To Arbitrate or Not to Arbitrate, that is the question….

Arbitration as an alternative to waiting in long court lists for a judge to decide your matter in the Family Court can be of benefit to clients. They may not have had this suggested as an option for various reasons. It may assist clients if they know what can go wrong whilst languishing in long wait lists awaiting a final hearing.

Many things can go awry whilst waiting for that all important hearing. The pool of assets that you thought you owned may have shifted, whether by market forces, claims against the assets by creditors or others, or by virtue of financial manipulation by your ex or their financial advisers. Your financial prospects may have improved and therefore the needs or maintenance component of your case may have reduced. A relative may have left you their sizable deceased estate and therefore the other party may claim you no longer need as much from your joint pool of assets. Your ex may have declared bankruptcy, either through pure ill fortune or a sinister manipulation of their finances. One of you might have entered into a de facto relationship which is now floundering and the de facto may make a claim against the same pool of assets. Regardless of how you look at it, as it was for Hamlet, delay and family law proceedings does not auger well for those who seek final hearings in the Family Court.

Then there are the costs. The longer a matter is left to languish in a list awaiting a final hearing, it goes without saying that there will be an increase in legal fees. The dispute is still live and whilst a matter is awaiting a hearing, clients remain entangled in the throes of that dispute. They require their lawyers to make or respond to claims. Assets and finances need to be reviewed. Financial Statements must be updated, tax returns done, restraining orders sought to prevent the diminishment of the pool of assets to be ultimately decided upon. All this activity ahead of a final hearing comes at a financial and an emotional cost.

If you were offered a quicker and less expensive means of resolving your property and maintenance disputes, why would you not consider turning to the services of an arbitrator. There are many of us who are trained to determine matters in arbitration. Clients need to be fully informed about the option, the cost, the fact that the determination once made has the same effect as if it were an order of the Court. The grounds for appealing a decision from an arbitration are narrow and appeal can only be brought on a point of law. In this respect a binding arbitration will differ from a decision of a single judge. For some clients, this can be particularly concerning as it will remove an avenue for review if they do not agree with the arbitrator’s decision. In short, it is a narrow and technical basis on which review, or appeal can be initiated.

The downside is that unlike mediation, where the parties are actively involved in the decision making process and ultimately, it is their agreement, an arbitrator imposes an outcome on a separated couple. It is not something they can weigh in on and consider as you would in mediation. You cannot suggest options or alternatives as the case is being ventilated. As with a final hearing, as the client you are a passive observer and not an influencer of the ultimate outcome which is then imposed on your family.

In mediation, clients get to participate more fully in possible outcomes. They can consider, in advance, what the likely negotiations will entail and consequently whether or not they are prepared to resolve their matter in keeping with that range of possible outcomes or what alternatives they want to put to their former spouse.

Arbitration still requires the rigour of financial investigation (discovery) and exchange of financial documents. It requires an exploration of the legal issues and both parties would have to receive considerable legal advice heading into an arbitration. Valuations would need to be obtained or values of assets agreed to. A brief to the arbitrator would be prepared and the parties would need to agree on what basis the arbitrator is engaged and how the arbitration is to proceed, whether it is “on the papers” or like a court hearing with witnesses giving evidence and being cross examined. It is a sobering thought, but I am yet to have a client thank me for “going all the way” to a final hearing with them. That does not mean we haven’t done a great job and got a great result for them. It simply means that absolutely nothing can prepare a client for the cross examination which occurs when they are in the witness box – surely one of the loneliest places on earth. An arbitration, when carefully considered, can avoid both delay and the stress which invariably accompanies a final hearing. Rather than prevaricate, it may be prudent to negotiate to go to arbitrate.

The information in this blog does not constitute legal advice and cannot be relied upon by you. If you require advice specific to your situation you must contact Caroline Counsel Family Lawyers for legal advice. The contents of this blog are relevant as at 7 October 2019.  We recommend you obtain specific advice relevant to you and your family’s situation.

Caroline Counsel is an Accredited Family Law Specialist, Nationally Accredited Mediator and Arbitrator.

Back to News