Is Arbitration that 'something'?
"Stop saying something must be done and actually do something" was the plea made by Mr Justice Mostyn to law makers in his recent judgment in J v J  EWHC 3654, a case in which the parties spent one-third of their assets on legal and experts' fees.
J v J was, in many ways, a standard financial relief case with a husband and wife unable to decide how to divide the c.£2.8m of assets they had accumulated in their 18 year marriage. Mr Justice Mostyn described it as an "easily settleable case". But by the time of the trial, the parties' combined costs were £920,000. The judge was "almost lost for words" (only almost) when the scale of this "madness" was revealed to him.
He described the scale of fees in J v J as "totally disproportionate" given the level of the assets. But even if the assets had been £20m, or indeed £200m, is the proportionality of the costs the main issue with such acrimonious litigation? £920,000 is a huge amount of money, no matter how wealthy the parties might have been, and proportionality (i.e. affordability) cannot be the only issue.
Often the greatest harm in such an "attritional war" is the damage done to the family unit. Upon divorce, spouses become ex-spouses but remain parents. In J v J there were two teenage children, aged 16 and 17 at the time of the trial. Children - no matter their age - need their parents to be able to communicate for the rest of their lives, not stuck in the trenches or scarred by the effects of the proceedings forevermore.
So what can we do to save our clients the high level of costs and the harm which can often be caused by litigation?
Mr Justice Mostyn identified arbitration as a possible solution. Arbitration can fill the gap where other non-court DR solutions such as mediation and collaborative law are not suitable or where the couple are unable to reach agreement.
Court proceedings are usually a last resort. However the need for court proceedings in some cases remains because, of course, at the time of a relationship breakdown it can be difficult for parties to reach an agreement, even with professional help – and often they simply need an educated impartial person, in possession of the relevant information, to make a decision for them. But it can take many months, if not years, for the parties to have that decision from a Judge, which inevitably leads to increased costs and hostility.
The benefits of arbitration are clear:
- Choice of the arbitrator
- Certainty of the timescale and an earlier result
- Less hostility between the parties
- Lower costs
In arbitration, parties have the opportunity to be heard, for their case to be presented on their behalves and carefully considered by an arbitrator with the relevant legal experience. The papers do not get lost but are diligently considered by the arbitrator and without the pressure on the arbitrator of other cases in the court diary.
The parties have their decision far sooner than would ever be achieved through the court process and can move on with their lives, having saved themselves legal costs but also, crucially, giving themselves the best chance at having a functional relationship going forward, as parents to their children or simply as ex-spouses.
But it is up to us, as the practitioners, actually to "do something". We cannot wait or rely on further law reforms – we have to act in our clients' best interests and dare to be alternative.
If you require further information on anything covered in this briefing please contact Sarah Hutchinson (firstname.lastname@example.org; 020 3375 7492) 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, November 2014
Stop saying something must be done and actually do something!.pdf102kB