On 22nd February 2012 a new method of alternative dispute resolution was launched to assist parties to resolve their family problems: arbitration. Arbitration in Family Law developed at around the time when the scope of legal aid was being restricted as a result of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the Regulations made pursuant to that Act.
Although people would still receive some legal funding from the state to assist with mediation, mediation requires the parties to reach agreement (with the aid of a mediator). Sometimes parties are unable to reach that agreement, often because they view the relevant facts to their case and the impact of those facts in a different way. Where they cannot reach a decision, someone else needs to be able to do that for them, having heard all sides of an argument and providing a reasoned outcome for them by which they would be bound. Until 22nd February 2012, the only way parties to a dispute concerning family law issues could achieve this was by going to Court. Courts are overwhelmed with cases and proceedings are slow by virtue of the fact that the parties have to fit in with a Court’s timetable. Each area of a Court’s jurisdiction follows procedure rules, and those rules generally set out at the start, amongst other things, that the parties’ case has to have allotted to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases. The nature of the appropriate share is determined by the Court, and not by the parties, to whom the resources may appear to be inappropriate.
The way forward, then, may be to arbitrate. The Family Law Arbitration Scheme was launched by the Institute of Family Law Arbitrators (IFLA), which is a not-for-profit organisation created by the Chartered Institute of Arbitrators (CIArb), Resolution and the Family Law Bar Association, together with the Centre for Child and Family Law Reform. There are two arbitration schemes it runs – Financial and Property matters (commenced in 2012), and Children (commenced in 2016). They are both governed by the Arbitration Act 1996 and their own particular set of rules. The governing law for Arbitration under these schemes is England and Wales and the parties cannot contract out of that. Otherwise, the parties are free to agree the terms and scope of the arbitration, including the identity of the arbitrator.
What is Arbitration?
Arbitration is a form of alternative dispute resolution, the alternative being an alternative to going to Court. As the parties agree to arbitrate, by doing so they also agree that the arbitrator’s decision will be binding upon them. The parties agree the scope of the arbitration and, together with the arbitrator, they choose the procedure of the arbitration (which may be by way of hearings, by paper determination only, or otherwise a combination). The effect is that they contract to submit to the arbitrator’s decision. Once the decision has been made, it is expected that the parties will submit an order reflecting the outcome of that decision to the Court to have it made into a final and enforceable court order.
By virtue of agreeing to submit to arbitration and the binding nature of the decision, they also agree that there are very limited bases for appeal and that they cannot then go to the Court to ask for a re-determination. Those limited bases arise under the Arbitration Act 1996 and provide that an award or determination may be challenged if the award is made without jurisdiction (s.67), if there has been a serious irregularity that has caused, or will cause, substantial injustice (s.68), or an appeal on a point of law (section 69). Under the Act, the parties can agree to contract out of section 69 only. Challenges under these sections must be brought within 28 days of the date of the award / determination.
Parties can be represented at arbitrations should they choose, either by a lawyer, someone else that they choose, or may receive assistance from a McKenzie Friend if they choose to act as a litigant in person.
The Financial Scheme
The IFLA financial scheme covers financial and property issues. It can be used in place of Financial Remedy Proceedings or otherwise Trusts of Land and Appointment of Trustee Act 1996 proceedings. It cannot be used to determine proceedings in relation to insolvency, issues concerning the status of the parties’ relationship, and disputes concerning the parenting or care of children.
Financial arbitration is very useful in chattels disputes following financial remedy proceedings, in variation of maintenance disputes (where legal costs can otherwise frequently become disproportionate), in Trusts of Land and Appointment of Trustee Act disputes where the parties require a private forum (as generally these latter proceedings are held in public), and in disputes under Schedule 1 of the Children Act 1989 (financial provision for children).
Arbitration is not suitable under this scheme to determine jurisdiction issues or recognition of divorce / foreign marriage. Third party disclosure orders cannot be made by an arbitrator. Interim injunctions cannot be made by arbitrators, e.g. freezing orders and search orders. Such orders and the need for them are clearly at odds with the need for the parties to agree the terms and scope of arbitration.
The Children Scheme
The Family Law Arbitration Children Scheme was launched on 18th July 2016 with the aim of giving parties the option of obtaining a prompt decision in a children dispute in a cost effective manner. The scheme empowers the arbitrator to determine private law disputes between people holding parental responsibility or those with sufficient interest in the child’s welfare in circumstances where there are no serious safeguarding issues. If there are such safeguarding issues that arise or become apparent, then the case is generally unsuitable for arbitration, e.g. where there is domestic abuse, substance misuse, and mental illness impacting on the ability of a party to provide safe care for a child. Vulnerable parties might also find that arbitration is inappropriate for them and it would be presumed that their ability to provide informed agreement to arbitrate is limited.
Children Scheme arbitration requires parties to provide detailed safeguarding information at the commencement of the arbitration process, including a police check from Disclosure Scotland (which also applies in England and Wales) and, as of a change to the Rules coming into force on 6th April 2020, a check from the Disclosure and Barring Service (in England and Wales). The arbitrator will then consider the suitability of the case for arbitration and will either accept or reject it. If there are current safeguarding concerns, then there is an obligation for the arbitrator to disclose that to the relevant authorities. As the arbitration process continues the parties are obliged to keep the arbitrator informed of any other relevant safeguarding information that arises.
Arbitrators have the power to require the parties to instruct experts, including independent social workers to ascertain wishes and feelings of the subject child and ensure their voice is heard in the arbitration, and/ or to advise on welfare issues arising. Where the parties cannot agree on the identity of the ISW, the arbitrator can make that determination.
Children arbitration can be used to determine child arrangements, vary existing arrangements, determine the method and mechanics of contact arrangements, determine issues about holiday contact, where a child should go to school and what provision might be made for education, whether a child should undergo non-life threatening, non-life changing medical treatment, e.g. dental treatment, and, as of 6th April 2020, issues concerning removal of children from England and Wales for holidays and for permanent relocation to certain specified countries and jurisdictions.
As well as cases with significant safeguarding issues, arbitration cannot be used to determine child abduction proceedings and disputes concerning life-changing or life-threatening issues.
How Do I Find an Arbitrator and What Happens Then?
www.Ifla.org.uk holds the register of all trained and accredited Family Law arbitrators in England and Wales. The people registered there are experienced family law practitioners who have completed the training course successfully and who have become and remain members of the CIArb. All accredited arbitrators under these schemes appear on the IFLA website.
The parties can choose an arbitrator, invite IFLA to choose one for them, or otherwise draw up a shortlist and ask IFLA to select one of those for them. They do that on submission of their completed application to arbitrate to IFLA (Form ARB1FS for the financial scheme and Form ARB1CS for the children scheme).
Once the arbitrator has been selected and provided with a copy of the relevant application form, they will contact the parties and suggest an initial meeting to discuss the nature and scope of the arbitration. The arbitrator will provide the parties with their terms and conditions and the parties will have to submit to them. Once the arbitrator accepts the appointment, the arbitration commences. The way the arbitration will proceed will then be discussed and directions might be given, or an appointment set down for directions in the arbitration to be considered. The parties pay their own legal costs, costs of any expert, and the arbitrator’s costs. This will all be set out at the start.
There may then be several hearings, one, or none if the matter is to proceed on paper only. The arbitrator may hear evidence from parties and from experts and will then reach a decision on what should occur, which decision will be binding upon the parties.
At the conclusion of the arbitration, the parties will receive a written award (financial scheme) or determination (children scheme) which sets out the reasoning and calculations made, as well as the decision. The parties will then be expected to put that into a suitable Court order to submit to the Court for approval. The Court has the ultimate jurisdiction for enforceable orders, but it is highly likely that they endorse award and determinations made under these schemes, and particularly following endorsement of IFLA arbitrations by Presidents of the Family Division of the High Court.
Many people are wary about arbitration as an alternative to Court, frequently because they are concerned about the inability to appeal a decision they do not agree with. What parties to arbitrations generally understand is that they are contracting to have the person they think is suitable to decide make a decision for them where they cannot make that decision between them. Often it is the case that people acting pragmatically desire certainty of an outcome which they will then make work, rather than try to achieve the specific decision that a specific individual seeks, and will go to any end to achieve. Arbitration provides for that certainty of outcome.
The benefits of arbitration are that decisions can be made swiftly at reasonable expense and with timeframes for hearings that suit the parties rather than the Courts. They are confidential, save for where safeguarding issues arise, and can be carried out in a venue suitable to the parties and to the arbitrator, rather than in a space shared with others. Arbitration is not only an option for the wealthy and there are arbitrators at all levels of experience who can manage particular levels of dispute. Of course, the parties are able to choose their tribunal and can find the person they consider is most likely to provide a decision suitable for them.
Arbitration is an excellent tool in alternatives to Court. It is used in so many commercial contexts, both for small issues and on internationally large scales. It is now available to individuals to determine their personal disputes. Parties and their legal advisers could do far worse than to consider arbitration as a method to resolve their disputes.
This article was written by Helen Brander, if you would like any further information on Helen’s practice or have any other queries in relation to Family Law Arbitration or remote hearings please contact Sean Gentleman or James Collier through our switchboard 020 7353 0711 or via email.