Arbitration?

Quicker, simpler, cheaper.

Contrary to popular belief, family law professionals are keen to help parties achieve the outcome which is best for them and their families. Costs building is generally something which is inflicted on professionals, not caused by them. Solicitors and mediators can be deeply frustrated by clients strenuously resisting reasonable settlements and insisting on expensive litigation, even where the final outcome is predictable.

Arbitration offers an opportunity to help such parties to minimise the cost, both personal and financial, of failing to settle by negotiation or mediation.

Negotiate - the standard cases

You know the route well. First you work with your opponent's solicitor to exchange relevant financial information. Often you don't waste your client's time and money on Form E and its superfluous supporting documents. You know straightaway that this is a one or two issue case only. Quickly and economically you narrow the argument to its core.

Despite sensible legal advice on at least one side, the clients simply can't be brought to agree. What next? Up until now there was only one alternative; issue Form A. Wait three months or so for the first hearing. Fill the time by preparing all the unnecessary documentation you studiously avoided before, at your client's cost, of course. Attend a first appointment at which nothing constructive takes place. Hope that you'll have a decent judge at the FDR and bad luck if you don't.

Arbitration is by far the better option. If the financial disclosure was good enough for two experienced professionals, it'll be sufficient for a judge. If you know enough about the parties' finances to be able to advise on settlement, a judge will see enough to be able to take a decision. So why wait? Why increase the financial burden on the parties?

Refer to arbitration. With an agreed schedule of financial disclosure, coupled with your written submissions as to the appropriate order, a binding decision can be made in a fraction of the time it would take a court, with much less effort and with far less expense.

NFAS arbitrators are all part time judges -- in other words, exactly the sort of people who would be taking the decisions at court. A key distinction, however, is that they all have a professional background in family finance. At court, of course, you may encounter a judge with little or no experience of the field. In virtually every standard case, a fixed arbitration fee is set at the outset, so the parties know immediately what it will cost and can identify how it will be paid.

Arguably the worst outcome for a solicitor is the client with a limited budget who runs out of money before achieving finality. In a sense, the money expended to date is substantially wasted. If negotiation uses up the majority of the available funds, arbitration can be the simple, cost effective to bring matters to a satisfactory conclusion. Without the need for duplication of disclosure, unnecessary directions appointments or the preparation of standardised pleadings, a quick and economical conclusion can be drawn.

Negotiate - more complex cases

Where a case is less straightforward, with decisions needed at different stages, are there any advantages arbitrating over litigating? As a matter of fact, there are.

For one thing, neither you nor your client needs to spend time in court buildings. The Court Service has not been able to invest in all its estate over a prolonged period and, for many courts, this shows in shabby and uncomfortable premises with inadequate facilities, especially for private conferences. At arbitration, the parties select suitable facilities themselves and then have exclusive use of them.

The arbitrator will have only your case to deal with in a fixed time slot. There is no risk of getting stuck behind a slower case or taking your place in an overloaded list.

When Form A is issued, the Court sets a timetable. In arbitration, the parties can agree their own or ask the arbitrator to set one, devised specifically for their case alone.

In court proceedings, the parties await the convenience of overburdened court staff to accommodate any case management issues. In arbitration, specialist decision makers are available, generally far sooner. In appropriate cases, the parties could agree an expert to determine specific issues, such as business valuations or pension calculations.

After Mediation

Conscientious lawyers refer suitable cases to mediation. Unfortunately, some of them exit the process without settling. In the course of mediation, financial disclosure will have been exchanged, discussions will have taken placed and issues will have been narrowed and defined. Issuing Form A squanders the effort and good faith which led up to that point. A simple referral to arbitration builds on it instead. The hard yards have been run ? all that is left to be done is a decision, based on the disclosure set out, deciding between the competing positions on the now-limited issues.

If your client has come out of mediation without a settlement, the real question is whether there is any reason not to arbitrate?

What cases are best suited to arbitration?

Standard financial remedy cases are ideal. The only ones which really need to be at court are where a freezing order is needed or a penal notice needs to be attached to an order. Of course, even with these, if compliance results, there is no reason why the Court application could not be stated to enable arbitration to take place once you are satisfied that the arbitrator will have all the necessary information to reach a just decision.

Applications to vary maintenance are ideally suited to arbitration, provided the parties give sufficient disclosure. The Court prices for variation is generally needlessly slow and detailed, with the result of disproportionate cost which eliminates any chance of either party being better off at the end of it. Arbitration can bring this back under control.

Limited issue children applications, such as which school a child should attend, or whether a holiday abroad can be taken are also suitable, especially where time is of the essence. However, if a report from CAFCASS will be needed, only a court will do.  NFAS does not provide children mediation but recommends Hampton Family Arbitration.  You can access their website here:

www.hamptonfamilyarbitration.co.uk

TOLATA applications and Inheritance Act applications are also within scope and are directly enforceable as they fall within the civil jurisdiction rather than the family jurisdiction. In other words, there is no need for a separate approval from the court itself.

What disclosure is needed for arbitration?

Whatever is sufficient, is the answer. We trust fellow professionals to exercise their professional judgment as to what will be needed. In many cases, if not most, the arbitrator will not need access to bank statements or other original documents. If the lawyers involved have satisfied themselves that they know the true financial position, there will be no need for the arbitrator to duplicate their efforts. The arbitrator can be supplied with an agreed financial summary, just as might be the case at FDR and that will suffice. If any further information is needed, the arbitrator can ask for it to be supplied.

In more complex cases, disclosure is likely to follow family procedure more closely, but tailored to the individual circumstances of the case. Procedure and timetable can be agreed between the parties if possible, with the arbitrator deciding on any points which cannot be resolved by negotiation.

Courtesy guaranteed

Arbitrators do not come to each case pressured by the competing priorities of a busy list. Their patience has not been tested by frustrations from other litigants. Parties and their representatives can be assured of the levels of patience, tact and courtesy which are needed to minimise the stress which arises from unresolved family disputes.

How does the NFAS system work?

Starting the process and taking it all the way through to a conclusion takes place online.   

All communication with NFAS is automatically copied to both parties so that there can be no suggestion that one side can obtain an unfair advantage over the other by communicating privately with the arbitrator.

The web-based system is designed to keep paperwork an absolute minimum, so that only essential information is used. Documents can be uploaded through the website by being scanned.

Professional clients and the parties themselves are able to track the progress of the case through its life and can see what stage it has reached and what further action is needed to bring it to a conclusion by logging onto the website through a secure portal.

What is a private FDR? What is it for?

A private FDR works in the same way as a court appointed FDR but the parties choose their own judge/arbitrator to give the parties an evaluation of the likely outcome of a trial instead of allowing the court to select the judge.

Why have one? Simply because all judges are not equal. Some are better able to assist parties than others. For the FDR to be effective, the judge needs to give a clear opinion on the issues separating the parties. Sadly, this simply does not happen in all too many cases, even before full time judges. Further, an opinion from a judge whose professional background is in some other discipline is of limited value at best.

Additionally, the arbitrator at a private FDR has only one dispute to deal with, not a full list. As much time as is needed can be devoted to helping the parties settle and save the expense of a trial. Given that the cost of a trial can be as much as the entire case to date, the saving can be huge and completely outweighs the modest additional cost of the arbitrator's fee. Giving an FDR the best possible chance of success by appointing an arbitrator with the right experience, skill set and expertise can make the difference between settlement and the expense of a trial.

In essence, a private FDR adds relatively little cost but delivers potentially maximum benefit, all without delaying or disturbing the ordinary course of litigation. It gives the parties late neutral evaluation as opposed to ENE.

To enquire about booking a private FDR, the cost or any other query, click HERE.

How does the arbitration process work?

The question should really be, what process do you need? As always, to resolve a financial application in accordance with the law requires proper and sufficient disclosure, full argument and a reasoned decision. The FPR give one fixed framework to accomplish this but in reality, it isn't necessarily the best or even needed for every case.

Disclosure: how do you as professionals want to complete it? Forms E are the safe option but are they necessary? Are they actually sufficient? For complex cases the prescribed documents are not enough and for simple cases they can be entirely superfluous. At an early stage the arbitrator can have a hearing to decide the appropriate disclosure process, often by video conference rather than with anyone leaving the office and taking their place in a crowded court waiting room. The hearing can take place as soon as the need for it has been identified. Unlike issuing form A, there is no built in three month delay. Disclosure can be tailored to the exact circumstances of the case.

Full argument: in simple cases there may be only one issue to decide. Do we sell the house now or later? When it sells, will it be an equal split of the proceeds or something different? These can be resolved by written submissions alone, if the parties agree. Where the budget for legal costs is fixed and limited, this can make all the difference between a lawyer guided conclusion and clients being cast adrift part way through the process to do the best they can on their own.

In complex cases, a trial process will follow in the ordinary way. The key differences will be that it takes place in congenial surroundings, selected by the parties and their advisors. The hearing can start and finish at times to suit the parties. In one recent arbitration, this meant the arbitrator starting at 8 am and finishing at 6 pm. An arbitration allows for the trial of specific issues in advance of a private FDR, for instance. Are certain assets owned by one of the parties or not? An arbitrator can take the decision. Contested valuation? An arbitrator can decide.

Taking the standard court process as a model, most arbitrations differ in the following ways:-

Once the decision to arbitrate has been taken and an arbitrator agreed, the arbitrator will review the case summary and disclosure which the parties provide. There is no three month initial delay. If the parties have agreed directions, the arbitrator can approve or amend them. If they are not agreed, the arbitrator can give written directions or can hold a directions hearing, usually by telephone. All of this would normally take place within two or three weeks at most of the arbitration appointment.

If the arbitration is going to be by written submissions only, the parties submit their written arguments and an agreed bundle of documents (electronically). The arbitrator may raise questions of the parties and otherwise will normally give a written award, usually no later than 28 days after the written submissions are complete.

If the arbitration is going to be by an arbitration hearing, a procedure similar to the court system will be followed but usually in a much shorter timescale. The critical point is that the arbitrator reviews the case within days of the appointment being confirmed and relevant documents being uploaded. The arbitrator and representatives work together to devise a timetable suitable for the specific case, including any directions discussions and the timing of the arbitration hearing itself.

Reasoned decision. Arbitration awards are made in writing, in the same way as a reserved judgment. In straightforward cases, it may be possible for the arbitrator to announce the decision at the end of the hearing so as to eliminate the suspense, while delivering the written reasons later.

What parts of the country does NFAS cover?

NFAS covers the whole of England and Wales. Obviously arbitrations decided on written submissions only or by videoconferencing are the easiest to arrange. If an arbitration hearing is required, the arbitrator will come to the location most suitable for the parties. The only additional costs are the arbitrator's travel and overnight accommodation if needed. All arbitrations operate on a fixed price basis so there is no additional charge for travel time.

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Early Neutral Evaluation

ENE is a process by which the parties to a dispute agree to instruct a neutral professional/expert to provide them with an evaluation of their respective positions on the whole of the dispute, or some element or elements of it, before they are actually in a position to proceed to a final resolution.

For example, it could be used to give early direction on a single point, such as whether a pensions report will be needed, or whether a particular asset will be included in a settlement. It can also provide an early view on the range in which overall settlement will be reached. It can take a necessary preliminary decision or set the framework within which negotiations can take place.

What is the purpose of ENE?

ENE is an opportunity for the parties to receive an independent and neutral assessment of what the likely outcomes in their dispute would be if it had to be decided by a judge. Very often parties enter mediation or negotiation with an unrealistic expectation of what they might receive, especially in financial matters. If there is a clear and agreed statement of the parties’ financial positions, adjusting expectations to bring them into an appropriate range can be accomplished by an agreement to seek ENE. After ENE, negotiation can resume with a much improved prospect of agreement being reached because the parties have now received clear guidance as to where a reasonable range of settlement lies.

Who can provide ENE?

Any suitably qualified and experienced legal professional who does not represent either party can supply an ENE. A clear advantage is gained where the professional holds judicial office and actually it takes those decisions in court because this is precisely the sort of person that the parties can expect to encounter if they do not reach agreement.

How is ENE obtained?

NFAS can provide ENE on the basis of written information only, by video conference with the parties or by prearranged meeting. In effect, the parties have the facility to undertake a private FDR outside the court system, with the undivided attention of the evaluator and without the need for the full court procedure to be engaged first.

What does ENE cost?

All NFAS services are provided at fixed-price. Once basic information has been supplied about the parties’ finances and the scope of their disagreement, a fixed price is given, calculated on the basis of how much time is likely to be needed to provide an evaluation and which particular type of delivery is preferred.

How does NFAS provide ENE?

As with arbitrations, booking the service, providing the relevant information and documents and payment is all carried out through a secure online portal. The evaluator is prepared to travel anywhere within England and Wales if a meeting is required but otherwise all communications are online and secure.

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