What is Arbitration?
Arbitration is an alternative way of resolving disputes and whilst familiar in the commercial and construction industry, it has not been used much by family lawyers despite it having been available for family law disputes since March 2012.
With the new rules on NCDR in Family cases being launched in April 2024, it is hoped that Arbitration will now be used more often as an alternative to traditional court proceedings. Clients can now agree to arbitrate their dispute and can choose a Family Arbitrator who is a member of the Family Arbitration Panel / Institute of Family Law Arbitrators (IFLA).
Can it be used for both Financial cases and Children cases?
Yes, it can be used for both financial cases (both for divorcing couples and cohabiting couples) and private law children cases.
With financial cases, it does not extend to :-
- the liberty of individuals
- status, i.e. the arbitrator will not determine issues in relation to the relationship itself
- bankruptcy or insolvency
- welfare benefits
- jurisdiction or stay cases
- issues as to the recognition of a foreign marriage or divorce
- decisions from Sharia councils and other similar bodies
- third parties, i.e. arbitration comes about because of the agreement between the parties and so third-party issues (such as a family's third-party interest in the family home) are, by definition, not covered by that agreement
With children cases, it does not extend to :-
- an application to have a child returned to this jurisdiction from another country
- a dispute which involves the jurisdiction of a Court outside of England and Wales
- a dispute concerning the authorisation or management of life-changing or life-threatening medical treatment
- a dispute where a person under 18 years of age has parental responsibility for the child, and
- a case where a party to the proposed Arbitration lacks capacity under the Mental Capacity Act 2005
What are the benefits?
- A speedier option than waiting for a case to be determined by the Family Court
- More flexibility – it is possible to choose your Arbitrator, venue and date. Clients have the option to set their own bespoke timetable, or follow the standard procedure under the IFLA scheme rules (which mimics the traditional timetable used by the Court)
- You can choose what specific issues you would like the Arbitrator to determine, include discrete issues (perhaps in the middle of court proceedings – e.g which expert to utilise if agreement cannot be reached)
- Arbitration can be informal – an Arbitration Hearing does not need to take place – a decision can be made on paper.
- It is confidential.
- A binding decision (known as an "Award") is made by the Arbitrator – this would need to be drawn up into an agreed Order and approved by the Court (appeals are allowed in only very specific circumstances)
What are the costs?
Costs of appointing an arbitrator can range from £2,500 plus VAT – £5,000 plus VAT for an Arbitration Hearing depending on the Arbitrator's seniority. The costs would be far less if the Arbitrator was asked to adjudicate on a discrete issue, and / or a paper-based adjudication. These costs would normally be shared between both parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.