Arbitration is an out-of-court process where the parties appoint an arbitrator effectively to act as a judge and make an award. The award is agreed to be binding between the parties, subject to the family court making the award into an order.
What happens during arbitration?
First, the couple decides that they would like to enter the arbitration process. They then sign what is called the Form ARB1 and send it to the IFLA Administrator. The Form gives the parties the option to nominate their own arbitrator or request that IFLA nominate a family arbitrator.
Upon the appointment of an arbitrator, the parties need to agree the terms of the family arbitration, particularly the nature of the dispute which the arbitrator is asked to preside over, the procedure the arbitration will follow – e.g. should the application largely be dealt with on paper or through witness evidence – and agree the fees and how they will be paid.
The parties will then move on to the arbitration itself. Depending on what the parties agreed in the arbitration agreement, the process may vary. It tends to include a case management meeting to discuss the appointment of expert witnesses and properly establish any issues in dispute. Thereafter, there may be interim hearings leading up to a final meeting whereby an arbitration award will be issued.
The parties will then take the award to the court and ask that it is converted into a court order which completes the proceedings. It is only possible to appeal the arbitration award if there has been a legal error or if there is serious irregularity.
Will I be bound by what I say in arbitration?
Yes – the arbitration award is final and is generally converted into a final court order. The award can be appealed – but only if there has been a legal error or serious irregularity.
Can I use it to settle my matter?
At the moment, arbitration can only be used in family matters concerning finances, property and child maintenance. It cannot be used for the divorce itself, nor in dealing with the child contact arrangements.
- Can be quicker than the court process and is more flexible as the parties involved can control the approach the arbitrator takes and the issues she makes a decision on.
- Can be cheaper than going through the court process: the parties to the arbitration will need to agree a limit on the arbitrator’s fees, perhaps pay for a neutral venue, expert reports and their own solicitor’s legal fees. However, given the speed with which an arbitration can be set up, costs can be saved as the legal process could take a matter of months as opposed to years (in some cases).
- Confidentiality – arbitration is strictly confidential, which makes arbitration an attractive option for couples looking to settle away from the prying public eye.
- Both parties have to be committed to the arbitration process upon signing the arbitration agreement – they will be bound by the arbitration award and this award may only be appealed if there is a legal error or if there is serious irregularity.
- If one party is unhappy with the order then it is difficult to appeal.
- Not suitable in all cases, for example, arbitration cannot be used in child contract arrangements.
- The parties have to pay for the arbitrator’s fees. If they had gone to court there would be court fees to pay but they would not have to pay a specific judge’s fees.
- The arbitrator cannot make the same orders that a judge can make. For example, it is not possible for an arbitrator to make a freezing order. Therefore, if one party is not properly disclosing their assets or there are fears that one party may move assets out of the jurisdiction, then the case may be more suitable for court proceedings.
If you would like to know more about the issues covered in this article, Vardags offers a free consultation to qualifying individuals.
For high net worth and ultra high net worth individuals or their companies, our confidential enquiry line is staffed 24 hours. Call 020 7404 9390 today.