Family Arbitration Explained

In advance of the Final Hearing of Michelle and Scot Young in November 2013 it was reported in the Financial Times that this could be one of the last very large divorce battles to be fought in open Court.  Instead, arbitration may be much more widely used in the future.  So what exactly is family arbitration and is it relevant to you?

What is family arbitration?

Family arbitration is where you both enter into an agreement that your case will be heard by an arbitrator and that you will both agree to be bound by his or her decision.

Therefore, is it binding?

Yes and no.  It’s intended that the decision should be binding and that’s what you would both sign up to.  However, at the moment only the Court can make a final financial award.  Therefore, it’s not possible to say that the decision will be final and binding. However, in reality, it’s considered unlikely that a Court would overrule an arbitrator’s decision. This is particularly likely given the guidance from the President of the Family division in the short judgment of S v S.

What is an Arbitrator?

An arbitrator is a senior lawyer (sometimes a retired judge) whom you pay to act as a private judge.  They must have completed a specialist course (provided by the Institute of Family Law Arbitrators) in order to be able to act as a family arbitrator.

How do you find a family arbitrator?

It’s possible to find a family arbitrator on the Institute of Family Law Arbitrators website.

What sort of cases are appropriate for family arbitration?

Arbitration can be used in order to decide upon an appropriate financial settlement following the breakdown of a marriage or civil partnership.  It can’t be used to decide issues relating to child contact and residence.

Has family arbitration been around for long?

Arbitration has been available in a commercial context for many years.  However, family law arbitration has only been available since 22 February 2012.

What are the benefits?

Confidentiality. 

Since 2009 it has been possible for representatives of the media to be present at Family Court hearings.  Therefore, if you’re in the public eye and are concerned that the media may be interested in your case, arbitration could be appropriate for you.

Speed. 

The Courts are increasingly clogged up and it can take months to obtain a Hearing date.  Even once your case is listed for a Hearing there’s no guarantee that you won’t spend most of the day waiting to see the Judge or that your case won’t be re-listed at the last minute.  By contrast, you will be able to arrange the timetable in advance with your arbitrator.

Flexibility. 

The form that the arbitration takes (i.e. whether everything is done on paper or whether there is a hearing in the normal way) is up to you.  In addition the two of you can decide the issues that are arbitrated.  You might wish arbitration to deal with everything or only specific  issues.

Choice of the arbitrator. 

Being able to choose the arbitrator could be an advantage or a disadvantage.  In theory it will be useful for you both to be happy with the person arbitrating your case.  However, there is a risk that you could spend a lot of time arguing over the appropriate person to use as an arbitrator.

What are the downsides?

Costs. 

Arguably using an arbitrator could save you money if your case is complex, involves significant assets and would be likely to involve a Final Hearing in any event.  However, the cost of an arbitrator is not cheap (although this depends upon their seniority and experience).  In addition you are also likely to have the cost of barristers.  Therefore, this shouldn’t be seen as a cheap option.

If you want to use an arbitrator do you need to use lawyers?

No.  It is strongly recommended by the Institute of Family Law Arbitrators that you both take legal advice before signing up to arbitration.  This is to ensure that you both understand how the process will work.  After that, it is up to you whether you wish to / are able to instruct a lawyer to represent you.

What’s the uptake of family arbitration and is it worth considering?

Anecdotally there has not been a large uptake of family arbitration to date, although it is being hailed in some quarters as ‘the next big thing’.  In reality, it’s likely to be limited to a fairly small pool of litigants who wish their affairs to remain private or who can afford to pay for the convenience of a quick decision.

Whether or not you decide that arbitration is appropriate for your circumstances, like other more traditional forms of dispute resolution (such as mediation) it is worth learning about if only to make an informed decision.