Arbitration is one way to resolve the financial issues around your divorce without involving a judge. It has many advantages – it’s usually a quicker way to resolve contentious matters than going to court. And it can often be a cheaper route to finalising a financial agreement. But it’s also worth highlighting one of the limitations of arbitration, demonstrated by a recent case (BC v BG – that the arbitrator’s decision is final. That means when you agree to arbitration you are agreeing to be bound by the result. Only in exceptional circumstances will someone who is unhappy with the decision be able to challenge it.

What Is Alternative Dispute Resolution?

In recent years we’ve seen a definite shift away from sole reliance on the family courts to resolve issues surrounding divorce. Of course we still need the court to make decree nisi and decree absolute orders. And it’s always advisable to get any agreement you have reached with your former spouse formalised in a consent order by the court. But more and more family law disputes are settled by way of alternative dispute resolution. Reasons for this include:

  • The dramatic reduction in the availability of legal aid in family cases
  • Uncertainty in court outcomes caused by the wide discretion available to judges under the Matrimonial Causes Act, 1973
  • Increased delays in getting a suitable court date

At Brookman Solicitors in London we are members of Resolution so we are committed to finding ways to resolve disputes in as non-confrontational a way as possible. Ways to handle divorce without going to court include:

  • Arbitration – you and your partner engage the services of a family law arbitrator (there are about 200 in England and Wales) to make a binding decision on financial and other issues. An arbitrator can’t deal with all children issues however.
  • Mediation – a trained mediator will guide you and your partner towards agreeing issues you find difficult to resolve
  • Collaborative law – each person appoints a collaborative lawyer to work with them to reach a settlement. Collaborative lawyers are unable to represent you if the collaborative process is unsuccessful. This provides a real incentive to the lawyers and the couple to make the collaborative process work.
  • Solicitor negotiations – a solicitor negotiates an agreement with your partner’s solicitor using their expertise of family law and their understanding of the likely outcome if your case went to court

Many couples decide to manage the process themselves. In our experience this is really only appropriate in the most straightforward cases. If there are financial matters of any complexity – for example pension valuations  – it is important to remember that you may be signing away significant rights that you will not be able to recover in the future. Many law firms offer free consultations, including Brookman. These short meetings are a useful way to get an overview of the process and decide whether it’s in your interests to instruct a solicitor to represent you in your divorce.

The Arbitratior’s Decision Is Final

The case we mentioned above, BC v BG, was brought by a wife who was unhappy with an award made by the arbitrator she and her former husband had engaged to resolve the financial issues surrounding their divorce.

Interestingly the couple only resorted to using an arbitrator because they felt let down by the court system. The first date they had for their case was postponed because of a court backlog and the second date was cancelled because the judge was ill. In the face of continuing pressure on court time and consequent delays in the family court system it’s clear resorting to private, alternative  ways to sort out finances following divorce is becoming more common.

The wife argued that the arbitrator had made fundamental errors in reaching his decision and had applied the law unfairly. She also believed her husband had adopted a ‘cavalier’ approach to disclosure of his assets and that his credibility had not been properly challenged.

The judge’s refused to reopen the arbitration agreement, saying that the decision to sign up to arbitration was similar to the decision to sign a pre nuptial agreement. It should only be reviewed if there are compelling reasons to do so. This decision demonstrates the binding nature of arbitration and the courts’ extreme reluctance to interfere with an arbitration agreement.

Comment

There are many advantages to settling financial and other issues out of court. But as the case of BC v BG shows, arbitration in particular should not be entered into lightly. The couple in this case may have been influenced by court delays to agree to arbitration. But these delays are commonplace now. Signing an arbitration agreement to speed up a divorce is nothing out of the ordinary. It was certainly simply not sufficient grounds to reopen the agreement. Quoting an earlier case the judge was adamant that factors that would lead to reopening an arbitrator’s award are ‘exceptional’ – the bar is set high.

For advice on any aspect of financial settlements call us on + 44 (0)20 7430 8470 or contact us online.

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