The growing use of arbitration in family law
When it comes to dealing with the financial matters arising from the breakdown of a relationship, there are a number of options available to parties. The majority of people are aware that they can make an application the Court and, increasingly, people are becoming aware of mediation and the advantages that process may have in assisting separating couples to settle their financial differences.
Far fewer people, however, are aware of arbitration and the role it may play in resolving financial matters resulting from a relationship breakdown.
What is arbitration?
Arbitration is, in essence, a private adjudication of a dispute, where the parties jointly agree to appoint their own private judge. The judge would be a member of the Institute of Family Law Arbitrators (IFLA) whose members include several senior family law barristers, QC’s and retired judges, including retired High Court and Court of Appeal judges. One can therefore select a judge based upon the complexity and value of the issues involved.
What are the advantages of arbitration?
There are a number of potential advantages to engaging in arbitration when compared with making a Court application:
The process is flexible and is within the parties’ control. It may be the case that parties have managed to agree the vast majority of the dispute between them, but are opposed on certain matters. Unlike a Court application, where the whole matter would have to be considered, it is possible within arbitration to refer only finite and distinct points of dispute to the arbitrator.
Inevitably when a Court application is made there will be delay by virtue of the volume of work which the Family Courts have to deal with. The Family Courts are under increased pressure and it is not uncommon for a hearing not to go ahead as the Courts do not have time, or a judge is not available. With arbitration, hearings can be arranged at the parties’ convenience. Accordingly, disputes may be adjudicated far earlier than when left to the vagaries of the Court timetable. Furthermore, where it is considered appropriate, it is possible for matters to be dealt with on paper, rather than requiring attendance at hearings, which will again reduce delay and, indeed, costs.
With respect to costs, the parties will have to arrange for the arbitrator’s fees to be met. However, this may prove to be significantly cheaper than proceeding with a Court application on the basis that delay will be reduced and the parties will have much greater control over matters such as expert evidence.
When compared to other forms of dispute resolution, arbitration has one distinct advantage - certainty of an outcome. With mediation, for example, there is no way to compel the other party to agree to any proposed settlement and, as such, money may be spent on mediation which results in a Court application having to be made in any event. With arbitration, the process is premised on the parties being given a binding decision.
Once a decision has been made by an arbitrator, it will be drafted into a Consent Order for submission to the Court for approval. This will give the parties an enforceable Order of the Court should future disputes arise and it will also provide protection from future financial claims by their ex-spouse.
In order to enter into arbitration, both parties must consent to the process and both must sign an agreement stating that they will be bound by the final decision of the arbitrator. Parties can appoint their own arbitrator or can approach IFLA who will appoint a suitable arbitrator on their behalf. As with Court proceedings, both parties may be legally represented or may represent themselves if they choose to do so.
When can arbitration be used?
Arbitration can be used to resolve disputes concerning finances, property, child maintenance and matters relating to the welfare of children, such as where they will live and whom they will spend time with.
Arbitration within family proceedings has already gained the support of a number of senior family law professionals, including Sir James Munby, the President of the Family Law Division of the High Court, with several eminent retired judges now also acting as arbitrators. Whilst the process may not be suitable in every case, arbitration is certainly on the rise and should be considered an ever more important tool to separating couples.