already have been exploring these options with their clients, but the changes are bringing NCDR front and centre in a way it has never been before,’ explains Claire Gordon, partner at Farrer & Co.
The change in rules also encourages couples to try and resolve disputes, rather than starting a court process, says Debbie Chism, partner at Stewarts. Couples will no longer be able to simply ‘tick a box’ to say NCDR is not appropriate for their case. ‘The new regime requires separating couples to explain to the court what steps they have taken to resolve their dispute before making a formal application,’ adds Chism.
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Courts will also have the power to adjourn proceedings if the judge feels that NCDR would be appropriate, allowing time for the couple to engage. This can now happen whether the couple agrees to it or not. However, the rules crucially stop short of compelling parties to attend NCDR.
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These changes reflect a growing shift towards out-of-court resolutions, which offer greater flexibility, control and privacy, while avoiding the often stressful experience of attending court. Another major factor is the ability to avoid trudging through the overburdened judicial system, something which the change to Family Procedure Rules is designed to alleviate.
‘A complicated case which might now take between eighteen months to two years to resolve within the court system can be expedited in arbitration and concluded in less than half that time,’ explains Emma Hatley, partner at Stewarts. ‘Why put yourself at the mercy of a court list when you could arbitrate instead, anywhere and at any time, subject to your chosen arbitrator’s availability? It’s an obvious choice in most cases.’
Why HNWs favour NCDR
The changes will be beneficial to many separating couples, according to advisers in the Spear’s network, but NCDR holds particular value for HNWs.
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Davina Katz, founder of Katz Partners, explains: ‘There will be very few, if any, experienced divorce lawyers who do not see the benefits of non-court dispute resolution when advising their UHNW clients.
‘The ability to effectively provide time poor, extremely wealthy and very privacy conscious individuals with the possibility of sanitising the adjudication process on divorce and relationship breakdown, has obvious appeal: proceedings can be timetabled to their convenience; those proceedings will be private with no risk of details being ventilated or published; and the identity of the judge is a matter that they have a hand in deciding.’
NDCR has become even more appealing for HNWs following the new transparency rules that came into force in the Central Family Court, and elsewhere, in January 2024, giving reporters and legal bloggers access to private court hearings, says Camilla Baldwin, founder of Camilla Baldwin Solicitors. ‘NCDR options will inevitably become more attractive to our higher profile U/HNW clients to avoid the risk of their names being publicly reported.’
Hatley agrees: ‘With the added risk of press and media intrusion, it is no surprise that we have already seen many couples, particularly from high-net-worth families and those in the public eye, favouring NDCR instead. With the advent of these new rules, we fully expect that trend to continue.’
