The Institute of Family Law Arbitration (IFLA) launched the Financial Arbitration Scheme in April 2012. This enables couples (whether married or unmarried) to have financial disputes which they are unable to resolve by agreement (whether, for example, through mediation or negotiation) determined by a certified arbitrator outside of contested court proceedings.
Since the introduction of the scheme, more than 220 arbitrators have been trained and over 80 financial arbitrations have been concluded. Undoubtedly the success of the scheme has been helped by the ringing endorsements given by the Judiciary. In S v S [2014] EWHC 7 (Fam) the President of the Family Division, Sir James Munby, made it clear that in the absence of any compelling countervailing factors, arbitral awards would be capable of being the 'single magnetic factor of determinative importance'. He indicated that it would only be in the rarest of cases that it would be appropriate for family judges to do anything other than to approve the arbitral award. Subsequently, on 24 November 2015, the President published the Guidance for Practitioners dealing with Arbitration – a sure sign that arbitration is here to stay and is seen by the judiciary as a pivotal way of resolving family disputes in many circumstances.
The benefits of arbitration are clear: it is bespoke – the
couple, their lawyers and the arbitrator agree on how the case will
be handled and the details of the procedure. The proceedings
themselves are less formal, the parties can choose their arbitrator
and indeed often have direct access to that person via emails and
conference calls. Crucially, confidentiality is assured unlike the
Court process. Currently, there are two 'schools of
thought' in relation to privacy in financial proceedings.
Justice Holman is a proponent of openness and transparency. Indeed,
in the case of Fields v Fields [2015] EWHC 1670 (Fam) he
determined that the Court proceedings should be open and there
should be no restrictions on reporting. He knew that the parties
were distressed by the considerable attention the case received in the press and online but he stated that did not override the
importance of transparency. On the other side, the privacy flag is
waved by Justice Mostyn. In the case of SL v SL [2015]
EWHC 2621 he said 'sunshine is said to be one of the best
disinfectants' but 'financial remedy proceedings are
quintessentially private business' and should be protected by
the anonymity principle (see detailed article on court transparency). The debate
continues… It will be interesting to see how this judicial
debate is resolved but one thing is for sure - arbitration is the
best adjudication option if the parties wish to ensure
confidentiality.
The introduction of Children Arbitration this year will be
welcomed. The IFLA Children Scheme will be launched in April 2016
and will provide another way for parents to resolve disputes
regarding their children outside of the court arena. They will be
able to deal with: where their children should live, with whom, how
much time they should spend with the other parent and relocation
internally within England and Wales. The hope is that in opening up
arbitration to children disputes, these difficult and often
emotionally challenging cases will be dealt with more expeditiously
and, together with financial arbitration, provide a much needed
release valve for the congested family Courts so as to free up time
for Judges in the family division to deal more quickly with cases
that remain in the Court system.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.