Arbitration

Family | 11th December 2017

The majority of cases we handle are settled by agreement. Before agreement can be reached, there must be disclosure and this invariably means both parties complete a financial statement (called ‘Form E’) which has various documents attached to support the information given.

It often takes many months before all the right information is available and ‘without prejudice’ proposals can be made to try and settle the division of assets between the parties.

But what happens if, despite genuine efforts from both sides, the gap between the parties seems too big to bridge?

Solicitors who specialise in Family work know how slow the Court process can be. Although a case becomes timetabled, there is little control over which local court hears the case or when appointments before a judge will take place (or even if the case will be heard on that day). As a consequence the majority of Family solicitors encourage their clients to use alternative methods of dispute resolution.

Recently, one of my matters had got to the point of exchanged without prejudice correspondence. The offers showed that the parties were poles apart in what each of them sought by way of settlement. For justifiable reasons, it had taken many months to get a Pensions Report (part of the assets to be divided included a complex array of pensions). Neither of the parties wanted to set foot in Court.  However, the husband’s and wife’s approach to splitting the assets was fundamentally different. During this period, a pressing issue arose regarding how school fees were to be paid. A decision was needed quickly, because of a looming change of school.

Timewise, the impasse became obvious in the late Spring and a decision was required by the end of the August when the school fees for the new school and academic year were due; a Financial application to the Court would have meant that a decision would not be made by the court by August deadline.

As a consequence, I advised my client of the alternatives to Court and the one favoured was Arbitration.

Arbitration is a paid-for, bespoke, binding non-court process. It is similar to using the court but the fundamental difference is that it is tailored to the parties’ requirements. A qualified family lawyer is appointed as the Arbitrator. In my recent case it took only 5 weeks from start to finish, from the first telephone Directions Appointment, to the date of the Final Hearing.  Compare this to the Court process where it would have taken at least 12 weeks to get a First Directions Appointment (where the case is not usually decided) before an unknown judge.  The parties simply did not have the time or inclination to allow their dispute to become a victim of a Court system which, despite the willingness of judges and court staff, is on its knees due to austerity cuts.

In terms of cost, the appointed Arbitrator charged £4,000 plus VAT for the whole process. On the face of it, this might seem like a lot of money.  That fee, however, is split equally between the parties (£2,200 each).  Let’s compare this to the Court process. Experience tells us that costs inevitably increase simply because as time passes there is a need to update financial disclosure. Once you know when your court date is and you attend court at the designated time, you get to see a judge only when s/he is ready to hear your matter – often multiple cases are listed on the same day and time. Parties and their lawyers can be at court all day for only half an hour of judge’s time. Costs rise simply because of the slow grinding wheels of the justice system.

My recent case demonstrates the speed (5 weeks) of getting a decision as compared with the court process that can take from between 4 and 12 months. The “additional” costs were those of the Arbitrator.  I say additional – whilst a direct comparison cannot be given, I genuinely believe that at least the same level of additional legal costs would have been incurred for both parties had it been necessary to deal with the matter through the Court process.

My client’s comment about the process is:

“I believe that arbitration took out much of the heat from the divorce process. It was quicker, less adversarial and potentially cheaper than slinging solicitors’ letters back and forth only for the case to end up in court. Shuttle negotiations mediated by sympathetic and realistic professionals prior to the arbitration itself resolved many of the sticking points.  Divorce is never pleasant but this seemed a much kinder process for both parties; the personal touch won hands down.”

Sometimes there is no option but to go ahead with court proceedings. However, where the parties agree, there are other advantages, not just speed, to the Arbitration process:

  • It is confidential;
  • It is bespoke;
  • The parties decide where and when Hearings take place;
  • The Arbitrator is devoted to that case (and that case only) on the appointed day;
  • There is no hanging around in crowded Court corridors or waiting rooms, having whispered conversations to avoid others hearing your business; and
  • Some issues can be resolved by the Arbitrator by written decision without the need for a Hearing (and the parties given oral evidence), if the parties so wish. In conclusion therefore, whilst Arbitrators charge for their services, it is money well spent and anecdotally a far better experience for clients than the Court process.

In conclusion therefore, whilst Arbitrators charge for their services, it is money well spent and anecdotally a far better experience for clients than the Court process.

 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Vanessa McMurtrie

Partner, Family

Vanessa trained and then qualified as a solicitor in 1991 with Hart Brown working in the Cobham office, family department for a decade. She then worke...