Article by Matthew Smith : The New Family Procedure Rules: Costs sanctions for failing to engage in NCDR

In the recent High Court decision of X v Y [2024] EWHC 538 (Fam), Mrs Justice Knowles gave a strong forewarning over the forthcoming changes to the FPR and how the same are likely to be interpreted in financial remedies hearings and in cases concerning children.

The case itself involved a pre-hearing review in a big money financial remedies case on the back of a failed FDR and a failure to participate in non-court dispute resolution (NCDR); for which the latter Mrs Justice Knowles found to be utterly unfathomable.

The changes to the FPR come into force on 29^th April 2024 and NCDR is enshrined within them.  The new FPR 3.4(1A) allows the court to encourage NCDR and make directions of its own initiative.  It reads:

Where the timetabling of proceedings allows sufficient time for these steps to be taken, the court should encourage parties, as it considers appropriate, to –

• obtain information and advice about, and consider using, non-court dispute resolution; and
• undertake non-court dispute resolution.

(2)        The court may give directions about the matters specified in paragraph (1A) on an application or of its own initiative.

The accompanying PD 3A will also be amended to make it clear that the court may adjourn a case to encourage the use of NCDR.

This is all backed up by costs sanctions, pursuant to a revised FPR 28.3(7), which will now have the following additional trigger, namely:

In deciding what order (if any) to make under paragraph (6), the court must have regard to …

(aa) any failure by a party, without good reason, to –

• attend a MIAM (as defined in rule 3.1); or
• attend non-court dispute resolution; …

In the case of X v Y (supra.), Mrs Justice Knowles was keen to point out that whilst the Court of Appeal in Churchill v Merthyr Tydfill [2023] EWCA Civ 1416 held that the court, under the Civil Procedure Rules, has power to compel parties in civil proceedings to engage in NCDR and/or to stay proceedings to allow for this; to assume this had no relevance to family proceedings is unwise.

Whilst the new FPR cannot compel NCDR, nevertheless agreement from the parties will no longer be required and the court may, in actively managing a case, timetable the case to allow for NCDR and, of course, the new rules themselves will have some bite given the new FPR 28.3(7) on costs, as set out above.

Some other changes in The Family Procedure (Amendment No. 2) Rules 2023 include:

• In rule 3.8(1), ‘violence’ is substituted for ‘abuse’; ‘unreasonable’ is substituted for ‘significant financial’; ‘MIAM exemption’ is substituted for ‘non-court dispute resolution attendance’.

• In rule 3.9, sub-para (b) is substituted for ‘consider and explain the potential benefits of mediation and other methods of non-court dispute resolution as a means of resolving the dispute’.

• In rule 3.10, para (1) is substituted for ‘If a MIAM exemption has been claimed, the court will enquire into whether the exemption – (a) was not validly claimed; or (b) was validly claimed but is no longer applicable…’

Whilst these changes may be welcomed and appropriate, it should be borne in mind that the requirement for MIAM before issuing a financial remedies application has now been in force for 10 years; the case of Calderbank is almost 50 years old and the 3 stage application process itself has an inbuilt form of mediation; namely the FDR.  However, it would seem that the new rules may well be enforced quite strictly and the costs sanctions could well provide the stick to engage in further NCDR.