PRACTICE DIRECTION 9A – APPLICATION FOR A FINANCIAL REMEDY
PRACTICE DIRECTION 9A – APPLICATION FOR A FINANCIAL REMEDY This Practice Direction supplements FPR Part 9
|Pre-application protocol||Para. 2.1|
|Procedure before the first appointment||Para. 4.1|
|Financial Statements and other documents||Para. 5.1|
|Financial Dispute Resolution (FDR) Appointment||Para. 6.1|
|Consent orders||Para. 7.1|
|Section 10(2) of the Matrimonial Causes Act 1973 and section 48(2)of the Civil Partnership Act 2004||Para. 8.1|
|Maintenance Orders – registration in the family courts||Para. 9.1|
|PPF Compensation||Para. 11.1|
|Orders for payment in respect of legal services||Para. 12.1|
|Applications to set aside a financial remedy||Para. 13.1|
Part 9 of the Family Procedure Rules sets out the procedure applicable to the financial proceedings that are included in the definition of a ‘financial remedy’.
The fast-track procedure set out in Chapter 5 of Part 9 of the Family Procedure Rules applies to—
(a) any application where the financial remedy sought is only for an order for periodical payments (as defined in rule 9.9B(1));
(b) any application made under—
(i) the Domestic Proceedings and Magistrates’ Courts Act 1978;
(ii) Schedule 6 to the Civil Partnership Act 2004;
(iv) Article 10 of the 2007 Hague Convention;
(c) any application for the variation of an order for periodical payments, except where the applicant seeks the dismissal (immediate or otherwise) of the periodical payments order and its substitution with one or more of a lump sum order, a property adjustment order, a pension sharing order or a pension compensation sharing order.”
The standard procedure set out in Chapter 4 of Part 9 applies in respect of all other applications for a financial remedy. In a case to which the fast-track procedure applies any party may seek a direction from the court that the standard procedure should apply to the application. An applicant who seeks such a direction must include a request in the application for a financial remedy and give reasons; any such request by a respondent, or any representations about a request by the applicant, must be made, giving reasons, within 7 days after service of the application for a financial remedy. At any stage in the proceedings the court may order that an application proceeding under the fast-track procedure must proceed under the standard procedure.”
Where an application for a financial remedy includes an application relating to land, details of any mortgagee must be included in the application.
The ‘pre-application protocol’ annexed to this Direction outlines the steps parties should take to seek and provide information from and to each other prior to the commencement of any application for a financial remedy. The court will expect the parties to comply with the terms of the protocol.
Rule 9.27(1) requires each party to file with the court, and serve on each other party, not less than one day before a hearing or appointment, an estimate of the costs incurred by that party up to the date of that hearing or appointment. Rule 9.27(2) and (3) make provision for the filing and service of estimates of specified future costs not less than one day before a first appointment and a FDR appointment. The rule also makes provision for the filing and service of particulars of costs not less than 14 days before a final hearing of an application for a financial remedy. The rule makes provision to ensure that all parties are aware of all incurred and estimated future costs (including their own) and for the court to give directions as to compliance if these requirements are not satisfied.
References in rule 9.27 (and any other rule) to a time period of a day or a number of days must be read by reference to rule 2.9 (computation of time).”.
The purpose of this rule is to enable the court and the parties to take account of the impact of each party’s costs liability on their financial situations. Parties should ensure that the information contained in the estimate is as full and accurate as possible and that any sums already paid in respect of a party’s financial remedy costs are clearly set out. Where relevant, any liability arising from the costs of other proceedings between the parties should continue to be referred to in the appropriate section of a party’s financial statement; any such costs should not be included in the estimates under rule 9.27.
An estimate of costs which is to be filed and served in accordance with rule 9.27(1), (2) or (3), and particulars of costs which are to be filed and served in accordance with rule 9.27(4) must be verified by a statement of truth.
Where an estimate of costs or particulars of costs are to be filed by a party who is not legally represented, the statement of truth should be as follows-
“I confirm that:
(a) to the best of my knowledge and belief, the contents of [this estimate of costs/ these particulars of costs] are true and accurate; and
(b) [this estimate of costs/ these particulars of costs] will be filed with the court and served on each other party, in accordance with rule 9.27 of the Family Procedure Rules 2010.”
Where an estimate of costs or particulars of costs are to be filed by a party’s legal representative, the statement of truth should be as follows-
“I confirm that:
(a) to the best of my knowledge and belief, the contents of this [estimate of costs/ these particulars of costs] are true and accurate;
(b) I have discussed the contents of [this estimate of costs/ these particulars of costs] with my client (the [applicant/ respondent] in these proceedings);
(c) [this estimate of costs/ these particulars of costs] will be filed with the court and served on each other party, in accordance with rule 9.27 of the Family Procedure Rules 2010.
Rule 28.3 provides that the general rule in financial remedy proceedings is that the court will not make an order requiring one party to pay the costs of another party. However the court may make such an order at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings.
Any breach of this practice direction or the pre-application protocol annexed to it will be taken into account by the court when deciding whether to depart from the general rule as to costs.
Procedure before the first appointment
In addition to the matters listed at rule 9.14(5), the parties should, if possible, with a view to identifying and narrowing any issues between the parties, exchange and file with the court –
(a) a summary of the case agreed between the parties;
(b) a schedule of assets agreed between the parties; and
(c) details of any directions that they seek, including, where appropriate, the name of any expert they wish to be appointed.
Where a party is prevented from sending the details referred to in (c) above, the party should make that information available at the first appointment.
Financial Statements and other documents
Practice Direction 22A (Written Evidence) applies to any financial statement filed in accordance with rules 9.14 or 9.19 and to any exhibits to a financial statement. In preparing a bundle of documents to be exhibited to or attached to a financial statement, regard must be had in particular to paragraphs 11.1 to 11.3 and 13.1 to 13.4 of that Direction. Whereon account of their bulk, it is impracticable for the exhibits to a financial statement to be retained on the court file after the First Appointment, the court may give directions as to their custody pending further hearings.
Where the court directs a party to provide information or documents by way of reply to a questionnaire or request by another party, the reply must be verified by a statement of truth. Unless otherwise directed, a reply to a questionnaire or request for information and documents shall not be filed with the court.
(Part 17 and Practice Direction 17Amake further provision about statements of truth)
Financial Dispute Resolution (FDR) Appointment
A key element in the procedure is the Financial Dispute Resolution (FDR) appointment. Rule 9.17 provides that the FDR appointment is to be treated as a meeting held for the purposes of discussion and negotiation.Such meetings have been developed as a means of reducing the tension which inevitably arises in family disputes and facilitating settlement of those disputes.
In order for the FDR to be effective, parties must approach the occasion openly and without reserve. Non-disclosure of the content of such meetings is vital and is an essential prerequisite for fruitful discussion directed to the settlement of the dispute between the parties. The FDR appointment is an important part of the settlement process. As a consequence of Re D (Minors) (Conciliation: Disclosure of Information)  Fam 231,evidence of anything said or of any admission made in the course of an FDR appointment will not be admissible in evidence, except at the trial of a person for an offence committed at the appointment or in the very exceptional circumstances indicated in Re D.
Courts will therefore expect –
(a) parties to make offers and proposals;
(b) recipients of offers and proposals to give them proper consideration; and
(c) (subject to paragraph 6.4), that parties, whether separately or together, will not seek to exclude from consideration at the appointment any such offer or proposal.
Paragraph 6.3(c) does not apply to an offer or proposal made during non-court dispute resolution.
In order to make the most effective use of the first appointment and the FDR appointment, the legal representatives attending those appointments will be expected to have full knowledge of the case.
Where at a FDR appointment a settlement is not reached, the parties have an obligation to make open proposals for settlement in accordance with rule 9.27A. The normal direction would be that each party must file and serve their open proposals within 21 days of the FDR appointment. The court must consider whether it is appropriate to give any further directions about the filing and service of open proposals.
Rule 9.26 (1)(a) requires an application for a consent order to be accompanied by two copies of the draft order in the terms sought, one of which must be endorsed with a statement signed by the respondent to the application signifying the respondent’s agreement. The rule is considered to have been properly complied with if the endorsed statement is signed by solicitors on record as acting for the respondent; but where the consent order applied for contains undertakings, it should be signed by the party giving the undertakings as well as by that party’s solicitor.
(Provision relating to the enforcement of undertakings is contained in the Practice Direction 33A supplementing Part 33 of the FPR)
Rule 9.26(1)(b) requires each party to file with the court and serve on the other party a statement of information. Where this is contained in one form, both parties must sign the statement to certify that each has read the contents of the other's statement.
Rule 35.2 deals with applications for a consent order in respect of a financial remedy where the parties wish to have the content of a written mediation agreement to which the Mediation Directive applies made the subject of a consent order.
Section 10(2) of the Matrimonial Causes Act 1973 and section 48(2)of the Civil Partnership Act 2004
Where a respondent who has applied under section 10(2) of the Matrimonial Causes Act 1973, or section 48(2) of the Civil Partnership Act 2004, for the court to consider his or her financial position after a divorce or dissolution elects not to proceed with the application, a notice of withdrawal of the application signed by the respondent or by the respondent's solicitor may be filed without leave of the court. In this event a formal order dismissing or striking out the application is unnecessary. Notice of withdrawal should also be given to the applicant’s solicitor.
An application under section 10(2) or section 48(2) which has been withdrawn is not a bar to making in matrimonial proceedings, the decree absolute and in civil partnership proceedings, the final order.
Maintenance Orders – registration in the family court
Where periodical payments are required to be made to a child under an order registered in the family court, section 31L(3) and (4) of the1984 Act permits the payments to be made instead to the person with whom the child has his home. That person may proceed in his own name for variation, revival or revocation of the order and may enforce payment in his own name.
The registration in the family court of an order made direct to a child entails a considerable amount of work. Accordingly, when the High Court is considering the form of an order where there are children, care should be taken not to make orders for payment direct where such orders would be of no benefit to the parties.
The phrase ‘party with pension rights’ is used in FPR Part 9, Chapter 8. For matrimonial proceedings, this phrase has the meaning given to it by section 25D(3) of the Matrimonial Causes Act 1973 and means‘the party to the marriage who has or is likely to have benefits under a pension arrangement’. There is a definition of ‘civil partner with pension rights’ in paragraph 29 of Schedule 5 to the Civil Partnership Act 2004 which mirrors the definition of ‘party with pension rights’ in section 25D(3) of the 1973 Act. The phrase ‘is likely to have benefits’ in these definitions refers to accrued rights to pension benefits which are not yet in payment.
The phrase ‘party with compensation rights’ is used in FPR Part 9, Chapter 9.For matrimonial proceedings, the phrase has the meaning given to it by section 25G(5) of the Matrimonial Causes Act 1973 and means the party to the marriage who is or is likely to be entitled to PPF compensation. There is a definition of ‘civil partner with compensation rights’ in paragraph 37(1) of Schedule 5 to the Civil Partnership Act 2004 which mirrors the definition of ‘party with compensation rights’ in section 25G(5). The phrase ‘is likely to be entitled to PPF Compensation’ in those definitions refers to statutory entitlement to PPF Compensation which is not yet in payment.
An application for an order for payment in respect of legal services under section 22ZA of the 1973 Act or paragraph 38A of Part 8 of Schedule 5 to the 2004 Act must be made in accordance with FPR 9.7 using the Part 18 procedure. Where the application is made at the same time as an application for an order for maintenance pending suit or maintenance pending outcome, the applications may be included in one application notice, and evidence in support of or in response to the applications may be contained in one witness statement.
(Where an application is made for an order under FPR 9.7, a copy of the application notice must be served in accordance with the provisions of FPR Part 6 at least 14 days before the court is to deal with the application: FPR 18.8(1)(b).)
The evidence filed in support of an application for an order for payment in respect of legal services must, in addition to the matters referred to in rule 9.7(3), include a concise statement of the applicant's case on –
(a) the criteria set out in section 22ZA(3) and (4) of the 1974 Act or paragraph 38A(3) and (4) of Part 8 of Schedule 5 to the 2004 Act as applicable; and
(b) the matters set out in section 22ZB(1) of the 1973 Act or paragraph 38B(1) of Part 8 of Schedule 5 to the 2004 Act as applicable.
As set out in rule 9.9A(4), the Part 18 procedure applies to applications to set aside a financial remedy. Where such an application was made before rule 9.9A came into force, the Part 18 procedure will still apply subject to any directions that the court might make for the purpose of ensuring the proceedings are dealt with fairly (see the Family Procedure (Amendment No. 2) Rules 2016, rule 5).
If the financial remedy order was made before 22 April 2014, by any court, an application to set it aside under rule 9.9A is to be made to the family court. This is the combined effect of rule 9.9A(3), which provides that the application is made within the original proceedings, and the Crime and Courts Act 2013 (Family Court: Transitional and Savings Provision) Order 2014, which provides that any such proceedings became family court proceedings as of 22 April 2014.
If the financial remedy order was made on or after 22 April 2014, an application to set it aside under rule 9.9A is to be made to the court that made the order.
An application under rule 9.9A is to be dealt with by the same level of judge that dealt with the original application, by virtue of rule 17 of the Family Court (Composition and Distribution of Business) Rules 2014. Where reasonably possible, the application will be dealt with by the same judge that dealt with the original application.
An application to set aside a financial remedy order should only be made where no error of the court is alleged. If an error of the court is alleged, an application for permission to appeal under Part 30 should be considered. The grounds on which a financial remedy order may be set aside are and will remain a matter for decisions by judges. The grounds include (i) fraud; (ii) material non-disclosure; (iii) certain limited types of mistake; (iv) a subsequent event, unforeseen and unforeseeable at the time the order was made, which invalidates the basis on which the order was made.
The effect of rules 9.9A(1)(a) and (2) is that an application may be made to set aside all or only part of a financial remedy order, including a financial remedy order that has been made by consent.
The family court has the power under section 31F(6) of the Matrimonial and Family Proceedings Act 1984 to vary or set aside a financial remedy order. The High Court has the power under rule 9.9A and section 17(2) of the Senior Courts Act 1981 to set aside a financial remedy order. The difference in the wording of the legislative provisions is the reason that “set aside” has been defined as it has in rule 9.9A(1)(b).
In applications under rule 9.9A, the starting point is that the order which one party is seeking to have set aside was properly made. A mere allegation that it was obtained by, eg, non-disclosure, is not sufficient for the court to set aside the order. Only once the ground for setting aside the order has been established (or admitted) can the court set aside the order and rehear the original application for a financial remedy. The court has a full range of case management powers and considerable discretion as to how to determine an application to set aside a financial remedy order, including where appropriate the power to strike out or summarily dispose of an application to set aside. If and when a ground for setting aside has been established, the court may decide to set aside the whole or part of the order there and then, or may delay doing so, especially if there are third party claims to the parties’ assets. Ordinarily, once the court has decided to set aside a financial remedy order, the court would give directions for a full rehearing to re-determine the original application. However, if the court is satisfied that it has sufficient information to do so, it may proceed to re-determine the original application at the same time as setting aside the financial remedy order.
The effect of rule 28.3(9) is that the Part 28 rules relating to costs do not apply to applications under rule 9.9A.”.
Annex Pre-application protocol
Notes of guidance
Scope of the Protocol
This protocol is intended to apply to all applications for a financial remedy as defined by rule 2.3. It is designed to cover all classes of case, ranging from a simple application for periodical payments to an application for a substantial lump sum and property adjustment order. The protocol is designed to facilitate the operation of the procedure for financial remedy applications.
In considering the options of pre-application disclosure and negotiation, solicitors should bear in mind the advantage of having a court timetable and court managed process. There is sometimes an advantage in preparing disclosure before proceedings are commenced. However, solicitors should bear in mind the objective of controlling costs and in particular the costs of discovery and that the option of pre-application disclosure and negotiation has risks of excessive and uncontrolled expenditure and delay. This option should only be encouraged where both parties agree to follow this route and disclosure is not likely to be an issue or has been adequately dealt with in mediation or otherwise.
Solicitors should consider at an early stage and keep under review whether it would be appropriate to suggest mediation and/or collaborative law to the clients as an alternative to solicitor negotiation or court based litigation.
Making an application to the court should not be regarded as a hostile step or a last resort, rather as a way of starting the court timetable, controlling disclosure and endeavouring to avoid the costly final hearing and the preparation for it.
The circumstances of parties to an application for a financial remedy are so various that it would be difficult to prepare a specimen first letter. The request for information will be different in every case. However, the tone of the initial letter is important and the guidelines in paragraphs 14 and 15 should be followed. It should be approved in advance by the client. Solicitors writing to an unrepresented party should always recommend that he seeks independent legal advice and enclose a second copy of the letter to be passed to any solicitor instructed. A reasonable time limit for an answer may be 14 days.
Negotiation and Settlement
In the event of pre-application disclosure and negotiation, as envisaged in paragraph 12 an application should not be issued when a settlement is a reasonable prospect.
The protocol underlines the obligation of parties to make full and frank disclosure of all material facts, documents and other information relevant to the issues. Solicitors owe their clients a duty to tell them in clear terms of this duty and of the possible consequences of breach of the duty, which may include criminal sanctions under the Fraud Act 2006. This duty of disclosure is an ongoing obligation and includes the duty to disclose any material changes after initial disclosure has been given. Solicitors are referred to the Good Practice Guides available to Resolution members at www.resolution.org.uk and can also contact the Law Society’s Practice Advice Service on 0870 606 2522.
All parties must always bear in mind the overriding objective set out at rules 1.1 to 1.4 and try to ensure that applications should be resolved and a just outcome achieved as speedily as possible without costs being unreasonably incurred. The needs of any children should be addressed and safeguarded. The procedures which it is appropriate to follow should be conducted with minimum distress to the parties and in a manner designed to promote as good a continuing relationship between the parties and any children affected as is possible in the circumstances.
The principle of proportionality must be borne in mind at all times. It is unacceptable for the costs of any case to be disproportionate to the financial value of the subject matter of the dispute.
Parties should be informed that where a court is considering whether to make an order requiring one party to pay the costs of another party, it will take into account pre-application offers to settle and conduct of disclosure.
Identifying the issues
Parties must seek to clarify their claims and identify the issues between them as soon as possible. So that this can be achieved, they must provide full, frank and clear disclosure of facts, information and documents, which are material and sufficiently accurate to enable proper negotiations to take place to settle their differences. Openness in all dealings is essential.
If parties carry out voluntary disclosure before the issue of proceedings the parties should exchange schedules of assets, income, liabilities and other material facts, using the financial statement as a guide to the format of the disclosure. Documents should only be disclosed to the extent that they are required by the financial statement. Excessive or disproportionate costs should not be incurred.
Any first letter and subsequent correspondence must focus on the clarification of claims and identification of issues and their resolution. Protracted and unnecessary correspondence and ‘trial by correspondence’ must be avoided.
The impact of any correspondence upon the reader and in particular the parties must always be considered. Any correspondence which raises irrelevant issues or which might cause the other party to adopt an entrenched, polarised or hostile position is to be discouraged.