Arbitration brings finality and certainty, or does it?

Arbitration under the Family Law Arbitration Financial Scheme and the Children Scheme is gaining more and more attention, particularly with court delays running rife, judicial unavailability becoming more common and COVID-19 changing the legal landscape. For these reasons and many more, the tide is changing; there is a noticeable shift towards using arbitration as an effective form of alternative dispute resolution.

Advantages of arbitration

We have previously written a blog about how arbitration works, from commencing arbitration and appointing the arbitrator to the procedure and the award. We have also explored the extension of the Children Arbitration Scheme, as well as the numerous advantages to arbitration.

These advantages include:

  • the flexibility and tailored nature of the process;
  • the ability to give control and continuity to the parties;
  • providing the parties with reassurance that the arbitrator is experienced and prepared;
  • the efficiency and speed of the process;
  • the confidential and private nature of the process and arbitral award;
  • its ability to be all encompassing, allowing an arbitrator to deal with nearly all issues connected with the family breakdown.

Arbitration brings finality and certainty

Another advantage, which is pertinent to this blog, is how arbitration brings finality and certainty; the arbitrator’s award is binding, even where one party is dissatisfied with it. Indeed, at outset of the arbitration process, the parties must sign forms where they expressly agree to be bound by the arbitrator’s decision.

However, an appeal can be made in exceptional circumstances where it can be shown that an arbitrator a) lacked substantive jurisdiction b) there was serious irregularity affecting the award or c) the award was wrong on a question of law.

Appealing an arbitral award

The issue of appealing an arbitral award came to light in the landmark case of Haley v Haley [2020] EWCA Civ 1369. In October 2019, an arbitral award was made by Mr Howard Shaw QC. The husband thought that the award was unfair and made an application to the High Court seeking to appeal it or for the court to decline to make an order and exercise its discretion anew. The High Court dismissed both. The husband appealed to the Court of Appeal.

The Court of Appeal allowed the appeal and ruled unanimously that “the logical approach by which to determine whether the court should decline to make an order in the terms of the award, is by reference to the appeal procedure and the approach found in the FPR 2010’. The court will only substitute its own order ‘if the judge decides that the arbitrator’s award was wrong; not seriously, or obviously wrong, or so wrong that it leaps off the page, but just wrong.”

The consequences of Haley v Haley

Now that parties only have to persuade a court that the award is ‘just wrong’, rather that seriously, obviously or so wrong, will this judgment give more dissatisfied parties the ammunition to appeal an arbitral award? We will need to wait and see.

In our view, the judgment should not be a cause of concern for the majority. Appealing an award certainly does not guarantee that it will be successful and all of the other advantages to arbitration remain in place. In fact, being able to appeal more easily may even serve as an advantage to the process.

All of the above said, it is useful to take heed of King LJ’s comments in the case: "I would emphasise that I do not wish it to be thought that I am in any way undermining the arbitration process … on the contrary, parties must go into arbitration with their eyes open with the understanding that, all other things being equal, the award made at the end of the process will thereafter be incorporated into a consent order.”

If you are impacted by any of the issues highlighted in this blog or would like advice on family matters, click here to speak to a member of BLM’s family law team.

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