Family law arbitration: a new dawn for ADR?

Family Law|November 30th 2011

Lord Wilson delivered a frank, easy to understand speech last night in London. It was noteworthy because he is the first senior figure in family law to publicly announce the imminent arrival of a new form of financial dispute resolution in family law: arbitration.

Arbitration is well-known and well-used to resolve commercial disputes, but so far it has not been applied to family law (Family Law Week provides some further detail here on how it will work from February 2012).

When applied commercially a suitably qualified arbitrator is nominated by both parties to decide the dispute. The arbitration process is then conducted by the arbitrator, who decides how it is to proceed and ultimately makes a decision that is legally binding on the parties. As Lord Wilson stated yesterday: “In principle…arbitration would be likely to avoid or lessen a number of disadvantages attendant upon proceeding to court, in particular delay and publicity.”

Earlier in his speech he had outlined the reasons why private family law disputes need to go to court at all. He gave five particular reasons: lack of legal advice; wrong legal advice; lack of clarity in the law; a refusal by one party to deal honestly with the other; and emotional reactions which prevent earlier settlement.

He then went on to succinctly outline the five main disadvantages of proceeding to court. He considered these to be: the cost; the delay; the publicity; the uncertainty; and the emotional burden on the parties as they go through the process.

The only out of court opportunities (known to lawyers as Alternative Dispute Resolution, or ADR) currently available to family lawyers are mainly limited to mediation and the collaborative law process, which most family lawyers know has a high failure rate from the beginning. Lord Wilson commended both methods, but in particular mediation, going as far as to say he had toyed with becoming a mediator had he simply retired from the Court of Appeal instead of going up to join the Supreme Court.

However, I think the fascination with both forms of ADR now mostly rests with the professionals who conduct it. ADR has singularly failed to capture the imagination of the public, because there are so many perceived disadvantages which simply cannot be surmounted, no matter how hard one may try or attempt to gloss them over.

I was one of the first ever trained family law mediators in 1995. At that time there were great hopes for mediation that ultimately foundered. My firm last year took on board the Government’s enthusiasm for ADR and decided to give it another go. At considerable expense we trained and set up a separate ADR unit, leaving no doubt that our firm is fully committed to ADR – as are most family lawyers. As a result we now have a number of highly trained mediators and collaborative lawyers within our practice.

The undeniable fact however, is that many of those who choose to instruct our firm do not, at present, have a preference for ADR. They are seeking a litigator in their lawyer and certainty of outcome – and there is no way that these wants can or should be glossed over. Yes by all means we can attempt to settle, but let’s not forget that the public are saying loud and clear that what they actually want is the resolution of their dispute as cheaply and quickly as possible. And ultimately they want legal help to get that resolution if they can’t reach a settlement between themselves.

Their rejection of all the flaws of ADR is not the “fault” of the lawyers. It is more a case of clients opting for what they want and understand.

The principal disadvantages of mediation are that it is manifestly unsuitable in instances: where one party is stronger than the other (e.g. where one party may be threatening and the other party is in fear, or one party is perceived to be stronger in terms of negotiating ability) and so the “full, frank and honest” disclosure required of a court process is not forthcoming; when it can delay resolution of a dispute because there is no requirement to achieve an outcome and one party may simply decide to string the other along and “outgun” them financially.

Furthermore, a failed mediation adds to the overall cost and there is never any certainty of outcome. Even when the couple have reached an agreement it may then be unwound because the truth of one party’s real financial position emerges, or they might have reached an agreement without fully appreciating their position in law – and then having consulted solicitors may change their mind before it is made into a court order. In short, it is far from being a perfect out of court system.

In a “collaborative” process, where lawyers do their best to assist the clients to reach agreement or withdraw from the case, few couples actually understand it and/or are even prepared to give it a try. They again want their lawyer with them for the journey. Otherwise why take care to choose the right lawyer in the first place if they are likely to be lost to the process?

I know of no family lawyer who regards alternative dispute resolution methods as widely successful or even vaguely popular among divorcing couples.

The Government’s enthusiasm for mediation should, I suggest, be taken with a pinch of salt. The removal of legal aid for most people in private family disputes means the Government are bound to push the benefits of alternative processes. In doing so they have ignored all the pitfalls that professionals in the field know of, and that have tempered their own enthusiasm for ADR. And all the enthusiasm in the world can’t make an inherently defective scheme work in great numbers.

Lord Justice Wall, the President of the Family Division, gave a speech of his own last night, which touched upon this subject. He told the Bar Council’s law reform committee that although he was a supporter of ADR, the public funding of mediation would not resolve the problems of the “myriad of unrepresented litigants who will come before the family courts”. He said that a new family justice service, as recommended in the recent Family Justice Review, would be neither practical nor necessary. In many ways his comments showed just how much the current system is creaking and in real need of fresh thinking.

So what of family law arbitration? There is little in the way of literature just yet, but in principle family law arbitration would certainly seem to have all the advantages that other ADR methods lack, and therefore appears to be a highly attractive proposition. To understand how it could work it is worth looking at what currently happens in commercial cases.

Commercial arbitration is to my knowledge swift, private and in many cases considerably cheaper than incurring two sets of legal costs during a protracted court process. Commercial arbitrators impose their own timetable which can short circuit the issues in dispute. Parties to a commercial dispute can have as much or as little legal representation as they choose and hearings take place in more informal settings than a courtroom and are therefore less emotionally burdensome. A major attraction of any commercial arbitration process is that it does have teeth and a legally binding certainty of outcome. The arbitrators who deal with these disputes are also experts in their own particular field. A specific arbitrator can be appointed by agreement between the parties or nominated by the Chartered Institute of Arbitrators. It is therefore in their own interests to have prepared beforehand, which is at odds with many cases held in the courtroom before judges, who are often too pressured to give each case similar standards of care.

Towards the end of his speech Lord Wilson said: “I am glad to learn that rigorous training effected in conjunction with the Institute of Arbitrators is a pre-requisite of a member’s accreditation as an arbitrator”. No doubt we will all learn more about family law arbitration in the coming months as the scheme is rolled out. And given the success of commercial arbitration I would have thought this method of ADR bears all the hallmarks of a potentially highly successful method for resolving financial disputes in divorce.

The founder of Stowe Family Law, Marilyn Stowe is one of Britain’s best known divorce lawyers. She retired from Stowe Family Law in 2017.

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Comments(9)

  1. Judy Park says:

    From my spot here on a beach in Florida I read today’s blog with interest. Firstly I feel we need to drop the ‘Alternative’ from ADR and just name everything Dispute Resolution.
    Then the general public choose which branch fits them.
    I understand your feelings about mediation and share many of them.
    The governments enthusiasm for mediation is a poisoned chalice for professional mediators.
    Those of us who have been around for a while know how difficult mediation can be and how unsuitable it is for the vast majority of people separating.
    BUT there are perhaps 20% (maybe less) of couples who can get through the painful process successfully. Their aim ‘not to make things any worse’
    Mediation can be very useful in child only cases using a variety of mediation models to enable the parents to become successful co parents for the future.
    I think it must be difficult for lawyer mediators with little practical experience, to sell mediation to the clients who telephone your firm for an initial chat.
    If you’ve used Fairy Liquid all your life how do you persuade someone to try Aldi’s own.
    Hey, it’s cheaper, cleans the dishes – a bit alien but does the job………..
    You need passion to sell mediation. The initial assessment meeting with a mediator is the opportunity for the clients to hear about all the different types of dispute resolution and for them to make an informed choice.

  2. Divorce Blogger says:

    I, personally, am in favour of mediation and collaborative law as it could potentially make divorces, custody diputes etc. far less stressful for those involved.

    That said, there are several very good reasons as to why it is not always suitable and it is certainly not a meaningful way to counter the inevitable effects that cuts to legal aid are certain to have to those who require legal redress with regards to family matters.

  3. Family law arbitration: a new dawn for Alternative Dispute Resolution? « Untouched Smile | Care Your Child says:

    […] Family law arbitration: a new dawn for Alternative Dispute Resolution? is a post from: Marilyn Stowe Family Law and Divorce Blog […]

  4. Marilyn Stowe says:

    Thanks both of you for your opinions. I don’t see any problem with removing the ‘A’.
    The reality of mediation however is that absent a VERY decent calibre mediator, a strong party can be present in the mediation all day, but can still refuse to move at all unless it is absolutely on his or her terms and the mediation fails. I know, because I’ve done it for a client, where I was present at a mediation. I made our offer at 9am, told them it was our final offer and despite all the incredulity, we didn’t budge. The mediation failed but a week later the other side settled on our terms.
    Some would say perhaps we could and should have moved but our position was the offer we had made was very fair and that remained our bottom line.
    Others might say the mediation was useful to test the strength of each party’s arguments and learn more about the case. It certainly did that and the other side were convinced and blinked first.
    My overall point is that it doesn’t guarantee an outcome, it doesn’t have teeth and it does favour a stronger party particularly if the mediator isn’t very good.
    Have a great holiday Judy, it’s horrible weather over here and SO dark and miserable!

  5. FD says:

    I can’t claim to any particular expertise, but I’ve some experience with ADR in the employment law setting, and I have to say I have grave doubts about it as a primary means of resolving family law disputes. Mostly along the lines as described above, particularly where there is inequality of position / intimidation at issue between parties, but also due to issues around neutrality – both perceived and actual.
    I also have serious concerns about people who should be litigating being funnelled into arbitration, and processes for remedy if inadequate or unhelpful agreements are prescribed by the arbitrator. I strongly think people need access to legal advice before they agree to be bound by arbitration.

  6. Marilyn Stowe says:

    FD Thanks very much for raising some good points.
    Informed legal advice should be a prerequisite before attempting any form of resolution of a family law financial dispute. Unfortunately many people go ahead blindly, confident in their own abilities lacking detailed knowledge of the law and then when its all over regret what theyve done but by then its too late.
    Arbitration is an alternative to the court process but the same law applies and will be applied. For many couples it will be a faster less complex and cheaper alternative to going through court, they can appear on their own, with a friend or with lawyers as they choose. They can choose their own arbitrator or one can be appointed for them.
    Lord Wilson made it clear that the calibre of the arbitrators will be very important to the success of the scheme and I understand that the names of the appointed family law arbitrators are going to be published on 22nd February 2012 by which time they will all have been fully trained and examined.
    Best wishes
    Marilyn

  7. Carl Gardner says:

    I’ve never got to the bottom of why there aren’t family law arbitrations – but I’ve had the impression they were unlawful, perhaps under a common law rule saved by section 81 of the Arbitration Act 1996.

    If they are lawful, and arbitration agreements in family cases could be enforced by courts, wouldn’t this open the way to the potential enforcement by courts of sharia family rulings?

  8. Marilyn Stowe says:

    Carl
    I have taken this from family barrister Peter Duckworth’s new book which is on the Jordans website:- http://www.jordanpublishing.co.uk/publications/family-law/duckworths-matrimonial-property-and-finance#what-s-new
    “The second, and I think exciting, development is in the growing use of private FDRs and, more recently, the setting up of the Family Law Arbitration Group (‘FLAG’). This body, composed of eminent family lawyers and at least one retired High Court judge, is accredited by the Chartered Institute of Arbitrators and enjoys high-level backing from MoJ, the Family Justice Council, and the professions. It aims to provide a service whereby, in lieu of going to court, parties can pick their own panel arbitrator and set the terms of reference. This will cost money, of course, but is infinitely preferable to marching through the courts at enormous and wholly unpredictable expense. Imagine! Four months, or six at most, from claim to final hearing; no more ‘wild card’ judges; no updating valuations or tactical adjournments; interlocutory applications ad lib; lawyers, valuers and accountants competing to offer their services; and so on. It will be like booking your own surgeon for a private operation, instead of relying on the vagaries of the NHS. Furthermore the end result, a polished arbitrator’s award, will or should prove enforceable through the courts, at home and abroad, with only a limited right to appeal on points of law.”
    Regards
    Marilyn

  9. ObiterJ says:

    Excellent post.

    Arbitration in commercial disputes makes eminent good sense since the parties very often wish the business relationship to continue. Not usually the situation in family law disputes fighting tooth and nail over contact with children etc.

    Even if the arbitration works in a family case – and I am far from saying it will never work – the arbitration “award” would still have to be turned into a court order to bring to bear enforcement powers. Non-compliance with the court order coould only be dealt with by the courts.

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