In an improved fiber-film type contactor/separator an enhanced coalescing zone is provided by the presence of a disengagement device connected to a shroud that contains a bundle of high surface area vertical hanging fibers, where the enhanced coalescing zone diverts a portion of an admixture of immiscible liquids to flow radially in a path not parallel to the vertical axis of the hanging fibers whereby the diverted portion of liquids contacts a coalescing surface to cause at least one of the liquids to coalesce into droplets. The immiscible liquids are allowed to settle into separate phase layers and first and second outlets selectively remove the higher density liquid from the lower density liquid.