Arbitration is a legally recognised method of resolving disputes. Arbitrations are governed by the Arbitration Act 1996. The first step in the process is for the parties to agree who will take the decision to bring their dispute to an end. They enter into a contract with the arbitrator. They can agree, or the arbitrator can decide, the procedure which will be used to enable the decision to be taken. Arbitration is very similar to court proceedings. The same legal principles are used but the procedure and location can be tailor-made to suit the specific case. Click here to find more information on the various levels of service here.

What is Arbitration?

People who are divorcing or separating and have not agreed a financial arrangement appoint an independent expert to decide what the arrangement should be instead of going to court.

Is Arbitration Right For Me?

In truth, it would probably be more sensible to ask when it is that arbitration is not a suitable way to resolve a dispute.

  • Might you able to reach agreement with the other party? If so, arbitration should not be necessary.
  • Why not use mediator? An independent professional who specialises in assisting the parties to reach agreement is usually able to help people to reach their own agreement.  Learn more about mediation HERE.
  • If you are uncomfortable with dealing with the other party directly, why not appoint a solicitor who can negotiate on your behalf? A decision you both agree on is a better solution than having an outsider impose a decision on you.  Learn more about using a solictor HERE.
  • Are you able to trust your opponent to give truthful information to the arbitrator? If not, you are probably better off making an application to court because the court has powers which an arbitrator does not have, up to and including imprisonment, to compel truthful disclosure.
  • Are you able to trust your opponent to deal fairly with assets before the arbitration decision is taken? If not, you may need to obtain a freezing order. Only a court can make such an order, so you will need to issue a court application. However, it is at least theoretically possible that once the assets have been protected by the court, an arbitrator can decide what is to be done with them.
  • Will your opponent agree to an arbitration? If not, a court application is the only option.
  • Will you be able to agree the identity of the arbitrator? If not, you could ask the IFLA to choose an arbitrator for you from their panel.

Who are arbitrators?

Family law arbitrators need to be qualified lawyers. Many of them are also part time judges and have therefore been through the very rigorous selection procedure by which judges are appointed. Many arbitrators are also members of the Chartered Institute Arbitration but this is not essential and it is more important that they should be recognised specialists in family finance litigation. The arbitrators at NFAS are all experienced family law professionals who hold or have held judicial office.

How does the arbitrator reach a decision?

The arbitrator applies exactly the same law as a judge would use in court. This means that the arbitrator will refer to the list of factors set out in section 25 of the Matrimonial Causes Act 1973 and any relevant case law, in just the same way as a judge would.  You can find the government's information about how financial disputes are decided HERE.

The arbitration can be decided in the most straightforward cases simply on the basis of written documents, without anybody needing to attend a hearing at all.  If you are not comfortable with decisions being taken on paper without having your say in person, if the dispute is more complex, or if the arbitrator considers that some face to face discussion is necessary, hearings can take place by video conference or at some mutually convenient location. 

What sort of cases cannot be resolved by arbitration?

Where parties are in major disagreement, it may be impossible to agree the identity of a suitable arbitrator and/or the terms on which the arbitration will operate.

Where one or other party does not trust the other to disclose properly all the financial information which is needed to produce a fair decision, the case will have to go to court because the court has powers, including imprisonment, to force people to provide disclosure.

What are the advantages of using arbitration?

Arbitration can be much quicker. You are not bound to follow a court timetable but the two of you, with the arbitrator, can agree your own timetable. 

You do not have to follow the court procedure in terms of how many hearings take place or what happens at them.

In simple cases, it would even be possible to agree with the arbitrator that the decision is taken after reviewing the paperwork only, with no need for anybody to be present.

In any court application there is an immediate 12 week delay before a judge even looks at the paperwork. Once an arbitrator is appointed, unlike a judge, he/she can get to work immediately, making the whole process much quicker. 

If a hearing or hearings are needed, they can take place somewhere convenient to all the parties rather than at a busy court centre with other people present and limited facilities. They could even take place by video conferencing. 

In arbitration you can agree what documents and information are actually needed rather than being bound to produce all the documents which the Court rules require, even though many of them are not necessary.

How are the costs met?

The normal rule is that each party pays half of the arbitrator’s charges. Depending on how complicated and therefore costly the charges are, there can be the option of stage payments. However, all the arbitrator’s charges need to be paid before the arbitration decision is given to the parties. In effect, the parties are each paying just half the cost of using an experienced professional to decide their disagreement. At the same time, they are avoiding the legal expense of unnecessary paperwork and court hearings.

The parties are entirely free to decide between themselves some other apportionment of costs if they think it appropriate. 

The arbitrator has the power to order one party to pay the other party’s costs but as in all family finance cases, this will be extremely rare and generally only where one party has been guilty of misconduct during the arbitration process or has rejected an open offer which should have been accepted.

Payment is made once the two sides have confirmed that they agree to appoint NFAS as arbitrator and confirm acceptance of the terms of appointment.

How much does it cost?

The cost varies depending on how complicated the decision making process is and how much time the arbitrator spends on it. For a simple arbitration, where the decision is taken based on the documents provided by the parties only and with no need for any kind of hearing, the cost will be in hundreds of pounds. The only other charges which might arise would be the cost of room hire and any travel expenses of the arbitrator. Again, these are divided equally between the parties.

If I arbitrate, will I need to go to court?

The arbitrator’s decision is final and binding. However, to make it enforceable it has to be approved by the court. The procedure for doing this is exactly the same as if agreement had been reached without arbitration. In other words, it is much the same as what happens after mediation. Because the parties have agreed to arbitration, the order is a consent order which reflects the decision which the arbitrator has reached. Online services, such as Wikivorce.com, provide a service at a fixed price for producing the appropriate order and submitting it to court for approval.

What sort of cases are best suited to arbitration?

Where parties have engaged in mediation but have not reached an agreement. Within the mediation they will have completed financial disclosure and narrowed the issues that have to be decided. It is usually quite straightforward to put this to a decision maker for a quick resolution of whatever could not be agreed. Court proceedings, by contrast, take months to begin and require the repetition of disclosure. The hard work done in mediation is largely wasted.

Where parties remain on quite good terms but feel that they want an independent professional to take the decision about what their financial arrangements should be after separation. This is particularly helpful where there are children involved as the parents will be dealing with each other for years to come and their relationship will not have been soured by stressful negotiations concerning money.

When people are able to agree on most things but there are one or two issues that they have not been able to resolve, either between themselves or with the help of solicitors. They do not need the full court enquiry, simply a prompt decision on those few things that have not yet been agreed.

Maintenance variation/review. Where there is an existing maintenance order which one of you believes is now too little or too much, the Court process is cumbersome and costly. A much more streamlined approach through an arbitrator can prevent costs getting out of hand and unnecessary delay in changing the monthly payment to something more suitable.

Children disputes. Limited issues about the care of children can also be arbitrated. Good examples are disputes about which school a child should go to or whether a particular holiday can be taken. Arbitration is especially useful where a decision needs to be taken quickly.  NFAS does not conduct children arbitrations other than finance.  We recommend Hampton Family Arbitration who provide a National Children Arbitration service.  You can find their website here: 

www.hamptonfamilyarbitration.co.uk

What will I gain by arbitrating instead of going to court?

Especially after mediation, arbitration can save a great deal of money for both parties because the work that has already been done does not need to be duplicated or brought up-to-date.

Where parties have used solicitors to provide financial disclosure and attempt to negotiate settlement, there can be a huge cost saving by going to arbitration rather than court because a greatly simplified procedure can be followed.

The dispute can be resolved far more quickly because an arbitrator can be available very soon after the parties have agreed their identity. The arbitration can proceed at the parties’ pace rather than at the court’s pace. With the reduction in the Ministry of Justice’s budget, court delays will almost certainly increase in the foreseeable future, especially given the number of people who are now have to represent themselves.

If you need to have hearings to reach a financial decision, these will take place in a suitable private location. You will save cost because the arbitrator will be dealing with your case and your case alone on that occasion. If you are using a lawyer to assist you, you will not be having to pay them to wait around for your hearing to start.

In potentially high profile disputes, the terms of arbitration include complete confidentiality and your financial negotiations and terms of settlement cannot become public knowledge.

Do I need to use a solicitor for an arbitration?

You do not need to have a solicitor or barrister. However, they can make the process a lot quicker and easier and, more often than not, prove to be money well spent.

  • If you find discussing your case stressful, especially if your opponent is present, having your own lawyer may prove to be invaluable.
  • Because the arbitrator is deciding the case by reference to legal principles, an expert lawyer will most likely be a significant advantage in helping you present your case to the arbitrator.
  • Almost everyone will need qualified legal advice at stages in the process, so that their arguments reflect the relevant law and are supported by evidence.
  • If there is to be an oral hearing, with questioning of witnesses, lawyers are by far the best people to undertake this.

Just as in court proceedings, you can make use of an unqualified friend or advisor. Because the arbitrator sets the rules for the arbitration, it may be possible for your advisor to undertake more of the work than would be possible in court proceedings, if the arbitrator permits.

To learn more about using a solicitor, visit Resolution, the national association for family law specialists by clicking HERE.

What are the alternatives?

Where you think you are able to reach agreement with your former spouse, you could try mediation with a qualified mediator.  Mediations have a proven track record of success - often between 75% and 85% of cases settle with the help of a mediator.  To learn more about mediation or find a mediator local to you, visit the National Family Mediation Service by clicking HERE.  NFMS has no connection with NFAS and is entirely independent.

Family law solicitors are highly experienced in negotiating solutions within the requirements of the relevant law.  They are skilled at advising their clients what can be realistically expected as an outcome and can help them to reach a cost effective agreement.  To learn more about using a solicitor, visit Resolution, the national association for family law specialists by clicking HERE.

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.

Parties and their professional advisers are able to track the progress of the case through its life, 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 an arbitration like?

An arbitration is tailored to fit the particular circumstances of the case.

The NFAS secure online service enables the key stages to be completed remotely and without paperwork. Once the parties have appointed NFAS to arbitrate and uploaded the essential information, the arbitrator will review it and decide what needs to be done to be able to make a decision. There can be a hearing to discuss and decide on the additional steps to be taken, when and by whom. Wherever possible, this will be by phone.

Any necessary documents can be uploaded electronically through the online facility.

If the case can be decided with written arguments only, these too are uploaded and the written decision will be emailed out, usually no later than 28 days after the last written submission has been sent in.

If a hearing is needed for the arbitrator to hear the arguments face to face, this will take place at some suitable conference facility convenient for the parties. The start and finish times will be as suit the parties best. The only additional costs will be the arbitrator's travel and hotel costs where applicable.

If you are using lawyers to guide the process, they can then produce the written order for the court to seal. If not, NFAS can produce one for at fixed additional fee or you can access an independent online service.

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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