Arbitration isn’t a new concept. It has been used successfully in commercial disputes for some time. However, commercial disputes are often funded by a company and not by individual’s earnings after tax. Family disputes are often unexpected and not something that’s been planned for financially or otherwise so costs are a very relevant issue.
We are all aware of the routes of settlement of family disputes. Mediation is available to parties where they have a say in the settlement they want to achieve and they manage their own process or negotiations through their solicitors. The solicitor may be able to offer fixed fees so that you know from the outset what you will have to pay to achieve a settlement. There is of course as a last resort litigation which in some cases is unavoidable but what about arbitration? What are the advantages and disadvantages or is it just a new fad that will not take off?
Family arbitration can be useful in big money disputes or sometimes where there is just one point of law to be decided which is the sticking point in achieving a settlement. Whilst it could be relevant in all cases that cannot be settled by other means it may be too costly for some. It can cover a wide range of disputes both for married and unmarried couples and civil partnerships. It deals primarily with financial claims in life and on death but to date it has not been extended to children disputes.
The advantages that one can see if you can choose your judge and you can control when the hearings are and the speed of the process. It is managed by the parties and not the court. For some it alleviates stress as it is more informal and of course with the advent of media being present it is of course confidential. This is particularly attractive in high profile cases. In big money cases it is likely to be significantly cheaper than the traditional method of pursuing the case through the courts.
Only last month the case of F v F 2012 came before the court. The first point that Mrs Justice Macur commented on was the massive costs of the case and the fact that she did not feel that the parties’ expectations had been managed. She referred to the entourage of lawyers that flanked both parties and clearly in this case it is arguable that the lawyers were the winners not the parties.
This was a complex case which involved a husband who had been married twice before and had grown up children from his first marriage. There was a major disparity in age between the parties and there were dependant children. The husband had settled a family settlement some years earlier and the issues before the court were as follows:
- The treatment of pre-marital wealth
- The treatment of the older children
- The value of the life interests in the former matrimonial home
- The valuation of the shareholdings in the company
- The wife’s maintenance needs
The Court ultimately ordered a clean break and excluded some premarital wealth which was not required to deal with needs. The Shareholders agreement was varied. The reversionary interest in the trust was reversed and not crystallised, the wife was given a lump sum and child maintenance.
Such a case could have been dealt with by a competent arbitrator and the costs would have been far less.
There are a lot of ways of solving disputes and it is important to seek competent legal advice at the outset to see what is most appropriate for you.