The Singapore Law Gazette

Arbitration in Family Law

Couples who find themselves in conflict, be it over children or finances, are too often turning to the family courts as their first port of call. This article examines the key benefits of family arbitration as an alternative, from the increased flexibility and certainty to reduced hostility and costs, before looking at the procedural aspects. It concludes that there has been no better time for family lawyers to advocate for arbitration as not just an option, but the better option to court-based resolution.

Introduction

Deciding to separate is often a difficult decision for couples, which can be made even more challenging by the protracted legal battle that can then ensue. The same is true in relation to disputes between parents over their children. In recent years, family arbitration has proven to be a more efficient and cost-effective option when determining family law disputes, removing much of the acrimony exacerbated by the traditional court process. Family law judges and practitioners in England and Wales have encouraged the use of arbitration for resolving family disputes for some time now. Sir Andrew McFarlane, The President of the Family Division of England and Wales, has suggested that up to one fifth of divorces wrongly end up in court when they would be better suited to an alternative, less hostile, form of dispute resolution.¹Sir Andrew McFarlane, Interview with BBC Radio 4, 24 July 2022. Available at: https://www.bbc.co.uk/programmes/p0cnrmtl In relation to children, in an address at a lecture in 2022 he stated, “separating parents, who do not need the court’s protection from abuse, should try almost anything before turning to the Family Court”.²Sir Andrew McFarlane, The Worcestershire High Sherrif’s Lecture 2022 at The University of Worcester, 28 October 2022. Accessible at: https://www.judiciary.uk/speech-by-the-president-of-the-family-division-when-families-fall-apart-do-they-fall-too-easily-into-court/ It is clear that arbitration should no longer be seen as merely an alternative option to the traditional court process, but as a first resort for parties who find themselves in the middle of a family law dispute.

Who is Arbitration for?

Arbitration for family law cases was launched in England and Wales in 2012 with the introduction of the Institute of Family Law Arbitrators (IFLA) financial scheme. The equivalent IFLA scheme for children disputes was to follow in 2016. Over the past decade, arbitration has been introduced in many other jurisdictions across the globe, including the US, Australia, numerous countries across Europe, and, as the readership will be aware, Singapore. Yet other countries such as South Africa are using arbitration informally as a means to arrive at decisions without delay whilst waiting for the system to be fully integrated.

In this jurisdiction, arbitration, while a viable alternative in many family law cases, is not appropriate for all. The most important exception to note is that it is usually not appropriate to arbitrate where there are safeguarding concerns, either in relation to a child who is the subject of the dispute, or concerns surrounding domestic abuse in the family. There is express exclusion of cases involving safeguarding issues under the children’s arbitration scheme in England and Wales, and consideration should be given to the particular guidelines of the individual arbitration schemes in each jurisdiction.

The Benefits – Why Arbitrate?

Avoiding Delay and Reducing Hostility

In January to March 2023, it took on average 47 weeks for private law children cases in England and Wales to reach case closure.³HMRC Family Court Statistics Quarterly: January to March 2023. Available at: https://www.gov.uk/government/statistics/family-court-statistics-quarterly-january-to-march-2023/family-court-statistics-quarterly-january-to-march-2023 For divorce cases, this figure was 64 weeks⁴Ibid. These figures show that parties can be waiting upwards of an entire year for final resolution of their case, a situation that is common across many jurisdictions in the aftermath of the pandemic.

These delays are a frequently cited frustration faced by family court users. The long periods of waiting often serve to dial up tensions between parties, causing them to take entrenched positions as time moves on and shift their emphasis towards evidence-gathering and point-scoring against one another, be it in financial proceedings or a dispute over their children. Family court judges are critical of this retaliatory approach to litigation with Mr Justice Peel commenting in the recent financial remedies case of WC v HC⁵WC v HC (2022) EWFC 22, paragraph 1 that:

“Parties, and their legal advisers, may be under the impression that to describe the other party in pejorative terms, and seek to paint an unfavourable picture, will assist their case. It is high time that parties and their lawyers disabuse themselves of this erroneous notion.”

One of the key aims of the Family Justice Reform Act 2023 passed in Singapore was to reduce this type of acrimony in family proceedings, ensuring fair outcomes without unnecessary added complexity and delay. The legislation served to amend the existing Family Justice Act 2014 to include a new section 11A, disallowing parties from filing further applications and documentation within their existing proceedings without prior approval from the court, where it is believed that the additional documents will impede the expeditious or economical disposal of the matter, or where it will have an adverse effect on the welfare of the child who is the subject of the relevant proceedings.⁶Family Justice Reform Act 2023, s.3 It can be seen how legislating in this way was rightly aimed at a reduction in litigation conduct of the nature described by Peel J in WC v HC.

Collaboration

By its very nature, the arbitration process avoids much of this delay and hostility. Arbitration is inherently collaborative. Co-operation and efficient resolution are at the heart of the process. In a straightforward dispute, a determination can be achieved within four to eight weeks of the arbitrator’s appointment, just a fraction of the time spent engaged in typical court proceedings. For discrete points, this timescale can be even shorter.

Arbitration shifts the focus away from adversarial court proceedings where parties are required to present their opposing cases to the judge or magistrates, and re-frames disputes in a way that allows parties to focus productively on the issues. The parties will be required to make various decisions together, from choosing an experienced arbitrator, to setting a venue and deciding on the issues to be determined. Working together in this way can reduce conflict and hostility and is particularly beneficial when disputes over children arise and there is a need for the co-parenting relationship to endure after separation.

Flexibility and Choice

There is no “one size fits all” approach to arbitration and the flexibility it affords is a valuable aspect of the process. Parties can adopt an entirely bespoke procedure to meet the needs of their individual case. For example, they may choose to engage in an entirely paper-based arbitration, where there is no arbitral hearing, or they may choose to adopt a hybrid procedure combining paper-based elements with a final arbitral hearing.

If proceeding in person, the parties are also able to choose the venue for their arbitration and can choose somewhere private, away from the usual court setting. Often the venue of choice will be the arbitrator’s usual place of work. Selecting a neutral, private and comfortable venue alleviates much of the stress and increased emotion induced by attending court and can help the parties to focus in a more productive way on resolution of the key issues.

The parties are in control of the issues that will be determined by the arbitrator and can use the process to focus on the decisions that matter most to their family. Parties may choose to streamline some of the usual court processes, for example they may choose to only provide limited disclosure to ensure the swift and cost-effective resolution of financial proceedings. Even where a case is not suitable for arbitration and must proceed through the court, it is possible for arbitration to be used to settle interlocutory or isolated disputes, such as the wording of a letter of instruction to a joint expert. Once the issue is resolved in arbitration, the matter is returned to court for a full hearing. It was noted by Moor J in the English case of CM v CM⁷CM v CM (2019) EWFC 16 that where there is a genuine issue between parties as to drafting, this would be “exactly the sort of matter that should be referred to an arbitrator”.⁸Ibid, paragraph 10

Arbitration particularly lends itself to cases with an international element. Parties can elect to conduct a remote arbitration, where the arbitral hearing takes place online. This is particularly useful when the parties may be living in two different countries. Arbitration is equally useful in cases where there is a relocation dispute, with one parent intending to relocate to another country with the parties’ children. It is usually the case that these relocation disputes need to be determined quickly, in order that the child in question is not left in limbo and maintains a sense of stability in their life, for example not having to change schools halfway through a term. The faster timescales of arbitration and the certainty that the matter will be resolved at the chosen time and date mean that arbitration can be a useful tool in relocation cases, provided there are no safeguarding issues involved.

Certainty

Another key benefit of choosing arbitration is the certainty it provides parties. By agreeing to arbitrate a dispute, the parties are agreeing to be bound by the arbitrator’s decision. A clause to this effect will be present in the initial arbitration forms signed by the parties when starting the process.

That is not to say, however, that an arbitration decision cannot ever be challenged. Two key English cases, Haley v Haley⁹Haley v Haley (2020) EWCA Civ 1369 in respect of financial arbitrations, followed by G v G¹⁰G v G (2022) EWFC 151 in respect of children arbitrations have confirmed that the test to appeal an arbitration decision is the very same test that applies in respect of a court order, namely that the decision is “wrong” or “unjust because of a serious procedural or other irregularity”. The possibility to appeal an arbitration decision will vary from jurisdiction to jurisdiction. However, in England and Wales parties are able to agree to arbitration in the knowledge that they have recourse to have the decision reviewed under the supervisory jurisdiction of the court if the decision was wrong or unjust, but also the certainty that all things being well, arbitration will result in final satisfaction of their dispute and the ability to move forward thereafter.

Cost

It is a common misconception that arbitration is an expensive option only available to the very rich. It was confirmed by King LJ in the previously mentioned case of Haley that, “if that ever was the position, it is no more”.¹¹Supra note ix, paragraph 5

The speed and certainty that characterise arbitration mean that it presents a cost-effective alternative to court proceedings. The parties will agree to the arbitrator’s fixed fees at the outset, usually to be shared between them, and are able to decide on the seniority of the arbitrator appointed, with fees corresponding accordingly. Many junior family practitioners are beginning to qualify as arbitrators, resulting in more choice and more affordable fees.

The arbitration process removes many of the financial risks associated with the usual court process. For example a hearing being vacated at short notice, after counsel’s brief fees have been incurred, due to judicial unavailability. Parties can be confident that they will achieve resolution of their issue, having paid the arbitrator and their respective legal representatives’ fees.

The Procedure – How to Arbitrate

It will be clear from the above that, given the bespoke nature, no two arbitrations will proceed in the same way. In addition, each jurisdiction will have its own separate arbitration schemes that will apply accordingly. Generally, however, arbitrations whether on financial matters or children disputes in England and Wales, will comprise the following five stages:

1. Commencement – The parties will agree to arbitration, choose an arbitrator and sign a form confirming their agreement to arbitrate.
2. Appointment – The chosen arbitrator will consider the parties’ agreement to arbitrate form and formally accept the appointment, usually in writing. At this stage, the terms of the arbitration and the arbitrators’ fees will be agreed.
3. Procedural management – The arbitration procedure will be kept under review. The arbitration schemes of a particular jurisdiction may specify general procedures that can be adopted, or parties may opt to devise their own procedure, or instead proceed wholly on paper.
4. Final arbitral hearing – Provided the parties have not opted for a paper-based arbitration, a final hearing of the issues will be held.
5. Decision – At the final stage, the arbitrator will provide a detailed written decision to be shared with the parties. In English arbitration, this is called a “determination” in children disputes and an “award” in financial disputes. After this, it is up to the parties to decide whether to apply to the Court to have the terms of the decision converted into an order.

Conclusion

Parties to family law disputes are too frequently turning to the family court as their first port of call to resolve issues rather than their last resort. Recent research conducted with service users who had been to court in England established that most of them were not aware of the various paths open to them that they could have chosen, because the only option presented was the court-based one. Family practitioners will be all too familiar with the delays, hostility and uncertainty that surrounds court-based resolution. In the aftermath of the Covid-19 pandemic, which has only exacerbated these issues, it is imperative that practitioners provide a new client with the whole menu of dispute resolution options and then where appropriate, advocate for the use of arbitration to settle family disputes not just as an option but the better option for the fast, effective resolution of both financial and children cases.