The Express Financial Remedy Pilot
A consistent concern regarding financial remedy proceedings is that the process is inordinately long and expensive. This is a pinch that is felt far more considerably in cases with low value assets.
This issue was considered by the Farquhar Committee in September 2021. It was proposed that the current procedure for resolving financial remedy cases is amended to ensure cases involving assets up to £250,000 are resolved in two hearings rather than the standard three.[1]
On 7th April 2025, Practice Direction 36ZH- Pilot Scheme: Express Financial Remedy Procedure came into force.[2] The pilot encompasses the recommendations made by the Farquhar Committee in its September 2021 report. The purpose of the Pilot Scheme is made clear within the Practice Direction. In short, certain proceedings for a financial remedy where the total combined net assets are not expected to exceed £250,000 will follow a new express financial remedy procedure with a view to further enhancing efficiency in the disposal of financial remedy cases.[3]
Eligibility:
Paragraph 1.3 of PD 36ZH sets out those cases which will fall within the remit of the Pilot Scheme. It will apply to applications filed in the period commencing 7th April 2025 until 3rd April 2026.[4] The Practice Direction provides a complete list of the locations where the pilot scheme will be rolled out in, which includes Liverpool, Chester and Manchester.[5]
As outlined, the Scheme applies to those cases whereby the total combined net assets of the applicant and respondent are, or are considered by the applicant in the application, likely to be, less than £250,000[6]. The ‘total combined net assets’ is defined as the combined value of the assets of the applicant and respondent (excluding pension rights or Pension Protection Fund compensation entitlement) after the deduction of liabilities and mortgages.[7]
Procedure/ Timetable:
PD 36ZH sets out a revised timetable which truncates the current standard procedure
applicable to financial remedy proceedings. When an application falling within the remit of the Pilot is issued, the Court will set the following timetable:
Any party seeking to utilise the standard procedure must make an application (stating the reasons for such a direction) by no later than 7 days from the date of exchanging financial statements.[9] The Court must consider all the circumstances including a) the complexity of the assets/ income structure b) other potentially complex issues or c) other circumstances including whether it is viable to use the first hearing as an FDR or whether the final hearing is likely to last more than 1 day.[10]
PD36ZH requires parties to provide a significant amount of information ‘up front’, which they would previously be directed to provide at an FDA. This includes replies to questionnaire, the potential instruction of an SJE to provide valuations in default of any agreement and offers to settle. The requirements are set out in full at 9.21D.[11]
The Court must use the first hearing as an FDR unless there are good reasons not to do so.[12] If the parties are unable to achieve a settlement, the Court will give further directions which, if appropriate, may include filing further evidence, reducing the time estimate for a final hearing or removing the case from the express financial remedy procedure.[13] Parties must simultaneously exchange open offers to settle within 7 days of the FDR. [14]
Conclusion:
The Pilot introduces a significant change to the current standard procedure for financial remedy proceedings. It is hoped that the scheme will ease the tension on the Court’s resources, provide a manageable timescale for parties involved in proceedings and generate costs that are more proportionate to the assets involved.
[1] ‘The Financial Remedies Court- The Way Forward. A Paper to Consider changes to the Practices and Procedures in the Financial Remedies Court’ September 2021
[2] Practice Direction 36ZH- Pilot Scheme: Express Financial Remedy Procedure
[3] PD 36ZH, para 2.1
[4] PD 36ZH, para 1.3(e)
[5] PD 36ZH, para 1.5
[6] PD 36ZH, para 1.3(c)
[7] PD 36ZH, para 1.6
[8] PD 36ZH, para 4.4 which inserts “Chapter 5B Express Financial Remedy Procedure” 9.21B ‘Procedure’ para 2(a) into the FPR 2010
[9] PD 36ZH, para 4.4 which inserts “Chapter 5B Express Financial Remedy Procedure” 9.21 C ‘Request for change of procedure’ para 2(a-b) into the FPR 2010
[10] PD 36ZH, para 4.4 which inserts “Chapter 5B Express Financial Remedy Procedure” 9.21 C ‘Request for change of procedure’ para 4 into the FPR 2010
[11] PD 36ZH, para 4.4 which inserts “Chapter 5B Express Financial Remedy Procedure” 9.21 D ‘Procedure before the First Hearing’ into the FPR 2010
[12] PD 36ZH, para 4.4 which inserts “Chapter 5B Express Financial Remedy Procedure” 9.21 E ‘Consideration of the application at the first hearing’ para 1 into the FPR 2010
[13] PD 36ZH, para 4.4 which inserts “Chapter 5B Express Financial Remedy Procedure” 9.21 E ‘Consideration of the application at the first hearing’ para 2 into the FPR 2010
[14] PD 36ZH, para 4.4 which inserts “Chapter 5B Express Financial Remedy Procedure” 9.21 F ‘After the first hearing’ into the FPR 2010