Sally Powell explains what family arbitration is and how it could benefit separating couples. Sally can talk you through how to take your own case through an arbitration process, how to use the services of an arbitrator to evaluate your case or guide parties through a private Financial Dispute Resolution hearing.
The arbitration process and the services of an arbitrator are of even greater importance during the Coronavirus crisis when the Court service resource is severely diminished and the practicalities of accessing determinations through remote hearings is extremely challenging and expensive. An arbitrator will be able to be more accessible, flexible and economic than the court service.
Tees Senior Partner, David Redfern LLB MCIArb is a family lawyer with over 40 years’ experience and a qualified family financial arbitrator registered under the IFLA scheme. If you want to discuss the appointment of David as an arbitrator or to guide you through an early neutral evaluation of your case, or conduct a private Financial Dispute Resolution, please contact David directly, here.
What is arbitration and how does it work?
Arbitration is a private, confidential process available to couples who are separating, whether they are married or unmarried, in the event there is a disagreement regarding the distribution of their assets or the future arrangements for their child. It avoids the need for a formal court application to be made to resolve disputes regarding finances or child arrangements, but a legally binding decision is still made at the conclusion of the process.
Arbitration can only take place if both of you agree to appoint an arbitrator and be bound by the decision.
What is an arbitrator?
An arbitrator is a legally trained professional with a minimum of 10 years’ post-qualification experience in family law. They must be able and qualified to make a ruling in respect of a formal dispute in relation to financial or child arrangements, in a very similar way that a judge would at a court hearing. Prior to qualification, arbitrators are required to undergo rigorous training and pass an in-depth assessment process. Arbitrators are required to act fairly and impartially, giving you both the opportunity to put forward your respective views.
What would family arbitration involve?
You would both need to agree on the issues to be determined and jointly select an arbitrator who you would like to appoint to resolve your dispute. If you can’t agree on an arbitrator, the Institute of Family Law Arbitrators (the organisation which oversees the arbitration scheme) can select one on your behalf.
Once the terms of appointment of the arbitrator have been agreed between you, your ex-partner and the arbitrator, you will receive a formal letter of acceptance. Within this is your agreement to be bound by the reasoned, written decision of the arbitrator. This is the start of the formal arbitration process.
How the arbitration process will evolve will depend on the nature of the disputes you are trying to resolve and your own preferences. It’s usual for there to be a case management conference at the start, usually conducted by telephone or in person, to decide how the process will be conducted. For example, you will discuss whether it is done only through the submission of documents, via telephone or by face-to-face meetings. There is a wide discretion given to arbitrators to adopt procedures which suit your individual case, but the arbitrator will not make any procedural decisions without consulting with you both.
Once the arbitrator has received all documentation and heard any evidence, they will make a decision. In financial cases, the decision is called an award. In children cases, it is called a determination. The award or determination must be delivered promptly in writing and will include reasons as to why the decision was reached.
Is an arbitration award legally binding?
There is normally a requirement for an arbitration award or determination to be converted into a court order. Once this has been done, it is enforceable in the same way as any other court order.
The court has made it very clear that arbitration awards and determinations will be approved and upheld by the court.
Do I have the right to appeal in arbitration?
No you can’t appeal just because you don’t agree with the decision, although there are limited rights to appeal to the court on a point of law under the arbitration legislation.
You can also invite the court to set aside the decision if you believe there has been a serious irregularity which has resulted in (or may result in) substantial injustice.
What are the benefits of arbitration?
- You can choose an arbitrator best suited to the particular circumstances of your case. Your choice of arbitrator can take account of where you’re based, the extent and complexity of the issues and the professional background of the arbitrator (e.g. solicitor, barrister or retired judge). In court proceedings, there is no guarantee that the judge will have specialist knowledge or experience in the area of law in which your dispute falls.
- The arbitrator you select will be solely and completely focused on your arbitration. This is in contrast to a judge, who often has to hear 6 or 7 cases in the morning and another 6 or 7 cases in the afternoon. With that number of hearings, a judge cannot commit as much time to familiarising themselves with the intricate details of every case. An arbitrator, on the other hand, will specifically set aside time to familiarise themselves with your case in detail. Their entire focus will be on you and your ex-partner and what would be the most appropriate outcome for you both.
- The same arbitrator will handle your arbitration from start to finish. At court, you would usually appear before a different judge at each hearing.
- Arbitration is a much faster process than contested court proceedings. You can fix a date as soon as you want and arrange it around your own diaries, selecting a date and time for your meetings that suits everyone. The court is often not able to accommodate a hearing for months at a time and, to reach the final hearing in relation to either finances or child arrangements at which a judge will make a decision, it will usually take 12-18 months. Arbitration can resolve the dispute in a matter of weeks, providing all necessary information and evidence has been gathered. This, in turn, can save a considerable amount of money in legal costs for you both.
- Any issues you and your ex-partner agree in advance of arbitration can be included in the arbitration award or determination. This ensures the outcomes in relation to all disputes are binding.
- The proceedings are completely confidential. You don’t have to worry about details of your financial circumstances becoming public knowledge and the media are not permitted to attend any meetings.
- It’s not compulsory to attend a mediation information and assessment meeting (MIAM) to assess whether mediation would be suitable before starting the arbitration process.
Is arbitration the same as mediation?
A mediator can work with you both to try and help you reach an agreement, but cannot make a decision on your behalf, as an arbitrator can.
Mediation can take place alongside an on-going arbitration in order to try and narrow the issues to be determined by the arbitrator.
Mediators often recommend arbitration in the event a dispute, or an aspect of the dispute, cannot be settled by mediation.
How much will arbitration cost?
Arbitrators do charge a fee, which is usually agreed and fixed in advance, but due to the speed and flexibility of the process the overall cost is likely to be a lot less than involving the court. It is usual for you both to share the arbitrator’s fees equally. The fee varies depending on the experience and location of the arbitrator. These fees must be paid before the arbitrator releases their award or determination.
Arbitration meetings are often held at solicitors’ offices or barristers’ chambers, which is usually free, but there may be costs incurred if a venue for meetings is hired. Again, it is usual for you both to share these fees equally.
Legal costs will be incurred if you both engage lawyers to prepare your case and represent you. It is usual for you both to bear your own legal costs and not to contribute anything towards the other person’s legal costs.
The fees of any expert in relation to preparing a report or giving evidence are usually shared by you both equally.
You can refer yourselves to arbitration or a lawyer can make the referral for you, but it is worth bearing in mind that most arbitrators will only accept instructions from a lawyer on your behalf.
If you think arbitration would assist you in resolving a dispute relating to finances or child arrangements, you should take legal advice from a specialist who can consider your specific circumstances in detail.