This question is often asked by clients, especially divorcing couples when trying to resolve financial issues after negotiations have stalled or Mediation has collapsed.
There is another way. The parties can agree to enter into Arbitration where they would be represented by their legal team just as they would in Court proceedings. In addition to financial claims on divorce Arbitration can also be used in:
1. disputes between unmarried couples over property which they jointly own under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA disputes);
2. financial claims on behalf of children under schedule 1 of the Children Act 1989;
3. Inheritance Act claims under the Inheritance (Provision for Family and Dependents) Act 1975; and
4. financial claims (where a court would have jurisdiction) in respect of a divorce granted abroad.
There is also a Children Arbitration Scheme which has been set up by IFLA. Under this scheme parents can arbitrate over:
1. residence/custody disputes);
2. contact disputes;
3. education disputes (e.g. which schools the children should attend); or
4. disputes concerning routine and non-life threatening medical treatment.
There are some matters that cannot be arbitrated in respect of children such as removing a child from the jurisdiction; disputes over lifechanging or life threatening medical treatment; or where there are issues about lack of capacity under the Mental Capacity Act 2005. This is not an exhaustive list.
The Children Arbitration Scheme does require safeguarding issues to be addressed and both parties have to complete a safeguarding questionnaire. There are also rules requiring the parties to obtain basic disclosure dealing primarily with criminal convictions and involvement with Children’s Services.
What is the Arbitration process?
The process of Arbitration is similar to the Court procedure but with a number of advantages:
1. An Arbitrator, unlike a judge, is chosen by the parties from a panel maintained by the Institute of Family Law Arbitrators (IFLA). The Arbitrator will be a lawyer.
2. The parties, with the guidance of and subject to the final say of the Arbitrator, can decide the procedure they wish to follow. For example, in relation to financial disclosure, the parties may agree that this can be limited to certain information/documents if that is all that is required to decide the issues in dispute.
3. The procedure can be tailored to the particular dispute between the parties.
4. The timetable at which the Arbitration takes place can be decided by the parties, again with the guidance and subject to the final say of the Arbitrator.
5. The speed at which the arbitration takes place is not subject to the potential delays of the Court. At present, from the issue of a financial application at Court to the date of a final hearing can take over a year.
6. The venue of the Arbitration can be agreed upon by the parties with the Arbitrator. It does not have to take place at a crowded Court Building with limited facilities several miles away.
What else do I need to know?
The Arbitration award is binding on the parties. There are limited grounds of Appeal but these generally mirror the grounds of Appeal available from the decision of a Judge sitting in Court. An Arbitration award can be put into a Consent Order of the Court if necessary for enforcement purposes.
The costs of the Arbitrator are generally shared between the parties. Given the flexibility of the procedure, the faster timetable and the choice of venue resolving a dispute, Arbitration can result in a saving of fees as opposed to proceeding through Court.
It is worth noting that Arbitration is not available where bankruptcy or insolvency is involved; where there are issues of jurisdiction; issues of status of one or other of the parties; or where there are issues as to the recognition of a foreign marriage or divorce.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.