Arbitration is a form of alternative dispute resolution or “ADR”.
“Arbitration has a long history in certain areas. For example, many commercial and construction contracts provide for dispute resolution in this way. Arbitration in family law will be another tool in the box of methods of alternative dispute resolution. At a time when there is a need to find solutions in family disputes outside the courtroom, it is a logical next step to offer arbitration as another means of doing so.” Per the Rt Hon. The Lord Falconer of Thoroton.
By the process of arbitration, parties enter into an agreement under which they appoint a suitably qualified person (an “arbitrator”) to adjudicate a dispute and make an award.
It is an alternative to the issuing of court proceedings for a great many cases and in relation to the field of family law in particular it can greatly assist parties to reach a swift outcome to a great many disputes – for example, to financial disputes arising from separation or to resolving child arrangements issues.
By entering into arbitration, the parties agree to be bound by the reasoned written decision of the arbitrator.
The arbitrator’s decision is called an Award (finances) or a Determination (children).
What is IFLA, and the IFLA Scheme?
The Institute of Family Law Arbitrators (IFLA) and the IFLA Scheme are the result of collaboration between Resolution, the Family Law Bar Association (FLBA), The Chartered Institute of Arbitrators (CIArb) and the Centre for Child and Family Law Reform (CCFLR).
The Scheme operates under the Institute of Family Law Arbitrators (IFLA), a not for profit company, the members of which are CIArb, Resolution and the FLBA.
The IFLA Scheme has two component parts:
- The Financial Scheme, launched in 2012, and
- the Children Arbitration Scheme rolled out in 2016.
What does the financial scheme cover?
Any financial and property disputes arising from family relationships including (but not limited to) disputes under:
- Matrimonial Causes Act 1973
- Inheritance (Provision for Family and Dependants) Act 1975
- Part III Matrimonial Finance and Property Act 1984
- Sch. 1 Children Act 1989
- Trusts of Land and Appointment of Trustees Act 1996
- Civil Partnership Act 2004
- Married Women’s Property Act 1882
What areas does the Children Arbitration Scheme cover?
Generally, any issue between parents or other persons holding parental responsibility or a sufficient interest in a child’s present or future welfare:
- Where a child should live including shared living arrangements
- Visiting arrangements including holiday time to be spent with a non-residential parent
- Disputes concerning routine and non-life threatening medical treatment
What are the benefits of family arbitration?
The principal benefits of arbitration are:
Subject to the arbitrator’s availability, the timetable is up to the parties to agree. The parties avoid the risk of a case being adjourned or not finished because of pressure on court time or a judge becoming unavailable. Arbitration is likely to take significantly less time than court proceedings.
The entire process is protected by strict confidentiality under the Rules of both Schemes.
The parties have to pay the arbitrator’s fees, the cost of any venue which is hired, and the cost of a transcription service, if required. However, the ability to limit disclosure and the scope of the dispute, if properly utilised by the parties, should in many cases lead to a cost saving, since the parties can agree to slim their case down and concentrate on the essential points to be decided.
Under the Rules of the Schemes the parties and the arbitrator have considerable discretion over the procedures they adopt in order to reach a fair result under English Law.
The parties define the scope of their arbitration. In many cases they will want all their differences arbitrated. Alternatively, the arbitration may be limited to agreed issues, leaving room for further negotiation or application to the court. It is possible for the arbitration to be completed on paper, if the parties agree or the arbitrator decides this is the best approach, further reducing costs.
The parties in consultation with the arbitrator have complete flexibility as to the time and place of hearings.
Choice of arbitrator:
Parties to a dispute do not have the right to choose their judge, but they do have the right under the Schemes to choose their arbitrator. Knowing that a dispute will be resolved by a selected specialist with appropriate experience will be very attractive to many parties and their advisers. Once appointed, the arbitrator deals with all stages of the case from start to finish.
Is it worth considering instead of mediation?
Arbitration resembles court proceedings. An arbitrator will produce a decision after hearing the evidence and each party’s arguments in support of their case. By contrast, a mediator helps a couple reach their own settlement through agreement.
Arbitration and mediation can complement each other in certain cases.
The arbitrator may consider that mediation would benefit the couple and would then suggest this.
Mediators can also recommend arbitration if mediation breaks down or if an agreement is reached in mediation on most but not all issues.
It is therefore possible for a mediator to refer a specific part of a dispute to arbitration, in order to resolve a sticking point during the course of mediation.
Unlike court proceedings arbitration can deal with a single issue.
What are the costs of a family arbitration? Who is responsible for the costs?
There are two main types of costs:
(1) The arbitrator’s fees and expenses
The arbitrator and the parties will set the level of the arbitrator’s fees (either on an hourly or daily basis, or for an overall fixed fee) by agreement at the outset of the arbitration.
The usual arrangement will be for the parties to pay the arbitrator’s fees and expenses (as well as IFLA’s fees and expenses) in equal shares. However, the arbitrator has a discretion under the Rules to order a party to pay more than an equal share (even up to the full amount) if that is appropriate because of the conduct of that party in relation to the arbitration.
(2) The legal or other costs of the parties
These are the costs incurred by a party in engaging lawyers to prepare for and represent them in arbitration, as well as such costs of hiring a venue for a hearing. The usual arrangement will be for each party to pay their own legal costs, and not to make any payment towards the other party’s legal costs. The costs of a venue (and similar costs) will usually be shared equally. However, the arbitrator has discretion under the Rules to order a party to pay part or all of the legal or other costs of another party if that is appropriate because of the conduct of that party in relation to the arbitration.
Is family arbitration then really worth considering?
In a word yes, depending on the issues and assets say in the case, family arbitration is a direct and real alternative to the costs and risks associated with protracted litigation.
At Prism Family Law, we offer all potential client’s the opportunity to meet with us for free and offer all a 30 minute initial appointment so that we can discuss your requirements and case such so as to allow us to advise you on all the available options open to you to choose from. If you find yourself in a position whereby either you or your partner are contemplating bankruptcy prior to or during separation then it is imperative that you seek advice at the earliest opportunity to determine what impact that may have on the family. We would strenuously advise all that may be impacted by the issues of this article to seek legal advice and help at the earliest opportunity.
Should you require the services of Prism Family Law for any family law related matter please do not hesitate to contact solicitor Andrew Wraith in the first instance.
Prism Family deliberately offer free initial consultations. You can call us on 0191 269 6871 or email us via firstname.lastname@example.org. You can also follow us on Twitter, LinkedIn and Facebook for the latest news and views on family law.