Briefing

Family Arbitration: 5 Top Myths

Posted by: Annmarie Carvalho | Date posted : 03/10/2016

Since family arbitration was introduced in 2012, over 100 cases regarding family finances on relationship breakdown have been resolved by this method. On 18 July 2016, arbitration was introduced for family disputes in relation to children. So disputes about, for example, where and with whom the children are to live, where they are to go to school and how often they see their other parent can now be dealt with by arbitration. Arbitration is a good option for many clients whose case needs adjudication but who would like to avoid prolonged court proceedings and who are attracted by the confidentiality of this private process. However, there is still some tentativeness about referring cases to arbitration. This briefing therefore addresses some of the main misconceptions about arbitration.

Myth 1: Arbitration is only for 'rich' people

A client going through court proceedings only has to pay their legal representatives and not the judge whereas parties going through arbitration also have to pay the arbitrator. This has created a misconception that the introduction of arbitration is creating a two-tier family law adjudication system; arbitration for the rich and court for the poor.

This could not be further from the truth. Many arbitrators offer their services at extremely reasonable rates and, if the dispute is a relatively straightforward one, it can be dealt with in arbitration on paper without the need for any hearings, thereby limiting costs. Also, one of the major advantages of arbitration is the speed at which one can obtain a decision which means clients save money by avoiding months of court proceedings.

Myth 2: Arbitration awards are non-appealable

The scope for challenging an arbitral award/determination is more limited than is the case in court proceedings. However, such decisions are still appealable on a point of law in some circumstances[1] or on the basis of serious or a lack of substantive jurisdiction. There is also an additional safeguard in the process in that arbitral decisions have to be ratified by the court for finance and child arbitration and a judge is unlikely to approve a decision that is clearly wrong.

Myth 3: There are no safeguarding checks in the child arbitration process

A CAFCASS officer is involved in children cases which go through the court process and their role is to act as the voice of the child in such proceedings. They are also responsible for carrying out safeguarding checks in order to ensure the welfare of the child. While CAFCASS are not available within a private arbitration process, the parties or arbitrator can propose that an independent social worker be instructed to provide a report on the child/children's welfare and their wishes and feelings if requested. It is also a requirement, as set out in the ARB1CS application form to start child arbitration, that the parties obtain a background check from the Disclosure and Barring Service and that this be disclosed to all those involved.

Myth 4: Parties still have to go through a long-winded process of submitting their order to court after the arbitration has finished

Once the arbitrator has made the award/determination, in most cases it will need to be turned into a consent order by the solicitor/s and then submitted to the court for approval. However, this is via an accelerated procedure and the President of the Family Courts has provided guidance on the process which makes clear that such orders can be dealt with on paper by a District Judge quickly and efficiently.

Myth 5: The client is likely to 'blame' their solicitor if they recommend an arbitrator whose award then goes against them

Some solicitors are concerned that clients may be disgruntled if their solicitor recommends an arbitrator but the client is then unhappy with either the outcome or the way the arbitration was conducted (or both). While, the standard practice tends to be for one party's solicitor to suggest three names and the other's party solicitor to pick one, there are other options in order to get around this issue, for example by asking IFLA to recommend a suitably qualified arbitrator. Also, this concern may be overstated. As solicitors, we regularly make recommendations to clients and it is our responsibility to do so. Even if a client were to criticise their solicitor for such a recommendation, many would argue that it is still a system which is preferable to turning up at court to have your case heard by a judge who may not have read the papers and who is not a specialist in the sort of case he/she is being asked to decide, which is often the case in court proceedings, but is not the case for arbitration.

Arbitration is a good solution for many clients – and one that it is anticipated will become much more widely used in coming years.

[1] s69 AA 1996 - if the court is satisfied that one or both of the parties' rights are affected by the determination, that the decision of the arbitrator is obviously wrong and that it is a question of general public importance and the decision is open to serious doubt.

If you require further information on anything covered in this briefing please contact Annmarie Carvalho(annmarie.carvalho@farrer.co.uk , 020 3375 7221) or your usual contact at the firm on 020 3375 7000. Further information can also be found on the Family page on our website.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, October 2016