Arbitration: The Other New Normal
Arbitration has been an option for resolving family law disputes for a number of years now, but so far the uptake has been slow. Amidst the many changes to our lives and legal system during the COVID-19 pandemic was the introduction of the ‘National Arbitration List’ in the Family Court of Australia and Federal Circuit Court of Australia. This means there is now a dedicated Judge in each Court dealing with all family law matters referred to arbitration. The renewed push for litigants to resolve their disputes through arbitration is timely and will likely result in an increased number of cases being referred to arbitration.
What is arbitration?
Arbitration is a private dispute-resolution process available to parties to finalise their case without the need for a final Court hearing.
An arbitration involves a private ‘hearing’ where an appointed decision maker, the ‘arbitrator’, does the job a judge would do at a Court hearing. Arbitrators are usually retired Judges or experienced solicitors or barristers.
An arbitration will proceed much like a Court hearing. Each arbitrator will have their own style, but in the end they have to decide the case in accordance with the Family Law Act 1975, just like a Judge at Court.
However, unlike a Court hearing, an arbitration is totally private. The arbitrator’s reasons will not be published, even in anonymised form, and members of the public cannot stroll in to spectate.
At the arbitration, each party presents their evidence and makes their arguments. When the hearing is finished, the arbitrator comes up with a set of orders and prepares a document setting out in writing the reasons for the orders. The orders and reasons are referred to as the ‘award’. After the award is issued, either or both of the parties can make an application to a Court to ‘register’ the award. The orders included in the award are not enforceable until a Court orders the registration of the award.
A party can object to an award being registered on a fairly wide range of grounds. An award which has already been registered can be reviewed or set aside. There have, however, been few cases where a party has successfully objected to, reviewed or set aside an award.
Arbitration is only available for financial matters, that is, cases about the division of property and/or spousal maintenance. Disputes about children or child support cannot be arbitrated.
A case can only be referred for arbitration if both parties agree. But if you agree to the referral and later change your mind, it is likely the arbitration will go ahead anyway. Even withdrawn consent may not be justification enough to stop the arbitration proceeding.
Not all family law financial cases are suitable for arbitration. If the dispute involves allegations of fraud (against the other spouse and/or a third-party), allegations of criminal conduct or allegations of family violence, arbitration is unlikely to be considered appropriate.
The already notorious delays in the Court system may well be exacerbated as a consequence of the pandemic and arbitration, whilst not a panacea, could be part of the solution. The main advantage of arbitration is that it can achieve a final resolution to your case when negotiations have otherwise failed and without the lengthy wait for a final Court hearing.
So, will we finally witness the arbitration revolution in family law? Only time will tell. For now, it is important to know what you are signing up for when a referral of your case to arbitration is suggested.
