Family Arbitration 

Family Law in Partnership Director, James Pirrie, explains how family arbitration can be used to resolve both financial and children issues. 

Family Arbitration was launched as a means to resolve:

• financial issues in February 2012;
• children issues in July 2016; and
• was expanded to temporary and permanent relocation to certain foreign countries in April 2020.

But it is perhaps only now, with the difficulties of securing Court hearings during the Covid 19 pandemic, that more people are starting to see it as a mainstream option.

Fortuitous preparation for unprecedented times

The work of the policy makers and volunteers is exceptional and we owe them all a great debt. Their efforts meant that we had in place a safety valve of an excellent dispute resolution process for the Covid-19 era, when the heroic front-line judiciary and their support teams would struggle with their underfunded technology and stripped back buildings and “slim-line” support teams to manage the existing work load. Of course disease-related changes expanded those demands still further stretching an already stretched judicial system.

The need for solutions

It is little wonder that with the stress and uncertainty of these Covid-19 times and the challenges of unexpected and unwelcome changes that parties find it hard to reach agreements.

I have written elsewhere of how family lawyers need to step up to a new role – or approach the new role with a new sense of ethics (found here). Many in the separating community needs us to help them find solutions rather than big-wins: many people need to find simply the good enough way forward rather than a battle plan for some no-holds barred conflict.

The ‘new norm’ of family arbitration?

But where there are unresolved issues, despite those good intentions and strenuous efforts, what then? For most, reaching for the ARB1FS or ARB1CS to move their dispute under the protective umbrella of family arbitration will be the right move. They will have in mind (and will welcome) s1 of the Arbitration Act 1996 and the principled approach it sets for how we conduct this process:

“… the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;”

Twin-tracking?

What options exist for those who can’t persuade the other party to adopt family arbitration?

Would our judiciary welcome arbitrators seeking to relieve their courts of the burden of the preparation stages of cases that remained under the court jurisdiction for settlement and determination stages?

• Would the judiciary be impatient at arbitrator interference; or
• Welcome another hour freed up from the court list (even if, with the 20:20 vision of hindsight, the Judge might feel that they would have managed the case rather better)?

Encouragement from training, selection and experience

In the financial world (for example), arbitrators will be more than familiar with the conduct of first appointments. First appointments could be provided even in complex cases within a week or two of appointment, rather than the sixteen week plus wait for a Judge. Arbitrators could be appointed in a way that would give them significantly longer time on the papers than the poor Judge shouldering an overstuffed court list.

Instinctively, one could only see this as positive. Certainly, the parties could expect a significantly faster and lower cost process to the judicial assistance they need through the following steps:

1. Issue an application and sign the form ARB1FS, limited to the arbitrator providing assistance to the procedural steps prior to the financial dispute resolution hearing;
2. Progress to exchange Forms E;
3. Where forms E are delayed, the family arbitrator calls for a ‘directions’ meeting (by video call) and lays down the timetable;
4. Further steps are set out as required but throughout a rigorous adoption of FPR protocols to ensure a proper interface with the court process;
5. The case is then managed to mesh with the timetabling of the first hearing at court which can then advance as FDR ( FPR 9.15(7) );
6. To address any concerns that the Court hearing is “bumped” the terms of reference for the arbitrator might include giving directions for the conduct of a private FDR, to include identifying the tribunal and laying down any final arrangements to give agreement the highest chance of success.

In this way:

• the parties are able to access at an earlier stage the benefit of the Judge’s input and guidance at the FDR, which is the point in the court process when agreement is most likely to be reached;
• in compliance with the overriding objective, the parties are taken through the process more quickly and at lower cost; and
• the burdens on the Court are reduced.

Judicial encouragement

Whether the judiciary would support [interference][assistance] to this extent remains to be seen. However, there is of course the loudly-trumpeted encouragement to peripheral assistance from one of our leading judges (from which perhaps a lead should be taken and we can see how far we get).

In CM v CM [2019] EWFC 16, Moor J, giving judgment in a case settling instructions for a part 25 expert, gave us this:

1. High Court Judges are exceptionally busy. They do not have time to draft letters of instruction or even to determine disputes as to the wording of such letters….  If, however, in a future case, there is a genuine issue as to drafting, I consider it would be exactly the sort of matter that should be referred to an arbitrator who is accredited by the Institute of Family Law Arbitrators.

Costs encouragement

Where we are faced with a reluctant other side, what can be done?

Should a leaf be taken from Mann v Mann [2014] EWHC 537, with appropriate modifications?29.      As I have stated, if there is a written agreement to engage in ADR before going ahead with a Part 8 or an enforcement application then I consider that the  rule may be invoked to adjourn the application for a specified period to enable ADR to take place, even if one party is trying to back out of the ADR agreement. Such an adjournment may be coupled with an Ungley Order to make clear that an unreasonable refusal to participate in the ADR may well attract a costs sanction. But an indefinite adjournment could not properly be ordered. Not only would this amount to a denial of the right of access to justice but it would be giving effect to the ADR agreement in a way that falls foul of the terms of s34(1)(a) Matrimonial Causes Act 1973 (which renders void any agreement which purports to restrict the right to apply to the court for an order containing financial arrangements).

36.      I cannot compel the parties to engage in the mediation. But I can robustly encourage them by means of an Ungley Order. I shall therefore make a further          order in the following terms:-

1. i) If either party considers that the case is unsuitable for resolution by ADR, that party shall be prepared to justify that decision at the conclusion of the enforcement proceedings, should the judge consider that such means of resolution were appropriate, when he is considering the appropriate costs order to make.ii) The party considering the case unsuitable for ADR shall, not less than 7 days before the commencement of the adjourned enforcement hearing, file with the court a witness statement without prejudice save as to costs, giving reasons upon which they rely for saying that the case was unsuitable. Mostyn J

So here the litigant might offer to embark on arbitration … they might indicate that they have the offer of a fixed fee for this stage of the case and they indicate that a refusal to adopt arbitration will ultimately be raised as an argument on costs.

Rolling forward from March 2014, when this case was heard to mid 2020, we have new costs rules which may make such robust approaches more likely:

4.4  In considering the conduct of the parties for the purposes of rule 28.3(6) and (7) (including any open offers to settle), the court will have regard to the obligation of the parties to help the court to further the overriding objective (see rules 1.1 and 1.3) and will take into account the nature, importance and complexity of the issues in the case. This may be of particular significance in applications for variation orders and interim variation orders or other cases where there is a risk of the costs becoming disproportionate to the amounts in dispute. The court will take a broad view of conduct for the purposes of this rule and will generally conclude that to refuse openly to negotiate reasonably and responsibly will amount to conduct in respect of which the court will consider making an order for costs. This includes in a ‘needs’ case where the applicant litigates unreasonably resulting in the costs incurred by each party becoming disproportionate to the award made by the court. Where an order for costs is made at an interim stage the court will not usually allow any resulting liability to be reckoned as a debt in the computation of the assets.  [emphasis provided]

James Pirrie is a director at Family Law in Partnership. He specialises in complex financial issues and non-adversarial and cost effective approaches to divorce and separation including mediation, arbitration and collaborative law. He helps clients take control of the issues that affect them, clarifying priorities, exploring all the options and identifying the best way forward. James is a qualified arbitrator for both financial and children matters. To find out how James can help you in your family law matters, contact James at E: hello@flip.co.uk or T: 020 7420 5000. Contact James Pirrie for more information.

To find out more about Family Arbitration and how it can be used in your family law case, take a look at our dedicated Arbitration page.