Family Law arbitration is not always the answer

A recent article in Melbourne newspaper The Herald-Sun (Divorcing couples using private arbitration to bypass strained family court system) suggested that DIY Divorces are  being used to ‘bypass punishing waiting queues in excess of three years in the nation’s “broken” family law system’.

However, the arbitration process is not a solution to all property settlements as a part of the separation and divorce process. Our Family Law  Team has taken a look at the pros and cons of arbitration in Family Law situations.

What is arbitration?

Arbitration is a alternative dispute resolution process, which occurs outside of a Court setting, where parties present their case to an independent and neutral Arbitrator to make a determination on an issue in dispute. In a Family Law context, arbitration is limited to financial matters and cannot be used for parenting disputes. The types of financial matters an Arbitrator can determine are property settlements, spousal maintenance or disputes about financial agreements.

Why use arbitration in your family law matter?

The Family Court and the Federal Circuit Court are under enormous case load pressure meaning there are current delays to getting to a final trial. Although most Family Law matters never reach a final trial and are resolved.

Arbitration provides a good alternate option to clients who wish to resolve their property settlement quickly and in a cost effective way. In a Family Law context, arbitration is mostly suited to simple matters, which involve modest asset pools.

Some further advantages of arbitration include the following:

  • Arbitration may result in a quicker determination than a hearing at Court. By resolving family law matters efficiently, parties can move on with their lives and focus on providing for their own futures and/or caring for their children.
  • Parties can jointly choose their Arbitrator based on their individual needs and issues in dispute.
  • It is a consensual process where parties reach an agreement between themselves. Parties also have a higher level of control over the process and the degree of formality.
  • By designing the arbitration process, parties can often avoid the costly formalities of Court processes.

What are the disadvantages?

While we understand that some clients may find private arbitration to be an attractive alternative dispute resolution process, there are many Family Law disputes that are not appropriate for such a process.

In determining whether a family law dispute is appropriate for arbitration, you must take into account the possible disadvantages. These include the following:

  • Arbitrations have a limited right to appeal. This means a party who is aggrieved by the arbitrator’s decision may have no recourse.
  • Many Family Law matters have the tendency to become more complex than first perceived. In these circumstances, it is more appropriate for a judicial officer with greater experience and knowledge to hear and determine the matter.
  • In a private arbitration, one party’s ability to negotiate freely may be affected by a number of different factors. These may include family violence concerns, power imbalances and controlling behaviours.
  • Parties often become entrenched in their Family Law conflicts. In these circumstances, the matter should not go to a private arbitration, rather the issues would be better ventilated at Court.

If you are considering a private arbitration it is important to consider the above and to be aware that it is not a ‘one size fits all’ process. It is crucial to seek advice from a lawyer in relation to your individual circumstances and needs.