Arbitration – Alternatives to Court Proceedings

When a relationship unfortunately breaks down, there quite often are disagreements relating to the property or finances. Family Law Practitioners will seek for clients to settle their disputes by way of solicitor negotiation or mediation. But what happens if this fails? What happens if you are unable to agree to the split of the equity in the property, or whether there should be spousal maintenance or a pension sharing order? What happens if you cannot agree on who retains the family car?

Historically, the only option after failed negotiations was to issue court proceedings. Court proceedings generally have three hearings, consisting of a first directions appointment, a financial dispute resolution hearing and then a final hearing. The cost to each party involved should a case go through all three hearings will be exceptionally high and often outweigh the financial award at the end. One of the risks with court proceedings would be if your matter has a very specific issue of contention, for example, foreign properties and you have a Judge hearing your case who has far more experience in business disputes for example. The final order made by the Judge is legally binding. It would be open to you, under specific circumstances, to appeal but this would be at further expense.

At the beginning of 2012 The Institute of Family Law Arbitration (IFLA) launched the Family Law Arbitration Scheme. Under this scheme issues relating to property and finances on the breakdown of a marriage can be dealt far more informally and at less of an expense to the parties involved and yet still result in a final order being made.

Whilst there are areas of Family Law to which arbitration is unsuitable, such as parenting and care of children, the status of a parties relationship, and proceedings relating to insolvency, the areas for which arbitration can assist are vast and include:

– Disputes concerning chattels (belongings)

– Addressing the mechanics of a settlement to include existing assets, debts and division of capital

– Resolve complex disputes swiftly involving foreign assets.

– Resolving urgent interim issues in a dispute under the Trusts of Land and Appointment of Trustees Act 1996 and Schedule 1 of the Children Act 1989

– Variation of maintenance.

– Assisting where there has been a failed financial dispute resolution hearing

Generally speaking the arbitration process is much quicker and cheaper than court proceedings. Furthermore, the process is far more informal and would usually take place in a barristers chambers. Both parties would be present together with their legal representatives.

The powers of an arbitrator are wide. They can appoint experts or assess and direct those involved to engage with expert evidence. The parties are still under a duty to do everything necessary for the proper and expeditious conduct of the arbitration proceedings. There are still methods of enforcement that can be taken should one party not cooperate after agreeing to the process.

Upon collecting all the relevant information and hearing the case, the arbitrator will make his decision and inform the parties within a reasonable time, usually about 28 days. The arbitrator will give full reasoning for his decision. This award can then be submitted to the court to be made into a final order. The court will seek to hold the parties to the arbitration award on the basis that both parties have been advised and agreed to arbitrate. The court will merely check that the process was followed correctly and that the award is workable.

The awards can be challenged under an appeal process, however, these are rare and an appeal can only be made under certain circumstances.

Aside from the procedure being far more informal and quicker, there are two main advantages:The cost which will usually be significantly less than court proceedings and the cost of the arbitrator is usually split between the parties.You chose your arbitrator yourself from a panel of qualified family arbitrators and thus you can appoint someone with experience specific to the issues in dispute.

Arbitration will not be suitable in every case however, it should be something you consider.

Should you wish to discuss this further and find out whether your matter would be suitable for arbitration please do not hesitate to contact one of the Family Team here at Eric Robinson Solicitors.