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Is Arbitration a good way to reach a Divorce Settlement?

There are now a number of alternative dispute resolution paths that can be considered to avoid the time, cost and stress of resolving issues in the court room. Where there is a high degree of co-operation mediation or collaborative law may work for some divorcing couples. However, if the two parties involved are unable to reach an agreement on financial or children matters, arbitration can be a timely and cost-effective way to reach a divorce settlement without going to court.

Arbitration is a process in which the parties agree to appoint an arbitrator, who is a suitably qualified person (usually an experienced family lawyer or retired judge), to decide their case in the same way that a judge would do at court. The arbitrator’s decision is binding on the parties in the same way as a Court Order, with very limited grounds for appeal. Arbitration can be used to resolve financial, and children matters. Most importantly, it can lead to such matters being resolved within a matter of weeks, rather than many months as you would expect in court proceedings.

Arbitration is perhaps most appropriate for cases where there is a degree of co-operation between the parties, but where a settlement is unlikely to be reached without a final decision being made for the parties on one or more issues.  Arbitration is less likely to be appropriate where there are concerns about one party hiding assets, or where there are third parties who need to give evidence.

The main advantages of arbitration include:

  • The parties get to choose the decision maker from a panel of arbitrators, rather than having a decision-maker appointed for them. They can also choose the date and time of any hearings.
  • The parties can ensure that there is continuity, with the same arbitrator dealing with the case from start to finish.
  • The parties have greater control as to the procedure to be followed, such as what evidence is required. The parties can also decide whether they want all matters to be dealt with by the arbitrator, or whether they simply want a few distinct issues determined.
  • Arbitration is a confidential process, which can be very beneficial to high profile parties who are concerned about the media reporting on the dispute.
  • Arbitration can proceed far more quickly than court proceedings, leading to a swift conclusion and avoiding unnecessary delays.
  • Although the parties have to pay for the arbitrator, given the ability to adapt the procedure, limit the issues and reduce delays, there can be a significant cost savings over court proceedings.
  • The arbitrator will be solely focused on your case, as opposed to having other cases to deal with on the same day as well.
  • Arbitration tends to be a more informal process than court, which can make it less stressful.

The main disadvantages of arbitration include:

  • The need for the parties to cover the costs of the arbitrator as well as any venue hire.
  • The arbitrator has no power over third parties and so cannot order disclosure of evidence from them or order them to attend a hearing to give evidence.
  • If there are concerns about one party hiding assets or refusing to provide evidence, then court proceedings may be more appropriate. Orders for disclosure can then be obtained with the threat of contempt of court proceedings, if such Orders are not complied with. The arbitrator does not have such powers.
  • There are very limited grounds for appeal in relation to arbitration decisions. While this is to ensure that arbitration decisions are binding and give both parties finality, it does mean that there is usually no real means to challenge the decision if it appears unfair to you.

As the circumstances of each case are different, we would recommend seeking early advice from a family solicitor, so that the various options can be discussed with a view to deciding whether arbitration is the best way forward for you.

 

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