Arbitration: changing the family law landscape

Five years after arbitration was introduced to reduce the stress and expense of divorce, a leading specialist solicitor who was closely involved in creating the scheme reflects on its success.

Suzanne Kingston, Partner, Withers LLP

In April 2012, the Institute of Family Law Arbitrators (IFLA) launched the first family law financial scheme, offering married couples or cohabitees a bespoke alternative to court proceedings. This was an important step in reducing the cost, stress and length of going to court, which could exact a heavy toll on couples.

Before this, there was no recourse to arbitration; mediation was possible, but participants could choose whether or not to accept the final terms. In contrast, in agreeing to arbitration, both parties are bound to accept the arbitrator’s decision, which is then endorsed by the court and becomes legally-binding. Obtaining a court order is far more straightforward and much faster.

Five years later, I am delighted by the scheme’s success. We were confident at the outset that it would prove to be a significant and effective addition to family law, but it has surpassed our expectations. In September 2016, reassured that arbitration was working as intended, we launched the Children Scheme, making it possible to use arbitration for most disputes relating to children. As a consequence, most family law issues can now be resolved this way.

The IFLA scheme has attracted worldwide praise and become the gold standard in family law arbitration. Significantly, it has received judicial support and encouragement from the highest level. In 2014 the President of the Family Division, Sir James Munby, in the case of S v S, endorsed family arbitration calling it a "single magnetic factor of determinative importance" and paved the way for it to take centre stage. He then helpfully provided practice guidance to practitioners in November 2015, again praising the IFLA Scheme.

What sort of disputes can be resolved via arbitration?

The IFLA scheme is broad in scope and the majority of financial claims for cohabiting couples and spouses are included within its remit. Similarly, most issues for a child's upbringing (including present or future living arrangements, contact, education, and decisions about internal relocation within England and Wales) are within the scope of the Children Scheme.

There are numerous benefits to arbitration:

1. Confidentiality: crucially, unlike in court proceedings, confidentiality is assured in arbitration. There has been an increased emphasis on openness and transparency in family proceedings, and more and more cases are heard in public without reporting restrictions — which is why more family cases are being reported in the press. Although the arbitral award needs to be converted into a court order, the President has given specific directions to ensure that confidentiality is maintained and there is no possibility of media reporting in these cases. High-profile families may prefer to look to arbitration to preserve their privacy.

2. Flexibility: arbitration provides a more flexible and client-focused approach. Once appointed, the legal representatives are able to engage in direct communication with the arbitrator — most arbitrators liaise by email, rather than having formal court hearings — and minor issues can be decided through conference calls or Skype. Arbitration is generally a less formal process than Court and is held in surroundings which are more conducive to resolving family disputes.

3. Speed: arbitration allows the parties to deal with the case at the pace that is best for them, rather than the rigidly imposed timetable. If the legal representatives and parties agree that the arbitration should take place within three months, then that is possible. In the court system, waiting lists can mean that it is impossible to obtain a final hearing for a year.

4. Single issues: it is possible in arbitration to deal with the whole dispute or just one issue. Sometimes a couple can agree the majority of their case, but there may be a sticking point relating to one issue. It is cumbersome to have to issue court proceedings and go through the whole process to have a judgment in relation to that one issue. In arbitration, it is possible to deal with that discrete point and have a quick adjudication — this is a real sweet spot for arbitration.

5. Complexity: the court process is governed by rules, which provide for a wide variety of cases and by their very nature must be inflexible. Unsurprisingly there are times when they may not be the right fit for a particular case. For example, the court takes a stringent approach to the production of documents for hearings; bundles shall usually consist of one ring binder limited to 350 pages. Although permission can be sought to introduce additional bundles, it is by no means guaranteed. Parties with complicated financial circumstances may prefer the more tailor-made procedures in the arbitration scheme.

6. Continuity: when a couple attend court, they do not know who the Judge is going to be until 4:30pm the day before. However, if they use arbitration, it is possible to choose their decision maker and maintain continuity throughout the case. IFLA-accredited arbitrators are experienced family lawyers (retired Judges, QCs, senior barristers and solicitors, who have been on a rigorous training course and undertaken an exam).

7. Cost-effective: there are advantages both in terms of cost effectiveness and speed of outcome in arbitration. Although the parties would be paying for the arbitrator's time, the fixed fees charged for such work are relatively modest and are insignificant in comparison to the costs involved in lengthy litigation.

Limitations

The arbitration process is essentially bilateral and, unlike court proceedings, it can’t resolve issues involving third parties, such as trustees, unless they agree to participate. Potential participants should also realise that while the process is flexible, it is still formal and designed to reach an outcome. It is not ‘touchy feely’ or a form of therapy; any such scheme would be doomed to failure.

Further information

There are a number of very good resources to find out more about family law arbitration and I would recommend two websites in particular:

ifla.org.uk
familyarbitrator.com

I would urge potential clients to discuss the possibility of arbitration with their solicitor, and arrange a free conference call with an arbitrator to ascertain more about how the arbitrator would work and potential fees involved. Once everyone is happy with the process, the forms can be signed and a binding arbitration undertaken.

Looking forward, it seems to me that arbitration will become the ‘go to’ method of resolution for family law disputes. The IFLA Scheme is well thought out and fully supported by the judiciary. Unlike other forms of non-court resolution, the case ends in an adjudication providing certainty and finality for the couple.

Suzanne Kingston is a partner at Withers LLP in its Family Department and widely known for her expertise in all aspects of family law, in particular the resolution of complex financial issues for high net worth individuals. Suzanne is an accredited mediator, accredited arbitrator and has spearheaded the arbitration training for family lawyers in England and Wales.

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