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08 December 2021

Arbitration: going to court to resolve finances or children disputes is not the only option

3 mins

Over the last few years, the practice of arbitration has become increasingly popular for those who are wishing to seek a swift resolution of their finances upon divorce, or in respect of disputes concerning child arrangements. With the backlog of court listings exacerbated by the Covid-19 pandemic and last-minute adjournments unfortunately becoming more common, it is unsurprising that arbitration and other methods of alternative dispute resolution are being taken up as a different option to traditional court-based litigation.

What is arbitration?

Instead of reaching an agreement as part of mediation, parties who decide to arbitrate agree that the arbitrator’s decision will be binding upon them. The effect is that they contract to submit to the arbitrator’s decision or award. It is then open to the parties to submit the arbitrator’s decision to the court to have it turned into an enforceable court order. Parties can engage in arbitration outside of court proceedings or in conjunction with ongoing proceedings.

Who is an arbitrator?

The Family Law Arbitration Scheme was launched by the Institute of Family Law Arbitrators (IFLA). Arbitrators are specially trained barristers who are members of the Chartered Institute of Arbitrators (CIArb). They will be familiar with the ins and outs of court-based litigation, representing applicants and respondents in the courts on a day to day basis. Many of them will also sit part-time as judges or recorders and are therefore perfectly placed to consider finance or children disputes and make decisions on an impartial basis.

Why arbitrate?

There are many advantages of engaging in arbitration, as opposed to pursuing a court-based remedy:

  1. Speed: court proceedings can take between six months to one year (possibly longer in the current climate), whereas an arbitration award can be obtained within weeks, or even days.
  2. Convenience: clients can choose their venue (remote or in person), their arbitrator, the timescales (with less risk of adjournment and even evening or weekend availability).
  3. Autonomy: parties can agree between themselves how their dispute should be resolved and who is best placed to make this decision, allowing joint control and ownership of the overall process.
  4. Privacy: the process is entirely confidential, as opposed to court proceedings where there is a risk that reporters could attend hearings or judgments could be published.

Are there any disadvantages?

The parties do have to pay the costs for arbitrating, including the costs of the arbitrator and of their legal representation, if they choose to be represented. However, arbitrator’s costs are becoming increasingly competitive, particularly contrasted with the eyewatering costs of lengthy court proceedings and the risk of last-minute adjournments.

In the past, arbitration decisions and awards have been difficult to appeal or challenge. However, following the recent case of Haley v Haley [2020] EWCA Civ 1369, if the parties wish to appeal a decision, the threshold is now lower than previously thought and the same test is applied when challenging both a court-based judgment and an arbitration award.

What next?

Please do get in touch with our Family team in the future if you are interested in pursuing arbitration, and we can advise you as to whether it would be appropriate in your individual circumstances.

Last week, we were joined by Jason Green and Fiona Hay of Harcourt Chambers (both members of the Chartered Institute of Arbitrators) to explore family arbitration during Covid-19 and beyond as part of a remote webinar for family law practitioners. This webinar is available to watch on demand here.

How can we help you?

We are here to help. If you have any questions for us, please get in touch below.