First anniversary of changes to FPR Parts 3 and 28

29 April 2025

Marking the first anniversary of the important changes to FPR Parts 3 and 28 which gave courts greater powers in relation to stay proceedings for non-court dispute resolution and to make adverse costs orders against those who don’t engage, Nicholas Allen KC and David Walden-Smith, both IFLA-accredited arbitrators, reflect on how parties can make even better use of arbitration and PFDRs in financial cases.

IFLA Finance Arbitration

Recent changes to the FPR 2010, the CPR 1998, and the pre-application protocols have transformed the court’s approach to non-court dispute resolution (‘NCDR’). If parties do not consider (and if appropriate engage in) NCDR at all stages, the court proceedings may be stayed and costs orders made. 

As a chambers 29 Bedford Row is committed to all forms of NCDR – including mediation, collaborative law, and those closest to the court process: private FDRs and IFLA arbitration. 

The convenience and reliability of the private process needs no advertising – nor do the benefits of confidentiality and speed.

There are, however, significant advantages to the parties in adopting the IFLA arbitration scheme at the earliest moment (rather than, for example, just as an alternative to a final hearing if the wait for such a hearing is simply too long or the case gets stood out from the list at the last minute). 

If so, once appointed, the arbitrator will conduct a directions hearing that is equivalent to a First Appointment. The hearing is most effective if basic disclosure, by way of Forms E, has been exchanged in advance. 

That hearing can be held remotely or in person, as the parties may wish. There is also scope, of course, for the parties to agree all necessary directions and to submit them to the appointed arbitrator for approval.

The arbitrator can make all the case management and other interim decisions that otherwise would be made by a Judge of the Financial Remedies Court. Those determinations are fully binding upon the parties.

IFLA arbitration can thus mirror the court process – which worked so effectively when properly funded - whilst providing the parties with choice over their tribunal, a significant reduction in delay, and confidence that their hearing will not be vacated at the last moment.

The arbitrator can - and will - resolve any dispute as to:

• the nature and extent of the disclosure required;
• whether particular questions must be answered by the other party;
• whether expert evidence is necessary and, if it is, who should be appointed as the expert and who should meet the fees;
• any dispute as to the terms of a letter of instruction;
• any disagreement as to whether the matter should be timetabled straight to a final arbitral hearing or to a private FDR first.

Such disagreements as may arise can be resolved by way of email exchange with the arbitrator rather than by way of a formal application requiring a hearing.

The arbitrator can also deal – speedily - with any MPS or LSPO type application that might be made. 

If the case is listed for a pFDR, the vast majority of disputes will, as now, be resolved at that stage. Nevertheless, the arbitrator may already have fixed a date for a final hearing.  A listing perhaps four or six weeks after the pFDR would avoid the unnecessary deeming of fees whilst being sufficiently proximate to avoid the need for another round of financial disclosure if the pFDR were not successful. The parties may thereby be confident that matters will be resolved within a reasonable and predictable timeframe – with the consequence of a significant costs saving. 

Arbitration has the further advantage of privacy. The Transparency Pilot (which now encompasses all financial remedy applications in all courts) does not apply to financial arbitration. 

Submitting the ARB1FS

The arbitral process commences with both parties (or their respective solicitors) signing the form ARB1FS. This may identify an agreed arbitrator or an agreed shortlist of arbitrators from which list IFLA will select one at random. IFLA can also choose an arbitrator at random from all those qualified if the parties so wish.

If there are third party issues, they may also be subject to arbitral determination, provided that the third party agrees to be bound by the outcome by also signing the ARB1FS.

The Private FDR

The directions made by the arbitrator will have brought the case to a state of readiness before the pFDR. That hearing will be conducted by another practitioner – as chosen by the parties. 

The success rate at pFDRs is, of course, very high.

The Arbitration

If a final hearing is required the arbitrator will pre-read the papers. He or she will also provide an award in writing within a reasonable period of time: sometimes within a few days and within a few weeks at most. Therefore, no provision need be made for judicial reading time, or for the consideration and delivery of a judgment. A full day can therefore usually be removed from the time-estimate that would otherwise apply if the matter were to be heard in court.

Appeals

If one or both parties are dissatisfied with the arbitrator’s award, the appeal process is very similar to after a final hearing at court. The award will not be made into a court order if the arbitrator reached a decision that was “wrong”. In effect the processes for challenging an award or a  court judgment are identical.

Further Information

If you would like to discuss financial arbitration further, whether in general terms or with reference to any specific case, please contact the clerks.

Our arbitrators are also happy to speak to both sides of a case, if parties are considering the arbitral process but would like to know a little more.  Provided both parties are present, our arbitrators can go into a little more detail as to how the process would work in their specific case. For a brief meeting over Zoom or Teams, no charge would be made. 

Again, if such a meeting would be of interest, please feel free to contact James Shortall, Julie Holcombe, or Ben Cross either by email or on 020 7404 1044.

April 2025

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