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.