Mackrell Turner Garrett

National Lawyers, Internationally

 

Arbitration/ Non-court Dispute Resolution

 
 
 
White Collar Crime
 

There has been an increasing focus on settling family matters outside of the Court arena in England and Wales. Since February 2012 it has been possible to resolve family financial disputes (not those related to children) through arbitration, a system run by the Institute of Family Law Arbitrators. However, following recent judicial comment, the concept has recently gathered steam and looks set to become increasingly popular.

The number of trained arbitrators is rising and an increasing number of lawyers are deciding to train, probably expecting something of a shift in the forum of choice for family dispute resolution. The benefits derive from the control and flexibility of the process, both of which are placed firmly in the hands of the parties and their legal advisors. The parties can decide how much disclosure they need from one another, how much time they will need to collect the documents together and which issues that they want the arbitrator to decide on before indicating the award. They can also be sure of having the same tribunal for each hearing ensuring continuity so often lacking, especially at the Central Family Court in London. All in all it is inherently more predictable.

It is still the case that any award decided upon will need to be “approved” by the court but the process of doing this has been clarified and simplified following comments from Munby P, President of the Family Division in the case of S v S [2014] EWHC 7 (Fam). This process is that a consent order will be lodged with the court and, unless there is serious irregularity, a point of law applies, there is material non-disclosure or a Barder event (a serious intervening event that undermines the basis of the consent order); the court will be expected to make an order in the terms of the arbitration award. The guidance is firmly that these awards should be approved by the court. If one party is reluctant to sign a consent order in the terms of the arbitration award and goes on to issue proceedings, the other party is encouraged to immediately make an application for a hearing for notice to show cause why an order should not be made in the terms of the arbitration award. Unless one of the above factors is present, the court is likely to hold that the parties should be held to the arbitration award and there are likely to be costs consequences for the party that decided to renege.

Aside from arbitration there has been a more general focus on non-court resolution. Under the Family Procedure Rules 2010 there is an ongoing duty to the court to consider whether non-court dispute resolution is appropriate. This could include mediation or other method considered appropriate by the Judge. Following the case of Rubin v Rubin (2014) EWHC 611(Fam) it has been made clear that one party can get an order that the other pay their costs of taking the matter to arbitration. This means impecuniosity on the part of one of the parties need not be a barrier to accessing dispute resolution outside of the courts.

In recently reported cases, judges have put considerable pressure on the parties to take mediation seriously and punished one party in costs if their approach is thought not to have been reasonable when they come back before the court.

Clearly, some cases will still need the “old-fashioned” approach; however the message is very clear: the parties must consider at all times whether they need to be in the court arena or whether there might be another way of settling the matter. This will be in the forefront of the Judge’s mind and they can punish one party in costs if they do not take alternative methods seriously.