Alternative Dispute Resolution

The family courts were overwhelmed with cases prior to the Pandemic, leading to long delays and, perhaps most distressing to the parties engaged in this type of conflict resolution, last minute adjournments which can incur significant wasted costs, for which there is generally no recourse, together with the distress and anxiety associated with yet further, often prejudicial, delay in ending what is for most participants a highly unpleasant and distressing experience.

The allocation of court resources and court time has been squeezed further by the Pandemic and despite the huge efforts by all those involved in the administration of justice, delays and the incidence of last-minute adjournments has risen sharply, with all the attendant distress and costs. This is particularly so in the sphere of financial remedy applications.

Arbitration is used very successfully in many commercial contexts for both small and complex claims and given the current constraints on the family court the time is ripe to consider Alternative Dispute Resolution (“ADR”) as a more expeditious alternative to court based dispute resolution in family proceedings.

There are generally considered to be three types of ADR in family proceedings: mediation, arbitration, and collaborative law. I will discuss and compare two of these options in this article: mediation and arbitration in place of financial remedy proceedings.

It is to be noted that in all these alternatives, the court retains ultimate jurisdiction to ratify the decision or agreement by way of a court order which is ultimately binding on the parties. Although this is not a “rubber stamping exercise” and the court must exercise its discretion applying the factors set out in s25 of the MCA 1973 (for financial remedy orders) just as it would if conducting a final hearing, it is highly likely that it will endorse the awards/agreements.

Arbitration

Arbitration is a form of ADR which is an option for separating couples to consider as an alternative to the court. It is essentially a private court hearing where the parties agree and appoint an arbitrator that they think is most suitable to decide for them, unlike the court procedure where the judge is assigned by the court.

Alternatively, the parties can ask the Institute of Family Law Arbitrators (IFLA) to choose for them and www.Ifla.org.uk holds the register of all trained and accredited arbitrators in England and Wales.

The parties pay their own costs, cost of any experts and the arbitrators costs, which are agreed in advance. There may be one or several hearings, arbitrators may hear evidence, or the matter can be dealt with as a paper exercise. The process tends to be less expensive than court litigation primarily due to a compressed schedule for compliance with discovery and disclosure and trial.

The parties can be legally represented, or by someone else they choose or a Makenzie friend. They may also act as a litigant in person. The parties can choose the venue and timetable that best suits them, rather than the court, and they will be afforded more privacy as they will not have to attend a public court building. Venues can also be chosen to afford a higher level of safety having regard to current requirements for social distancing, cleanliness, and ventilation.

There are two Family Law arbitration schemes governed by the Institute of Financial Arbitrators (“IFLA”): Financial and Property matters, which commenced in 2012, and which can be used in place of Financial Remedy and Trust of Land and Trustee Act proceedings and Children matters, which commenced in 2016 and now includes relocation cases. Both schemes are governed by the Arbitration Act 1996 (“AA 1996”) and the IFLA set of rules under which the parties are free to agree the terms and scope of the arbitration, as well as the identity of the arbitrator.

After the agreed process has concluded, the parties will receive a written award which sets out the reasoning and calculations as well as the decision, which is binding on the parties, much like a judgment following a contested court hearing. The parties can then put the decision into a suitable court order to submit to the court for approval.

Many people were wary of arbitration because of the perceived inability to appeal a decision that they did not agree with. However, following the recent decision of Haley v Hailey [2020] Civ 1369, this may be less of an impediment as it concluded that the courts supervisory jurisdiction remains firmly n place to correct an unjust outcome after considering the correct test where one party declines consent to or challenges the making of an order under the Matrimonial Causes Act 1973 (“MCA 1973”) in terms of the arbitral award. In particular, the court had to determine whether the correct test to be applied was the restrictive test pursuant to s. 69 of the “AA 1996” with the court of appeal noting that the test had “become increasingly strict, and the basis for challenge correspondingly narrow” or the whether the correct test was the “appeals test” applicable under the MCA 1973. The Court of Appeal decided that the correct test was the “appeals test” which puts the arbitral decision in the same category of finality as the result of a court- based decision after a financial remedy trial. Although this was an appeal arising from a financial arbitration, the same principles apply to the children scheme.

In these times of an uncertain economy and job losses, Arbitration can be especially useful in variation of maintenance disputes, where otherwise delays and legal costs can all too easily become disproportionate.

Mediation

Mediation is without prejudice negotiations to settle the dispute. A mediation agreement is not legally binding but is a without prejudice document which cannot be disclosed in any court proceedings but can become legally binding if both parties agree to the terms being made into a consent order which is ratified by the court.

The parties choose the mediator who is independent and paid by the parties and there are many mediators who are experienced family law practitioners. The Family Mediation Standards Board maintains a professional register of family mediators at http://www.familymediationcouncil.org.uk .

The parties are more often unrepresented but they can choose to be represented, or there can be a hybrid arrangement; however, a mediator does not decide for the parties but helps them to settle their dispute by a voluntary process of obtaining relevant information, developing options, and exploring ways to resolve the dispute through discussion and narrowing of differences and through this process helps the parties to arrive at an agreed solution in relatively informal circumstances.

The parties are afforded a high level of control over the timetable and venue and a higher level of privacy. If an agreement is reached, this is recorded by the mediator in a written document called a Memorandum of Understanding. The parties will normally receive legal advice on the agreement and one of the parties’ lawyers will turn the Memorandum of Understanding into an order which can be lodged at court for approval by a judge.

The advantage of mediation is that it can radically save time and costs and the mediator does not tell the parties what to do so they can control the result and be a part of the resolution. This can also be a disadvantage in that the parties may not be able to come together on an agreement and will end up in court anyway, which is no longer cost effective.

It may be thought therefore that mediation is most suitable where there is a reasonably high level of trust and cooperation between the parties.

If you require advice or assistance, do not hesitate to contact clerks@becket-chambers.co.uk.