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Marianna Lambrou considers the benefits of family arbitration and recent case law developments.

As a method of non-court dispute resolution, family arbitration is still in its infancy. It was launched in February 2012 and is coming up to its 11th birthday. In that time, there have been huge developments in family arbitration, as it massively accelerated as a form of non-court dispute resolution throughout the Covid-19 lockdowns and has remained an established process option, primarily in financial remedy matters, but moving steadily into children matters (within its permitted remit, as launched in 2016) as well.

Benefits

The benefits of family arbitration, among practitioners, needs no explanation, but the headlines are set out below.

When mediation or negotiations between separated couples have broken down, they recognise that they need a definitive decision, but want to avoid the lengthy time and costs associated with court proceedings. In addition, family arbitration is binding on the parties.

Arbitration is generally more flexible, and parties can tailor it to specific areas of dispute that remain outstanding, having already reached an agreement on other aspects of their case. The parties get to choose their arbitrator, to ensure they have the appropriate specialist who has the time to deal with their matter from start to finish. Within court proceedings, it is often it is the case that parties do not know what judge they are allocated until the eve of a hearing and a judge may be allocated who is not a specialist in that area of law. 

Confidentiality is key, which contrasts greatly with that of court proceedings, and the recent developments in transparency in family law proceedings that go to court. The President of the Family Division set up the Family Court Transparency Information Group, which is looking at aspects such as press attendance and reporting of family cases, media engagement, anonymisation and publication of judgments, and so forth. 

Many clients, understandably, do not want their private lives aired in public and published across news outlets so family arbitration is a far more attractive avenue for them to maintain their privacy, confidentiality and anonymity. 

Arbitration is generally a far speedier process, and the parties are not shackled by the extensive backlogs that often plague the family justice system. Family arbitration can take place anywhere and anytime, provided everyone is available. 

Alongside this speed comes the efficiency and cost. In lengthy court proceedings correspondence may pass back and forth between the legal teams unnecessarily, inflaming matters further. Although there is of course the cost of preparing for the arbitration, including meeting the arbitrator’s fees, the overall process is designed to be more cost-efficient in comparison to litigating through the court process.

The latest statistics, released in December 2022, highlight the scale of this issue. Private children cases are taking an average of 45 weeks (almost a year) to conclude, some take even longer. 

Recent developments

Despite all the benefits listed above, family arbitration is still a relatively new concept. This means that there are aspects of arbitration that are not necessarily clear and transparent for family practitioners, with elements which require clarification only coming to light in practice. In the recent case of G v G [2022] EWFC 151, [2022] All ER (D) 30 (Dec), Peel J was faced with such an issue.

In G v G the applicant sought to challenge an arbitral award made under the arbitration children scheme launched in 2016. In his judgment, Peel J reflected on the position set out in Haley v Haley [2020] EWCA Civ 1369, [2021] 1 FLR 1429 and A v A (arbitration: guidance) [2021] EWHC 1889, [2022] 1 All ER 172, in which the courts gave clear guidance as to the procedure of challenging an arbitral award in the context of financial cases. 

In Haley, the Court of Appeal found that challenging an arbitral award is not confined to the grounds set out in the Arbitration Act 1996, ie a serious irregularity and/or an appeal on a point of law, and that:

• the court also has an independent, statutory duty, to survey the fairness of a financial order sought to implement the award, and
• the court should reference the appeal procedure and approach in the Family Procedure Rules 2010, Pt 30

The party challenging the award being implemented into a financial order needs to ‘show cause’ on paper as to why the terms should not be ordered. If the judge is of the view that there is a ’real prospect of the objecting party succeeding in demonstrating that the arbitral award is wrong‘, then the matter can be set down for a hearing. There will not be a re-hearing, but a review in the usual way expected.

The court therefore considers the test of whether the determination was ’wrong‘ or ’unjust because of a serious procedural or other irregularity‘.

In A v A, the specific procedure was set out clearly by Mostyn J, and summarised by Peel J (at para [4]) in G v G as follows: 

• the challenge to an award should be made by issue of an application in Form D11
• the party challenging the award should submit a skeleton argument not exceeding 20 pages and the party seeking to uphold the award ’may file a short skeleton in response’, and
• the papers should then be placed before a circuit judge to conduct a triage/paper exercise and decide whether the permission to appeal test has been passed, and if it has, directions will then be given for an inter partes hearing and if it does not pass the test, an order will be drawn in the terms of the arbitration award

Essentially, Peel J came to the conclusion that the same principles apply in relation to both financial remedy and children matters, reflecting on para [27] of Haley, where King LJ said that ’it is common ground that in the family context arbitration cannot oust the jurisdiction of the court’, making it clear that she envisaged the same principles applying across family cases generally and not just financial remedy cases. 

Conclusions

As family arbitration is still a relatively new method of non-court dispute resolution, it is unavoidable there will be teething issues and cases will continue to bring to light potentially ambiguous aspects of enforcing or challenging arbitral decisions. This particular uncertainty appears to now be rectified, but there will no doubt be more hurdles to face.

That it has taken some seven years from the introduction of children arbitration for this issue to come before the courts as to a procedural gap demonstrates how family arbitration is still an excellent method of dispute resolution that should be endorsed by family law practitioners, at all stages. The benefits still outweigh potential gaps and the continued increase in the use of family arbitration as a process option, in light of the court delays, is testament to these benefits.

is an associate at Sheridans.