Why is it safe to arbitrate?
The Family Court is strongly in support of the parties using Arbitration as a means of alternative dispute resolution (ADR) for financial matters so that cases can reach resolution in a speedier manner. Partner Liz Cowell of the Group’s specialist family and children law practice McAlister Family Law, explains.
18 months into the Covid-19 crisis and practitioners are finding that contested proceedings for financial settlement following a divorce are taking many months, if not years, to resolve.
This is partially because the Family Court is flooded with urgent Children Act cases and applications for protection from domestic violence. These cases are understandably given precedents over financial matters and have increased during the pandemic.
The process itself to obtain financial relief from the court is a one-size-fits-all, the parties having to attend at least two court hearings before the case proceeds to trial, when they find themselves unable to agree a Consent Order.
Due to the overburdened family list, hearings are frequently “bumped” usually for the benefit of urgent Children Act proceedings.
It is the case that the Family Court itself is strongly in support of the parties using Arbitration as a means of alternative dispute resolution (ADR) for financial matters so that cases can reach resolution in a speedier manner. When an arbitration takes place, an award is made by the arbitrator which is then turned into a Consent Order which the court will ratify.
The advantages of using arbitration is that it provides complete privacy, there is consistency, it is a speedier process and although the arbitrator needs to be paid it is cost efficient as there needs to be far less attendance at court and the process can be fine tuned to each and every separate application.
The Family Court’s support for arbitration could not be more clearly set out than in a recent High Court decision of Mr Justice Mostyn A -v- A  EWHC1889 (FAM).
In this case the husband, who had agreed to arbitrate then chose not to be bound by the arbitrator’s decision and tried to get the matter set aside, using an expensive route to appeal to the High Court. He failed. Mr Justice Mostyn set out clearly in his judgment the correct way to pursue a challenge to an award – and he also found for the wife.
Hopefully his decision will help to persuade the parties that the process of arbitration provides closure, and the common excuse of some practitioners – that there is no proper means of appeal – has been finally put to bed.
Mostyn J emphasised a previous High Court decision of Lady Justice King in Hayley -v- Hayley  EWCACIV1369 which confirms that a “challenge to an arbitral award should be dealt with broadly the same way and subject to the same principles as a financial remedy appeal in the Family Court from a District Judge to a Circuit Judge” and that this was how he was going to proceed to deal with the husband’s various applications before him. He helpfully added an Appendix to his judgment which gives clear guidance to practitioners as to how to challenge an Arbitral Award, thus giving practitioners protection before proceeding in this manner.