Front-loading: the new FRC Efficiency Statement in a nutshell

On 11^th January 2022, the financial remedies gods (or rather, Mostyn J and HHJ Hess) blessed us all with a shiny new “Efficiency Statement”, effective immediately. The Efficiency Statement (“ES” hereafter) originates from recommendations made by the Farquhar Committee in September 2021, which looked to improve remote working practice going forward (their report was literally titled “The Way Forward”). What the ES gives practitioners is new guidance on streamlining the papers and process of financial remedy proceedings. Read the whole thing (along with its accompany documents) here: Notice from the Financial Remedies Court | Courts and Tribunals Judiciary.

This article is a brief summary focusing on the biggest changes to pre-hearing preparations. Of most importance are the new template documents (ES1 and ES2) referenced by the ES requirements and the Primary Principles document, which replaces the former Good Practice Protocol. The Allocation Principles and questionnaire are attached to the Primary Principles document.

What do these new documents mean?

The presence of them alone summarises the main theme of the changes brought about by the ES: front-loading.

There are now new and significant requirements for filing documents in advance of the FDA and FDR hearings. Let’s break them down.

Before the FDA

Pre-FDA, the following steps need to be taken:

1. 14 days before the FDA, the applicant shall file a jointly obtained marketing appraisal of any property currently being used as a family home. If a joint one is impossible, parties should file separate ones and explain the impossibility to the court.
2. Each party shall use best endeavours to file and serve on the court and other party no more than 3 sets of property particulars showing the likely housing need for each party. “Likely” does not mean final – but the court and other party may question changes.
3. Each party shall use best endeavours to file with the court jointly obtained information regarding their borrowing capacities. Again, if joint information is impossible, use best endeavours to produce individual documents and be prepared to explain the impossibility to the court.

9. Each party must file their questionnaire pursuant to FPR 9.14(5)(c) (“parties questionnaire”), which should not exceed 4 pages.

If the FDA becomes an FDR by agreement, the above points become mandatory – all are a must.

If proceeding normally, the day before the FDA sees the bigger changes come in. The applicant must now file with the court:

1. A composite case summary using the ES1 template document;
2. A composite schedule of assets and income using parties’ Form E figures and using the ES2 template (unless wholly impracticable) and noting areas of disagreement.

No new composite chronology is required at this stage, but a standard chronology pursuant to FPR9.14 (5) (as will the other documents listed) will still be required. The ES does not amend the FPR rules per se. They continue to apply in their natural form.

Another key point to note at this stage is that Forms H and H1 still need filing regarding costs. The costs information headlined in the new ES1 is not a replacement of these forms – it is more there to protect against judges not having received them.

Before the FDR

Front-loading preparation applies to the FDR now too. Not less than 7 days before the hearing, parties must now file:

1. An updated composite case summary using Form ES1,
2. An updated composite asset schedule using Form ES2 noting any disagreements,
3. A composite chronology.

Everything in the composite documents does not need to be agreed – the point is to streamline the documents before the court and not to present competing separate documents. This means that collaboration between parties is essential, and might call for many more advocates’ meetings than usual.

On the day of the FDR, the ES tells us that parties and advisers must be available for the whole day, although it will usually be a morning listing. Double hearings on an FDR day are (supposed to be) no more. Time-wise FDR hearings will be listed for 1 – 1.5 hours unless the court directed a different period at the FDA.

New Form D81

One more important paper update is the new form D81 (statement of information for a consent order in relation to a financial remedy). The new form must be used immediately (pursuant to FPR r. 5.1(1) and PD 5A para 1.1 and tables 1 and 2). Old forms will still be accepted provided they have been signed no later than 18^th February 2022. Find the new form here: D81 Statement of information for a consent order in relation to a financial remedy (publishing.service.gov.uk)

What’s the standard of compliance?

The ES does not amend the FPR, which continues to apply to FRC proceedings. Using our “best endeavours” is not a “must” for advocates in complying with the new ES points. However, the ES emphasises the need for parties to be prepared to explain to the court why it has been “impossible” to file the joint documents the ES asks for (for example, the joint market appraisal or the joint mortgage borrowing capacity document). The same approach is found on the ES position on page limits for documents. If you’ve gone over a limit, you’ll need to be prepared to explain why.

What if we don’t do what the ES says?

The ES applies to all parties, including litigants in person. The warning at paragraph 29 details the consequences of non-compliance with certain elements:

‘If advocates without reasonable excuse fail to comply at the final hearing with paras 21 (provision of agreed schedules of assets and chronology), or 24 (length and content of position statements) or 26 (time for filing position statements) they will risk an order being made disallowing a proportion of their fees pursuant to CPR 44.11(1)(b) and/or section 51(6) Senior Courts Act 1981. In this regard attention is drawn to the comparable warnings in CPR PD 52C para 31(5) and in para 18 of the Efficiency Statement for cases proceeding at High Court Judge level dated 1 February 2016.’

In summary, the following key action points can be drawn from the ES:

1. Collaborate with the other party as much as possible to produce the composite documents;
2. Use your best endeavours to do so;
3. Prepare an explanation for any over-long documents or the absence of jointly-required documents;
4. Hopefully receive your fees and emerge unscathed.