Malcolm Martin, partner in the Family team, answers some frequently asked questions about arbitration.
- What is arbitration?
It is a system of private dispute resolution for sorting out financial issues that binds both parties. Over the years it has become very common in business disputes and civil litigation generally but is only now coming into family law work. Proper rules are now in place for family arbitration. I predict that it will become very popular. It has the ability to save a great deal of money and the parties have some input into timing, venue and procedures. The Arbitrator is very experienced in his or her field and makes a decision or “award” as it is known, based on proper evidence and the current law. It has many advantages over other alternatives such as mediation and collaboration as it always produces a result and finality.
- Why is the arbitrator's decision final?
Because, beforehand, the parties have to agree firstly that it is to be final and secondly that it will be converted into a court order (by consent). If one party does not like the award that is hard luck and if they fail to cooperate there is a procedure to get it converted into a court order anyway and then enforced by all the usual methods. Indeed it is envisaged that this sort of application will be “fast-tracked” because courts prefer and want to encourage parties to arbitrate. Unless the parties agree otherwise there is the ability to appeal to a court if the Arbitrator has made a mistake of law, just as happens if a judge was involved.
- I went to small claims court once. Arbitration sounds kind of like that.
It is not at all like that. A small claims court provides justice in a summary way for simpler cases with low figures and is not at all suited to family work. The huge advantage of Arbitration is that it is not at all summary but is in fact very considered, carefully weighing up the issues, having heard from both parties before making an award.
- Who picks the arbitrator?
The parties can decide between them or they can contact the Institute of Family Law Arbitrators (IFLA) or the Chartered Institute of Arbitrators (CIArb) who will make an independent appointment from a specialist panel.
- What is the difference between arbitration and mediation?
An arbitrator is not a mediator but a highly qualified independent third party lawyer who hears from the parties involved and then makes a decision about how to resolve it. Mediation can work well but it may not produce a result. Arbitration always produces a result. In an arbitration both parties can be represented. In mediation they are on their own although usually solicitors are in the background. Ironically the added formality of arbitration and the fact that parties are not expected to represent themselves can make it more attractive.
- How long does arbitration take?
The beauty is that the parties agree a timetable with the Arbitrator. This does mean that every case takes a different time but it is bespoke to each case. It can be far faster than a court.
- Why would parties arbitrate as opposed to mediate or going to court?
It is cheaper and faster than going to court. It may be faster and cheaper than going to mediation (that depends on the number of mediation sessions that may be needed and every case is different) but arbitration always produces a result and parties are not left to themselves. Arbitration cannot deal with child issues.