Arbitration

Historically, arbitration has been best known in commercial settings. Since 2012 it has been available in the family finance setting. A scheme was established by the Institute of Family Law Arbitrators (IFLA). A Private Law children arbitration scheme was launched by IFLA in 2016.

All family arbitrations are governed by the Arbitration Act 1996 and two sets of IFLA rules (Financial Arbitration Rules 2021 and the Children Arbitration Rules 2021).

The family Arbitration schemes were set up to enable people to resolve family disputes more quickly and cheaply, whilst also allowing for more flexibility and a less formal court setting.

The IFLA Financial Scheme covers:

• Matrimonial Causes Act 1973
• Inheritance (Provision for Family and Dependants) 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

Why Arbitration?

Arbitration has received pervasive endorsements from the judiciary and the higher courts.

Arbitration is a private dispute resolution. Parties voluntarily agree to taking this route outside of the formal court process.

The parties select their Arbitrator (or IFLA can appoint from a member of the Panel, if preferred).

The parties agree the ambit (issues) for the Arbitrator in advance.

When consenting to arbitration, the parties’ consent in advance that the Arbitrators decision will be binding on them (subject to limited rights of appeal). Arbitration is a process whose outcome is generally final.

Arbitrators experience varies, but the application process and Arbitration course is thorough, which requires training and assessment.
By way of summary, the benefits to choosing Arbitration are:

i) Speed – a matter of confirming availability with the parties and Arbitrator, thereby avoiding long court delays and the possibility of last minute adjournments.
ii) Cost – the parties pay the Arbitrators fee, together with any cost of the venue (generally held within Chambers, so no cost) and the cost of a transcription service (if required), compared to potentially months of ongoing legal fees as the case waits for its hearing date. In many cases, the cost comparison falls in favour of the Arbitration route.
iii) Choice of Arbitrator – The parties can jointly decide on the identity of the Arbitrator, unlike court proceedings, where a Judge is allocated regardless. That Arbitrator will have time set aside for reading and preparation, therefore fully prepared for the arbitration hearing.
iv) Consistency – Once an Arbitrator has been appointed, that Arbitrator stays for the duration of the process.
v) Flexibility – under the rules, the parties and the Arbitrator have greater discretion in the procedures they adopt for the purposes of their individual case. The scope and ambit of the Arbitration is defined by the parties.
vi) Selection of issues – by agreement an Arbitrator may be appointed to decide one, a number, or all of the issues in dispute.

The arbitration process

By way of outline, once there is consent by both parties to Arbitrate, an application form is to be completed by both sides (ARB1FS for financial remedy and ARB1CS for private law children). The form must be signed.

The ARB1 asks each party to set out the issues and at what stage (if any) court proceedings are at.

By signing the ARB1, the parties “are entering into a binding agreement to arbitrate… neither party may avoid arbitration (save by agreement)”.

The ARB1 is sent to the Arbitrator for consideration.

Generally, there is a possibility of a free of charge ‘no commitment’ meeting before the Arbitrator’s Terms and Conditions are signed.

In most circumstances a telephone directions/case management hearing will take place thereafter at a mutually convenient time to all.

If by consent and appropriate, the arbitration can be completed on paper. Written submissions are sent to the Arbitrator and a written Award is made by the Arbitrator.

An attended Arbitration includes written evidence, live evidence and submissions, just like the court process.

All Arbitrators decisions are in writing. The decision is called ‘An Award’.

Beware, arbitrations only bind those who are parties to the arbitration agreement, not third parties.

In financial cases, where the court has a supervisory role, once an Award has been made, the parties will apply to the court for a Consent Order confirming the terms of the award. Only in the rarest of cases will it be appropriate for a Judge to make a different Order.

Where one party is dissatisfied with an Award and refuses to apply for a Consent Order, the Court applies the same test as an appeal. Was the Award wrong?

For further details on Children’s Arbitration click here – Children Arbitration

For further details on Financial Arbitration click here – Financial Arbitration