New Dawn for Arbitration in Divorce Cases

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In a guideline decision, the country’s top family judge has mapped out a template for the family justice system to keep pace with modern advances in alternative dispute resolution and to ensure speedy and cost-effective resolution of financial matters arising from divorce.

The President of the Family Division, Sir James Munby, said that there was a ‘strong policy argument’ in favour of the courts giving swift effect to agreements reached between divorcing couples and to awards made by arbitrators under the Institute of Family Law Arbitrators (IFLA) scheme relating to the division of marital assets.

Laying down a ‘streamlined process’ for such agreements or awards to be converted into formal court orders, he said that divorcees should only be permitted to resile from them if their terms ran contrary to public policy or were subject to some vitiating feature, such as undue pressure or exploitation of a dominant position to secure an unreasonable advantage.

Observing that arbitral awards were, by their nature, ‘even stronger’ than simple agreements reached between the parties, Sir James said that those who sought to depart from their terms would normally be required to ‘show cause’. Where such applications were plainly lacking in merit, the court might take the view that the appropriate remedy was to proceed, ‘without more ado’, to make an order reflecting the award and to provide for its enforcement.

Sir James said that the family courts needed to develop appropriate procedures to deal with new and emerging forms of alternative dispute resolution. The powers exercised by the Commercial Court under the Arbitration Act 1996 should also be available to family judges, including to stay financial remedy proceedings pending the outcome of arbitration, to enforce arbitrators’ peremptory orders and to secure the attendance of witnesses.

A couple with marital assets of between £1.5 and £2 million had submitted to arbitration under the IFLA scheme and had asked the court to approve a consent order in the terms of the arbitrator’s award. Sir James said that he had ‘no hesitation’ in doing so.