Arbitration

As an alternative form of dispute resolution, we can now offer access to binding family arbitration for all aspects of financial and property disputes arising from family relationships, under relevant family legislation, including on divorce and separation, family dependence under inheritance claims, cases involving children and civil partnerships.

Arbitration is a form of dispute resolution. The parties enter into an agreement under which they appoint a suitably qualified person to adjudicate a dispute and produce a result which will bind them. The award (as the decision is called) will then be converted into a court order if required. It thus will have the same status as a court order but one likely to be obtained far more quickly and more cheaply than one obtained by litigation in court.

Family arbitration is available for all family or relationship-based financial and property disputes. It is not available in cases where individual liberty might be at stake, or deal with individual relationships; the care or parenting of children; or the bankruptcy, or insolvency of any person or organisation which is not a party to the arbitration.

To take part, the parties complete and sign a form called “ARB 1”, by which they agree to arbitrate and to adopt the rules of the Scheme and also summarise the issues to be arbitrated. The parties agree from the outset that the arbitrator’s decision will be final and binding and that if necessary they will apply for a court order to give effect to it.

They can either choose their own arbitrator or invite the Institute of Family Law Arbitration (IFLA) the umbrella governing body) to nominate the arbitrator. It is important to remember that arbitration cannot be forced on a reluctant party. All arbitrations under the Scheme have to go via IFLA which charges a modest administration fee.

Once the formalities have been concluded, an appointment is offered to an arbitrator who then seeks the parties’ agreements to his or her terms. If they are accepted, the arbitrator accepts the appointment and the arbitration formally begins, usually by contacting the parties with a view to furthering the conduct of the arbitration, by agreement, and often (though not necessarily) there will then be a preliminary meeting to deal with the further conduct of the arbitration.

Thereafter, what happens after this depends on what the parties want. In many cases there will be a final hearing, but arbitration can be entirely a paper exercise. Parties will usually be represented at hearings by solicitors or barristers.

The judgement and order made by an arbitrator is known as an award. There can be interim awards as the arbitration proceeds. The parties agree that the arbitrator’s decision will be final and binding and that if necessary they will apply for a court order to give effect to it.

There are many advantages to arbitration, including the ability to choose the arbitrator. He / she will hear the case - ‘sit’ at a time and place convenient to the parties, including evenings and weekends, if so desired.

Privacy is also important; the arbitration is conducted in private and is entirely confidential. Equally, it is a very flexible means of solving disputes, which makes it very attractive. The way of providing written statements of case, disclosure, witness statements and/or expert evidence can all be agreed. Disclosure can be limited by agreement or direction.

The parties can also decide the scope of the arbitration. In some cases they will want the entire dispute arbitrated. In others there may be a large measure of agreement but one or a few intractable areas of disagreement, for example, the value to be attributed to a particular asset. It can be used to resolve a discrete issue which may be holding up a settlement. It can also take place without a hearing which will produce an even swifter result.

The IFLA Scheme provides that subject to (a) prior agreement and (b) the arbitrator’s overriding discretion, the normal rule will be no order for costs. However, the parties can agree any costs rules which they like. The arbitrator has discretion to depart from the ‘no order’ starting point on the basis of the conduct of a party in relation to the arbitration. In many cases there will be a significant saving of overall costs.

Of course 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, and the potentially huge saving of time - will, in the vast majority of cases, lead to a net cost saving.

Having received an award, the law provides that an award is enforceable with permission of the court in the same manner as a judgement. Under the New York Convention arbitral awards are readily enforceable internationally. An award under the Scheme is final and binding, subject to review or appeal. If an award provides for continuing payments (such as maintenance) it can be subject to a further award, or court order: plainly there has to be scope for variation.

4 Paper Buildings has two of the first qualified QC arbitrators. Both Jonathan Cohen QC and Michael Sternberg QC are highly experienced and well-regarded family law silks. Stephen Lyon a highly respected leading junior has also qualified as an arbitrator.