“At all events, arbitration is more rational, just, and humane than the resort to the sword” - Richard Cobden
My Talking Works series of alternate dispute resolution options in family law and divorce cannot conclude without exploring arbitration and private FDRs. Arbitration sets itself apart from kitchen table, round table and mediation because it is the most similar to litigation. Whilst the first three options encourage dialogue and out-of-court resolution, arbitration is a quasi-court process with not dissimilar rules and regulations to litigation. So why include it here? Because arbitration can only commence if a couple agree to use the process, meaning it remains an option where a degree of goodwill and courtesy must still exist and is also, quite literally, not court.
The problem with court litigation
Court litigation - the good old-fashioned kind - should always be a last resort. It is gruelling, expensive and with no guarantee of predictable outcome. All litigation is a gamble. In my long experience as a divorce litigator, I can reassure you that cases only end up in court for one of two reasons - complexity (of assets or legal issues), or, personality (of one or both parties). I need less fingers to count the complex cases that have gone to final hearing. There will always be cases that cannot avoid litigation but the COVID-19 pandemic has thrown up considerable additional challenges.
Much like a butterfly flapping its wings and starting a hurricane elsewhere, when Patient Zero first coughed and started a pandemic the English court system quietly imploded. The family courts were quick to get cases heard online in virtual courtrooms but none of us were ready for how fast a backlog would build up. Cases that took 12 months to conclude are now taking 18-24 months to finish. Legal papers are mislaid, hundreds of emails to the court go unread and there simple aren’t enough judges to go round. Everyone is doing their very best but the pain is most acutely felt at the client end. Once you’re in it, you’re truly in it and no-one will be able to tell you when it will end. This can have a considerable emotional, financial and practical impact on individuals and prevents life moving on.
Arbitration is often more time efficient
Arbitration offers the benefits of a court system without the present burdens of delay. Arbitrators are usually trained barristers or solicitors who sit as if a judge in the arbitration. Arbitration begins by a couple agreeing to use it as an alternative to court. Arbitration is intended to be binding. There is no fall back of applying to go back into the court system if an arbitration outcome is unpopular and you want a second chance to try and achieve a different outcome at the same stage. You are therefore choosing a process to which you are fully bound. The process follows a similar format to litigation with financial disclosure and legal representation. Directions to move the case forward can be agreed between the parties or directed by the arbitrator. There may be one or more short hearings to ensure all detail is to hand before a longer hearing that will conclude the case.
The benefit of arbitration is that it is time efficient. A case can move through arbitration in three months. Hearing dates can be negotiated to everyone’s availability. The cost of the arbitrator is shared jointly between the parties, or paid by agreement from a joint asset. Arbitration is effectively a private court process and one that offers conclusion and independence for challenging cases far sooner than the court litigation process. Whilst the focus of this article is on financial resolution, arbitration is being increasingly encouraged to resolve children disputes for similar time and cost benefits.
A Financial Dispute Resolution (FDR) hearing may be even quicker
Private FDRs are not dissimilar to arbitration, but don’t have the same binding outcome. Nevertheless, they serve a valuable purpose. A Financial Dispute Resolution hearing is usually the second of three potential hearings in financial proceedings. FDRs are important because at FDR a judge will give a non-binding indication of how the matter ought to settle. It is a heads up, if you like, of what is likely to happen at a Final Hearing. FDR is the client's chance to have a dry-run of their arguments to see if they have merit. The judge’s indication is intended to focus the parties’ minds on what is realistic. About 85% of cases settle at FDR; those that do not will go on to a final hearing for a judge to make a determination. A private FDR speeds up the court timetable and is intended to speed resolution given how many cases settle at FDR. A couple will agree to appoint, and share the cost of, a barrister or solicitor trained to sit as a FDR judge. Dates can be agreed to suit all and the FDR inevitability takes place much earlier than the court can order. Presently, there can be 8-12 month waits between court hearings. There may only be 4-6 weeks to wait for a private FDR. If a case does not settle at FDR it goes back into the court system for the listing of a final hearing.
Arbitration and Private FDRs: Are they worth the cost?
Both arbitration and private FDRs effectively offer a private court process. Whilst there is a legitimate argument that not everyone can afford such a process, if a small sum can be put aside from a joint asset then this is definitely worth considering. Arbitrators and private FDR judges can cost as little as £2,500 plus VAT shared equally between the couple. That is a price many may consider worth paying for early freedom from an unhappy marriage and peace of mind.
