Introducing family law arbitration…

 

You may have noticed a recent post I wrote concerning the prospect of arbitration in family law disputes and the potential benefits it may bring. I’m now delighted to announce that a family law arbitration scheme has launched in England under the Institute of Family Law Arbitrators.

From today, qualified arbitrators can now decide a range of financial family law issues with legally binding outcomes or ‘awards’.

I am one of the first family law arbitrators to qualify under the new scheme, and like my fellow arbitrators, am now a member of The Chartered Institute of Arbitrators.

The family law arbitration scheme covers financial and property disputes arising from family relationship; including divorce settlements, financial provision for children, property and inheritance issues.

The process is straightforward: after both agreeing to undertake arbitration, disputing parties can nominate an arbitrator or have one assigned by the Institute of Family Law Arbitrators. Parties then present cases to the arbitrator, who adjudicates their case and, ultimately, makes a legally binding decision – known as an award.

It is already used extensively and successfully to resolve commercial disputes, but has never been applied to family law before. Below are more details concerning the scheme and a list of current IFLA panel members. More information is available at the Institute of Family Law Arbitrators website.

What is family arbitration?

Arbitration is a form of dispute resolution. The parties enter into an agreement under which they appoint a suitably qualified person (an “arbitrator”) to adjudicate a dispute and make an award (see below).

What are IFLA and the IFLA Scheme?

IFLA and the IFLA Scheme is the result of collaboration between Resolution, the Family Law Bar Association (FLBA), The Chartered Institute of Arbitrators (CIArb) and the Centre for Child and Family Law Reform (CCFLR).   The Scheme will operate under a newly formed company, the Institute of Family Law Arbitrators (IFLA), a not for profit company, the members of which are CIArb, Resolution and the FLBA. CCFLR will have a representative on the Board. IFLA will be chaired by Lord Falconer.

The Scheme has its own Rules (the Rules) that apply to a family arbitration; and a panel of trained and accredited arbitrators.  For more information, please see the Rules on the website.

The administration of the Scheme is undertaken by Resolution on behalf of IFLA, and training and regulation of arbitrators by CIArb.

What areas does the IFLA Scheme cover?

It covers any financial and property disputes arising from family relationships including (but not limited to):

  • Matrimonial Causes Act 1973
  • Inheritance (Provision for Family and Dependents) Act 1975
  • Part III Matrimonial Finance and Property Act 1984
  • Sch. 1 Children Act 1989
  • Trusts of Land and Appointment of Trustees Act 1996
  • Civil Partnership Act 2004
  • Married Women’s Property Act 1882

What areas are not covered?

  • The liberty of individuals
  • The status of individuals or of their relationship
  • All arrangements regarding children except for financial arrangements
  • Bankruptcy or insolvency
  • Welfare benefits
  • Jurisdiction or stay cases
  • Issues over recognition of a foreign marriage or divorce
  • Decisions from sharia councils and other similar bodies
  • Any person or organisation which is not a party to the arbitration

What are the benefits of family arbitration?

In summary these are:

  • Speed

    • It can be established in advance whether a possible arbitrator will be willing and able to deal with matters in an expedited way. Subject to the arbitrator’s availability, the timetable is up to the parties to agree. This is in marked contrast to court procedures, and in nearly all cases is likely to be significantly faster.
  • Confidentiality

    • The entire process is confidential by its nature and this is reflected in the Rules.
  • Costs

    • In many cases, there may be a saving of overall costs over court proceedings. 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 ambit of the dispute, if properly utilised by the parties, should in many cases lead to a net cost saving.
  • Flexibility

    • Under the Rules of the Scheme the parties and the arbitrator will have considerable discretion about the procedure through which a fair result is achieved by applying English Law.
    • It will be for the parties to define the scope of the arbitration. In many cases they will want all their differences arbitrated. In others the arbitration could be limited to discrete issues. It is also possible for an arbitration to be completed on paper, if the parties agree or the arbitrator so directs.
    • There may be flexibility as to the time and place of hearings
  • Choice of arbitrator

    • Parties to a dispute never have the right to choose which Judge will try their case in court, but they do have the right under the Scheme to choose their arbitrator. Knowing that a dispute will be resolved by a selected specialist with appropriate experience will be very attractive to many parties and their advisers. The same arbitrator deals with all stages of the case from start to finish.

What law applies to an arbitration under the Scheme?

The law of England and Wales applies to all arbitrations under the SchemeThe parties are not at liberty to apply a different law to the arbitration. If they seek to do so, the arbitration cannot be conducted under the Scheme.

How does arbitration fit in with mediation?

An arbitration is more akin to court proceedings as an arbitrator will produce a decision, an award, after hearing the evidence and each party’s case.   By contrast, a mediator helps a couple reach their own settlement through agreement.  Mediation can be arranged in parallel with an ongoing arbitration:  sometimes an arbitrator may consider mediation would benefit a couple in an arbitration and he may suggest this.  Some arbitrators are also mediators and therefore fully understand the benefits of settling through mediation.  Conversely, mediators may recommend arbitration as an out-of-court form of resolution if it seems clear that a case cannot settle in mediation.

How does the IFLA Scheme differ from arrangements made through religious bodies including Sharia councils?

The Scheme is developed and regulated by IFLA, a not for profit company set up by Resolution, FLBA and CIArb.  Arbitrators under the Scheme will be subject to the disciplinary code and procedures of CIArb, the self-regulatory professional body for arbitrators.  The IFLA panel of arbitrators consists of specialist and experienced family lawyers specially trained in family arbitration, many having judicial experience.  The arbitration is conducted only in accordance with English Family Law, thus facilitating enforcement by the courts if necessary.  Decisions made under different criteria do not have the same advantage. Awards in arbitration will be similar in outcome to judgments which would have been made in court.  The Scheme has the support of many senior judges and other practitioners of English family law.

How do I start an arbitration under the Scheme?

The first step is for the parties to complete and sign a Form ARB1 in which they agree to arbitrate and to adopt the Rules of the Scheme. Both parties must sign Form ARB1.  They must sign in person; it is not sufficient for their lawyers to sign the Form on their behalf.

In Form ARB1, the parties summarise the issues to be arbitrated. The parties can either nominate an IFLA arbitrator or invite IFLA to nominate the arbitrator. They agree in Form ARB1 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.

After the form is submitted to IFLA:

  • The appointment is offered to the arbitrator
  • The arbitrator seeks the parties’ agreement to his or her terms
  • The arbitrator accepts the appointment and the arbitration formally begins
  • The arbitrator contacts the parties with a view to progressing the arbitration, by agreement or by the arbitrator’s direction
  • Often (though not necessarily) there will then be a preliminary meeting to deal with the further conduct of the arbitration

Is arbitration possible even if we are currently involved in court proceedings?

Yes.  Most family court judges are very aware of the benefits of arbitration.  They have power to adjourn court proceedings for the parties to resolve the dispute through arbitration (as well as mediation and other forms of alternative dispute resolution).  It will not prejudice the court proceedings themselves.  With the court’s approval, the arbitration award can then be made into an order in those proceedings

How do I find an arbitrator?

IFLA maintains a panel of qualified arbitrators.  Details of the IFLA arbitrators may be found on its website at www.ifla.org.uk or by calling the IFLA administrator c/o Resolution

T: +44 (0) 1689 820272

How are IFLA arbitrators trained and what qualifications do they have?

Training and qualification as a family law arbitrator is available only to those who satisfy the conditions established by IFLA.  All IFLA arbitrators are experienced family lawyers, who have successfully completed a CIArb run training course on family arbitration. On successful completion of the course it is also a condition that they become and remain Members of CIArb, the self-regulatory professional body for arbitrators.  CIArb lays down ethical codes for its members and deals with complaints of misconduct through its Professional Conduct Committee.

What is the procedure in family arbitration?

There is no fixed procedure: the procedure for each case is developed according to its requirements. The arbitrator will invite the parties to put forward their proposals at the outset and the arbitrator will then make directions for the procedural steps in the arbitration.  Articles 9 to 12 of the Rules provide more details about the likely procedures and the powers of the arbitrator to give directions.

Do I need a lawyer to represent me?

It is strongly recommended that each party takes legal advice before entering into the arbitration agreement (ARB1), in order to understand the implications and effect of the arbitration process and of the award.  On signing the Form ARB1 parties are asked to confirm that they have been advised as the nature and effect of the arbitration agreement.

Arbitration has some similarities with court proceedings and being represented by a lawyer may be the most effective way to present a case and legal arguments.

What are the powers of the arbitrator?

Once an arbitrator has been appointed, he or she has wide-ranging powers to make decisions on any case management or substantive issues on which the parties cannot agree. In the absence of agreement, an arbitrator can, for example:

  • Rule over what matters are included in the scope of the arbitration
  • Determine all case management issues concerning, e.g., the evidence, the extent of disclosure, the need for written submissions and whether there is an oral hearing. Under the Scheme, both parties are entitled to present their case and deal with the other party’s case; this may, or may not, involve a hearing with oral evidence
  • Make interim orders including interim maintenance
  • Give directions for e.g. the inspection or preservation of property in dispute
  • Appoint an expert or assessor as an alternative to directing the parties to engage expert evidence

What are the costs of a family arbitration? Who is responsible for the costs?

In an arbitration there are two main types of costs:

  • The arbitrator’s fees and expenses 
    • The arbitrator and the parties will set the level of the arbitrator’s fees (usually on an hourly or daily basis) by agreement at the outset of the arbitration.
    • The usual arrangement will be for the parties to bear the arbitrator’s fees and expenses (as well as IFLA’s fees and expenses) in equal shares. However, the arbitrator has a discretion under the Rules to order a party to pay more than an equal share (even up to the full amount) if that is appropriate because of the conduct of that party in relation to the arbitration 
  • The legal or other costs of the parties
    • These are the costs incurred by a party in engaging lawyers to prepare for and represent them in an arbitration, as well as such costs as the hire of a venue for a hearing.  The usual arrangement will be for each party to bear their own legal costs, and not to make any payment towards the other party’s legal costs.  The costs of a venue (and similar costs) will usually be borne equally. However, the arbitrator has a discretion under the Rules to order a party to pay part or all of the legal or other costs of another party if that is appropriate because of the conduct of that party in relation to the arbitration.

What is an award?

At the conclusion of the process or whenever matters in issue are finally determined, arbitrators will issue an award (which is the arbitral equivalent to a final judgment). This is binding as between the parties.

Is an award final and binding?

Yes, it is agreed to be binding between the parties. Currently family law does not permit parties to make their own arrangements for financial and/or property issues on divorce or separation simply by agreement, without the possibility of court review. The Rules in relation to awards acknowledge this: if the subject matter of the award makes it necessary, the parties are bound to apply to the court for an order in the same or similar terms as the award (see paragraph 6.5 of ARB1). This will usually be necessary.

Following recent rulings by the courts on pre- and post-nuptial agreements, it is expected that the Courts will generally uphold awards made under the Scheme. An award will be the outcome of an impartial adjudication following a recognised process – supported by the Arbitration Act – whose object is to achieve a fair result.   It is expected that Courts will enforce awards made under the Scheme.

List of current IFLA panel members

  • Mr David Balcombe
  • Sir Hugh Bennett
  • Mr Andrew Breakwell
  • Ms Jenny Goldstein
  • Mr David Hodson
  • Mr Grant Howell
  • Mr Peter Jones
  • Mr Valentine le Grice QC
  • Ms Frances Lindsay
  • Mr Nicholas Longford
  • Lord Marks of Henley on Thames QC
  • Ms Fiona Read
  • Mr Timothy Scott QC
  • Mr Michael Sternberg QC
  • Ms Marilyn Stowe
  • Sir Peter Singer

For more information and further details of the Scheme, please see the Rules.

 

Marilyn Stowe

The senior partner at Stowe Family Law, Marilyn Stowe is one of Britain’s best known divorce lawyers with clients throughout the country, in Europe, the Far East and the USA.

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18 comments

Rachel - February 22, 2012 at 1:51pm

In theory it all sounds very hopeful and if it works it will be like the magic wand of family law!
Unfortunately, there will always be an intransigent party who will simply not try to be reasonable and will enter into the arbitration process willingly then refuse to be compliant if it does not correspond to their own personal sense of ‘fairness’.
It would be wonderful to keep the financial settlement in divorce out of the courtroom. It is demeaning and deeply unpleasant to be in an adversarial situation in a courtroom with the person you were once happy to be married to. However, in my case it was absolutely necessary to be combative in order to achieve a ‘fair’ outcome. After the words of a district judge at the FDR then the judgement at a final hearing, my ex is still hellbent on non compliance as he feels it does not meet his own personal sense of justice. I’m afraid arbitration in his world would be used merely as a tool to put pressure on me to agree to his idea of a fair settlement.
Having said all of that, I am sure there are going to be recipients of this service who will enter into it with an open mind and be prepared to listen to the voice of reason. I certainly hope so as the current system is so protracted and expensive, it can only be a change for the better to see the IFLA flourish and succeed.

Marilyn Stowe - February 22, 2012 at 2:27pm

Rachel
Once the parties have agreed to the arbitration, they cannot unilaterally back out.
The arbitrator must deliver the award unless both parties agree to end the process. One party cant just stop co-operating with the arbitration process without suffering the fallout.
Arbitration will avoid the stress and trauma of long stop court dates and coming before a different judge each time who might not have time to read the papers, or who might not be particularly expert in family law or in a rush to get on to the next case.
The additional advantages of arbitration to unrepresented litigants are although they will pay for the arbitrator’s time at whatever fee is agreed by them,it is likely to be much cheaper than paying for lawyers to represent each of them through the court process and far better controlled. Compare and contrast with mediation where again a mediator is paid but there is no certainty of a binding outcome.
In the big money cases too where legal fees are already substantial it makes sense to consider arbitration, since it will be quicker and the outcome will remain strictly private.
Having met most of the arbitrators in the training, (I completed the first course last year) I can confidently state that anyone who tries to play games in arbitration will be most unwise and because arbitration has a legally binding outcome it makes general good sense to serously consider going down that route and comparing the pros and cons against the existing court system.
Best wishes
Marilyn

DT - February 22, 2012 at 5:12pm

This is excellent and long over-due. It just makes sense.

I think it’ll have a hugely positive impact on people’s stress levels and costs. It’s got to be a blessing for the courts too.

I have had a look on the website, but it didn’t say too much about an appeals process and how this might be dealt with.

Marilyn Stowe - February 22, 2012 at 5:18pm

DT
The award may be incorporated into a court order. If an appeal is intended it would then be appealed in the usual way through the court and on the same basis as any other court order.
Marilyn

Nicola - February 24, 2012 at 4:03pm

During my 3+ years on the merry go round of a Court of Session divorce summons, I read an article entitled ‘Divorce with Dignity’ promoting the benefits of Collaborative Family Law. It fascinated me as the article was written by the lawyer representing my husband. Here she was promoting her ‘other’ profession quoting the horrors of litigation while inflicting those very same horrors on me.

There was not much change from £100k each in legal fees, which got us divorced but it left us with a marital home. The lawyers just got back on their horses like nothing had changed.

The legal profession are adapting because a case such as mine, which was little more than an arithmetic exercise is a stereotypical embarrassment to the profession. Litigation via the court is for disordered personalities or those doing combat with them, and the whole rotten shambles is just compounded abuse of families. Lawyers are clever enough to know that they wont have this route as a source of income forever.

Arbitration sounds like at last the legal profession is getting somewhere close to delivering a service to families that does what it says on the tin instead of ruining people’s lives.

However, for as long as a lawyer can stand in a courtroom in full combat, while preaching at the very same time about the virtues of Collaborative Law on the Internet, Family Law will remain in my eyes a crooked and predatory profession. I salute those who have the morals not to wear whatever hat will get them a client.

Marilyn Stowe - February 25, 2012 at 9:12am

 Nicola
Thank you. I note you left a similar comment on the Guardian post by Carl Gardner. 
I’m sorry he was writing so negatively about this scheme which I think has the potential for making a real difference to the system. 
I intend as part of an award to draft up a court order in terms of the award, for the parties to present to the court if they wish. They may need a court order for enforcement purposes.
As to costs, the majority of arbitrators are not high flying London based QCs but are based in the provinces and will tailor their fees to the case before them. 
So for many unrepresented litigants it will make commercial sense to agree to arbitrate and share the cost, which is based on the hours spent by the arbitrator on the case and which will be substantially less than incurring two sets of legal fees throughout the court process.
They will also, unlike couples who again are expected to pay for mediation, have the certainty of an outcome, privacy, speed, informal surroundings to have their case heard and the knowledge their case will be handled throughout with the utmost professionalism by the arbitrator of their choice. I don’t accept criticisms about the potential for a badly run scheme when there is no evidence at all of that and in fact to the contrary.
Those couples too who already have lawyers they wish to retain, will also have the same opportunities and for those couples who may be at say FDR stage and caught up in the long wait to have the case heard, may decide the additional cost (which they will agree and decide how the cost is to be met)  is commercially worth it.
 Arbitration has been an effective tool in other areas of law. It doesn’t replace the court system and for many won’t, but for others who wish to remain outside the court system it does give the best, dignified form of alternative resolution service yet devised.
Thank you for your comment.
Marilyn

ObiterJ - February 25, 2012 at 6:36pm

A welcome scheme I think. This is, if I may say so, a very high quality panel. However, will it prove to be prohibitively expensive for all but the well-to-do? Will a court order be required, necessary, advisable to confirm the award?

Marilyn Stowe - February 26, 2012 at 11:28am

Obiter J
Thank you. 
I have been having similar conversations with John Bolch of Family Lore.
http://www.familylore.co.uk/2012/02/debating-family-law-arbitration.html#comment-form
I received an invitation to train as a family Arbitrator which I accepted in a scheme which had already been set up and rules drafted. 
My understanding is that an Arbitration award is considered to be binding between the parties and will be upheld by the courts. Senior Judiciary are fully aware of this scheme. The scheme is operated by IFLA and has been set up after considerable consultation by the Institute of Chartered Arbitrators in conjunction with Resolution and the FLBA. A qualified family Arbitrator must be a member of the Family Arbitrators Panel, operated by IFLA and also be a member of the ICArb. and the Rules of the Scheme and relevant provisions of the Arbitration Act do apply. More about the scheme will no doubt unfold in due course. It has so far only had a ‘soft launch’ but a ‘hard launch’ of IFLA will take place in March.
As to costs, as I said to John Bolch the very poorest people will not be able to afford arbitration if they can’t afford to meet the fees. I intend to tailor my fees to the case. In the vast majority of cases where there are unrepresented litigants, I suspect that an agreement to share the arbitrators fees based on an estimate of hours required x the arbitrators charge out rate, will be cheaper than paying a mediator and/or two sets of legal fees through the court process. 
Alternatively for represented litigants there may be savings too:- no hearings need take place such as an FDA or FDR and in terms of time and privacy there are also obvious attractions. An arbitration can take place for example to deal quickly with interim maintenance or hear the case where there has been a failed FDR and there is a long wait time to the final hearing.
Arbitration works well in other areas of the law. True there are arbitration costs but equally the privacy issue, the difference in procedure, comparative informality and the speed more than compensates, which is why it is a preferred route for dispute resolution.
There isn’t a perfect process for dispute resolution and there are drawbacks to them all. However, I am excited by the potential for family law arbitration in relation to finances and clients to whom I have spoken, at various financial levels, certainly seem keen and I so I would suggest we wait and see how it works out. 
Thank you for your comment.
Marilyn

DT - February 26, 2012 at 2:23pm

I think this will be a success, but let’s wait and see.

I know it’s a process which many will be undertaking when they are very stressed and possibly distressed; however, I think like a lot of things in life, it’s important for all parties to enter into the process in the right spirit, with the right attitude and an open mind. 

No system is perfect and until somebody comes up with a better alternative, I think we’ve got to give it a go and see how it pans out. The process may be tweaked and tailored over time, but for now, let’s watch and wait.

Rachel - February 26, 2012 at 4:47pm

What would happen if both parties enter into the arbitration process and one party does not disclose assets? It this became a bone of contention, would the arbitrator have the power to order disclosure before proceeding or would the matter be passed over to the courts by way of a directions appointment and a district judge taking control? Would this constitute the breakdown of the process or would it simply revert back to the arbitrator once an order for disclosure has been made? I think it is quite common for a party to be coy about disclosure and might feel ‘safe ‘ in the arbitration process that he/she cannot be compelled by the appointed arbitrator to commit honestly to the process in the same way that the court can. And if one party cannot unilaterally back out of the process, would it just continue without his/ her co-operation and the subsequent award would still be binding?
Unfortunately, I believe the formality and gravity imposed by the the courtroom setting may be necessary for some people to commit to the process. Even then, orders and directions are frequently ignored by some and the costs incurred by this have to be met by the innocent party.

ObiterJ - March 1, 2012 at 10:19am

Marilyn – thanks you for your reply. As I said about – “A welcome scheme I think.” I agree with DT (26th Feb) that we need to try this. Nobody in their right mind could possibly claim that fighting things out in court is the better way. The problem we have is how to change the mindset of people so that they think arbitration/mediation and not “I’ll see you in court.”

Arbitration works extremely well in many complex areas – especially in commercial matters often involving huge sums of money and difficult legal questions. I see no reason why it should not work in family law and, let’s face it, most family lawyers have always tried to get parties to agree rather than have something imposed on them by a court.

Do you wish to share any views relating to enforcement should the arbitrators award not work? I suppose that here we turn to the courts. However, will it not be necessary to amend the law so that enforcement procedures available to family courts become available here? I think I touching on a potentially complex point here which ought to be well thought through and actioned before we go full steam ahead for arbitration.

Marilyn Stowe - March 1, 2012 at 12:25pm

Obiter J
Thank you for your comment.
As I understand the position, it is expected that an arbitration award will where required, be submitted to the court in the necessary format to be turned into a court order. It is expected that the order will be made in terms of the award by the court within the parties proceedings.
My understanding is that the courts will not normally “second guess” the award and a dissatisfied party will have to appeal the order when made.
Enforcement will follow the making of the order if there is a failure to comply with the terms.
So at the moment given the theory, I see no need for immediate legislation, but I dont rule it out. I suppose it will depend on the approach of the courts.
Best wishes
Marilyn

hazel harris - March 20, 2012 at 1:21am

will this help my case against siblings who are after my late partners assets which is only a few thousand pounds that he kept in his account that we both earned they didn’t have much to do with him until he died now they want all that he owned we were together for 24 years and he wouldn’t have wished for them to have anything as he didn’t even like them i’m sorry to say.

Marilyn Stowe - March 20, 2012 at 11:35am

Hi Hazel
Yes, Inheritance Act cases are suitable for family arbitration.
Best wishes
Marilyn

Mum - May 30, 2013 at 11:53pm

To Nicola on February 24, 2012 at 4:03 pm
Nicola, very well written post. 3 years in the Irish legal system over 100 court appearances and left sickened to the stomach of a “profession” that feeds of peoples vulnerability and misery has been an experience. I do not know what the UK is like but here in Ireland we are gagged by the in camera tule. A rule supposed to protect the vulnerable and privacy of families but which instead only serves to conceal the most horrific abuse of the system for financial gain of legal teams. In high conflict divorces, when there is madness, badness or sadness, the person who will be controlled and manipulated is the victim. I am appalled at the lack of values and ethics, the lack of training of judges the extortionate fees charged by dubious so called experts who answer to no one and whom once established are difficult to challenged. The barristers, some of whom seem equally appalled by the behavior of solicitors, to whom they are dependent professionally are unable to challenge as in such a closed system it would be professional suicide. Judges are not answerable to anyone and some display more serious personality disorders than those they are presented with. I believe arbitration could be solution however I would like to see a strong Ethics and Values training as part of their qualifications. I cannot see the lucrative closed shop that is the Irish legal profession take kindly to a potentially fairer, more compassionate and holistic approach to family law which could in a couple of months achieve a solution what they draw out and milk for years! We can only hope.

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