Can I attend arbitration to deal with finances on divorce? BLM answers
In the run up to the festive period, BLM's Private Wealth practice is sharing a series of blogs demystifying elements of the legal process impacting individuals and families seeking legal remedies.
In #12DaysOfChristmas #12DaysOfFamilyLaw series, we’ve discussed the cost of divorce, but as it’s the season of goodwill, it’s worth flagging that there are alternatives to court proceedings.
Maybe it’s time to consider whether arbitration might be suitable for you and your spouse to deal with finances on divorce?
What is Arbitration?
Arbitration is an alternative dispute resolution procedure that can be used instead of court proceedings or alongside court proceedings to deal with finances on divorce. It is a fairly new concept in family law, having been launched by the Institute of Family Law Arbitrators (IFLA) in February 2012.
You and your spouse will need to enter into an official agreement to arbitrate. This agreement is binding, meaning that you cannot back out of arbitration unless you both agree to do so.
Appointing an Arbitrator
You and your spouse will need to appoint an arbitrator and in particular, an arbitrator who has experience in dealing with finances on divorce. You may also want to appoint an arbitrator who has niche specialisms depending on the facts of your case, for example, an arbitrator who has experience in dealing with multiple and substantial pension pots or an arbitrator who has experience in dealing with international businesses and business assets. If you and your spouse are unsure of who to appoint, your respective solicitors can recommend arbitrators they have used before or who have been recommended to them. If you and your spouse still cannot agree on an arbitrator, the IFLA will nominate an appropriate arbitrator from its panel.
Putting a stay on court proceedings
If court proceedings have been commenced, your respective solicitors will need to write to the court seeking permission to ‘stay’ the proceedings pending the outcome of arbitration. They will need to send the court the signed arbitration agreement and a document known as a consent order. The court will then grant a stay.
The arbitrator will tell you and your spouse what needs to happen before a final decision can be made. In particular, the arbitrator will ask you to provide each other and them with information or documents in a specified manner or within a specified time. For example, the arbitrator will ask you to complete a statement of your financial position using a document called ‘Form E’. After you exchange Forms E, the arbitrator will ask you to draft a questionnaire raising any questions you would like your spouse to answer and requesting any relevant documents you require. After you exchange questionnaires, the arbitrator will consider which questions need to be answered. The arbitrator will also consider whether any properties, pensions, businesses and so forth need to be valued and the logistics of getting this done.
The arbitrator’s final decision is called an ‘award’. Once the Arbitrator has all of the necessary information to make an award, he or she will do so within a reasonable time. You and your spouse will be bound to this award and it is intended to be final.
In terms of next steps, and as a matter of good practice, your respective solicitors should place the terms of the award in a consent order and send this to the court for approval. Having a court order provides you both with an extra level of security; if your spouse breaches the court order, your solicitor can enforce its terms more easily.
Advantages of Arbitration
Among other advantages, arbitration is flexible and can be tailored to your needs and calendar. The date and time of the arbitration can be chosen by you, unlike in court proceedings where a court sets the date and time documents are to be exchanged and hearings are to take place.
You and your spouse can choose the arbitrator and this arbitrator stays with you throughout the process, unlike in court proceedings where you cannot choose what judge you will get on the day and that judge often changes from hearing to hearing. Similarly, you and your spouse can choose a specialist arbitrator who has experience in dealing with finances on divorce, unlike in court proceedings where there is no guarantee that the judge you will get on the day will have the same knowledge or experience.
The arbitrator’s Award is binding and there are very limited basis’ for raising a challenge or appeal. Arbitration is also often much quicker than court proceedings, especially given the delays and backlog the court is presently dealing with. The more streamlined and quicker the process, the more likely it is that you will save costs.
Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.