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03 August 2020

Family arbitration – Resolving family disputes in uncertain times

The world is very uncertain at the moment, and for many people life has been on hold over the past weeks and months. However, some things have not changed, and relationships unfortunately do continue to break down. As a result, difficult family disputes still need to be resolved.

If you cannot reach an agreement about your dispute, then you will need someone to decide it for you. The traditional way to do this is to apply to court. At the end of the court process, a Judge will make a decision which will be binding upon you and your ex-partner.

However, court proceedings are slow, expensive, and stressful at the best of times. The court system is overstretched, and despite the best efforts of court administrators and judges, this frequently leads to delay, frustration and additional cost. The difficulties have been compounded by the COVID-19 crisis, which has led to many court hearings being cancelled at short notice.

A potential solution is family arbitration. We have been handling family arbitrations since they were first introduced in 2012. However, with the COVID-19 crisis family arbitration has become an even more attractive option than it was before, and we have been able to utilise family arbitration to resolve family disputes, even during the height of the COVID-19 lockdown. This article will give you an insight into family arbitration, and help you to understand whether it may be right for you.

What is family arbitration?

Family arbitration is a way of resolving disputes between separating couples, whether or not they are married. Family arbitration can help with disagreements relating to money and property, and arrangements for children.

The purpose of arbitration is to reach a final decision about the dispute, which will be binding upon the parties involved. In this way arbitration differs from mediation. In mediation, the purpose is to reach an agreement through a process of negotiation. In arbitration the aim is not to reach a negotiated agreement, but rather to have someone else make a final decision for you. This is crucial in those cases where negotiation does not succeed, and both parties need a fixed outcome so they can move on with their lives.

How does it work?

The process of arbitration is extremely flexible, but it will usually involve the following stages:

  1. You and your ex-partner sign an arbitration agreement. By signing the agreement, you agree to be bound by the arbitration process, and by any decisions that are made by the arbitrator.
  2. The arbitrator is selected. The arbitrator will usually be a specialist barrister or solicitor, who has significant experience of family law. You and your ex-partner will usually each pay half of the arbitrator’s fees.
  3. You and your ex-partner provide information to the arbitrator about the issues that need to be decided. The arbitrator will consider whether any further information is required before those issues can be decided, and may direct you to obtain that further information.
  4. Once the arbitrator has all the information s/he requires, s/he will make a final decision about your dispute, and set out her reasons in writing. This may happen at the end of a hearing, where you and your ex-partner may answer questions and be represented by solicitors or barristers. Alternatively, it could happen without the need for a hearing at all.
  5. Once the arbitrator has made her decision, it is likely that you and your ex-partner will then apply to court to transform the arbitrator’s decision into a court order. This is particularly essential in financial cases, but may not be necessary in cases relating to children. In either case, where the arbitration has been carried out properly, the court is likely to approve the arbitrator’s decision as a straightforward administrative process, and without the need for a court hearing.

Why do it?

The outcome of arbitration is a binding decision which will settle the issues in dispute between the parties. However, a Judge sitting in a public court can also make such a binding decision. So why choose arbitration instead?

It could be much quicker

To get a decision from the family court, it is likely that you will need to attend at least three court hearings. In a financial case, the entire process from start to finish is likely to take 12 to 18 months, but could be significantly longer if the case is complex. In cases relating to children timescales would ideally be shorter, but it is nevertheless common for cases to last 12 months or longer. Complications caused by COVID-19 mean that many cases are being delayed at present, and hearings are being postponed for long periods. The court process is therefore becoming slower in many cases.

Arbitration can be substantially quicker, particularly where the issues are relatively straightforward and clearly defined. In such situations it can be possible to move from the appointment of the arbitrator to a final decision within the space of four to six weeks.

Even where arbitrations are more complex, and take longer to resolve, it is likely that the process will still be quicker than court proceedings. The courts are very busy and often short-staffed. It is unfortunately not uncommon for court hearings to be delayed at the last minute where the court is too busy, or judges are unavailable. These last minute cancellations are not only intensely frustrating and costly, but they can introduce months of delay.

In an arbitration you avoid the uncertainty and delay inherent in the court process. Your appointed arbitrator will remain engaged with your case throughout the process from start to finish. You will know who your arbitrator is from the start, and will not suffer the risk of preparing for a hearing only to find that you do not have a judge to hear it.

It is more flexible

In court proceedings, the court will tend to follow one, standard process. At the end, the judge will consider all of the issues that could be relevant to the case, and make a decision about each of them.

However, you and your ex-partner might agree on 80% of the issues already, and only want a decision on the last 20%. Or it might be that you want a decision to be made ‘on paper’, without having a formal hearing at all. It might be that you want the process to be as informal as possible, avoiding court rooms and formal dress, to prevent additional stress and to help to keep your relationship with your ex-partner amicable. The flexibility of arbitration means that all of these options are possible in principle.

It can be cheaper

Many people are put off the idea of arbitration because they worry that it will be too expensive. After all, arbitration requires that you and your ex-partner pay the arbitrator’s fee as well as your own legal fees. Isn’t arbitration a lot more expensive?

Not necessarily. In fact, it can be considerably cheaper. For the reasons already given, the arbitration process can be quicker than a court process, and the legal fees you pay to your solicitor could be less as a result. By making the arbitration bespoke, you can ask the arbitrator to focus only on the particular issues, and avoid incurring unnecessary costs as a result. Those savings can significantly exceed the additional cost of paying the arbitrator’s fees.

Although family arbitration has been available since 2012, it is still relatively new in the world of family law. As a result, many arbitrators will handle cases at very reasonable rates as they seek to attract new business. Arbitration often represents very good value for money as a result.

Some case studies

Below are some examples of how arbitration can help to resolve family disputes.

  • A husband and wife had agreed how to divide their capital assets, and only needed a decision about the amount of income support that the husband would provide to the wife. They had a one-day hearing in person at the offices of a law firm, and the arbitrator decided the issue shortly afterwards.
  • A husband and wife owned four properties, and could not agree which two of the properties they would each keep. An arbitrator was appointed to decide the issue ‘on paper’, without a hearing. The arbitration process took less than six weeks from start to finish.
  • Many financial issues were in dispute between a husband and wife. Due to the COVID-19 lockdown, the final arbitration hearing was dealt with via video link in a single day, with the parties, their barristers, solicitors and the arbitrator all joining a single video call. If this case had been dealt with through the courts it would likely have been delayed as a result of the lockdown.
  • Two parents could not agree on where their daughter should go to school. To have the issue decided by a court could have taken up to 12 months and would have delayed school applications. An arbitrator could decide the issue in only a few months, in plenty of time to make the applications.

At BDB Pitmans we can advise and represent you in connection with family arbitration. Please contact our family and matrimonial team if you would like to discuss your situation with one of our solicitors.

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