Family Arbitration in Divorce

Court is not the only way to settle a divorce. If you and your ex-partner cannot agree on money or arrangements for the children, but the thought of a contested court hearing fills you with dread, family arbitration may be a better route.

Arbitration lets you appoint a qualified specialist to decide the issue for you, in private, at a time and place you both choose. The decision is binding. Unlike court, you are not queuing for a hearing date months away in front of a judge you have never met.

This guide explains how family arbitration works in England and Wales, what it costs, how it differs from mediation, and how to tell whether it suits your situation.

What is family arbitration?

Family arbitration is a private way of resolving a family dispute without going to court.

You and your ex-partner agree to appoint an arbitrator, an experienced family lawyer with specialist training, who hears both sides and makes a decision. In financial cases that decision is called an award. In cases about children it is called a determination.

You both agree in advance to be bound by whatever the arbitrator decides. That is the key difference from mediation, and the reason arbitration gives you certainty.

Arbitration in family cases runs through the Institute of Family Law Arbitrators (IFLA), set up by Resolution, the Family Law Bar Association, the Chartered Institute of Arbitrators and the Centre for Child and Family Law Reform. There are two schemes:

• The Financial Scheme, launched in 2012, covering money and property.
• The Children Scheme, launched in 2016, covering arrangements for children.

Divorce arbitration vs mediation: which is better?

This is the question we are asked most often, and the honest answer is that they do different jobs. Couples may use both.

The short version

Mediation helps you reach your own agreement. Arbitration gets somebody else to decide.

A mediator is neutral. They will not tell you who is right, and they cannot impose an outcome. Their job is to help the two of you find common ground. If you cannot find it, mediation ends without a result.

An arbitrator does the opposite. They listen to both sides and then decide. You do not have to agree with the outcome, and you are bound by it either way.

Side by side

Which should you choose?

Mediation may be attempted first. It is cheaper, less formal, and if it works you have an agreement you both built rather than one imposed on you. You also have to attend a mediation information and assessment meeting (MIAM) before most court applications anyway.

Arbitration makes sense when:

• Mediation has been tried and has broken down.
• Positions are too far apart for negotiation to realistically close the gap.
• There is one specific issue blocking an otherwise agreed settlement.
• You need a decision quickly and cannot wait for a court listing.
• Privacy matters to you.

We have both experienced mediators and a qualified arbitrator in the team, so we can talk you through which is likely to suit your circumstances and help you decide which to suggest to your partner.

If neither feels right, there are other options. See our guide to non-court dispute resolution and our post on early neutral evaluation.

When is arbitration the right choice?

Arbitration tends to work well where:

• You want privacy. Arbitration hearings are private and the media cannot attend. For anyone with a business, a public profile, or simply a strong preference for keeping their finances to themselves, this matters.
• You want to choose who decides. In court you get whichever judge is available, and often a different one at each stage. In arbitration you pick your arbitrator together, and the same person sees the case through from beginning to end.
• Speed matters. Court proceedings frequently run for a year or more. Arbitration can be arranged much more quickly.
• One issue is blocking everything else. If you have agreed on most things but are stuck on the valuation of a business or what to do with a pension, you can arbitrate that single point and settle the rest by agreement.

It is less suitable where there are safeguarding concerns, where one party will not engage or disclose, or where you need an order which the arbitrator has no power to make, such as a freezing injunction.

How family arbitration works, step by step

Step 1: Both of you agree to arbitrate

Arbitration is voluntary. Nobody can force an unwilling ex-partner into it. You both have to sign up.

Step 2: Complete the application form

Form ARB1FS or Form ARB1CS

The application form depends on the scheme:

• Form ARB1FS for financial and property disputes under the Financial Scheme.
• Form ARB1CS for disputes about children under the Children Scheme.

On the form you can either name an arbitrator you have both agreed on, or ask the IFLA to appoint one for you. A directory of accredited arbitrators is available on the IFLA website.

By signing, you both confirm that you will be bound by the arbitrator’s decision, that you will not start or continue court proceedings on the same issue, and that you will give full and frank financial disclosure.

That last point deserves emphasis. Arbitration depends on honest disclosure in exactly the same way court does. Read more in our guide to financial disclosure in divorce.

Take legal advice before you sign. You are giving up your right to have a judge decide, and you should understand what that means before committing.

Step 3: The arbitrator sets the procedure

Once appointed, the arbitrator gives directions about how the case will run and what each of you needs to produce.

The process is flexible. Depending on the issue, the arbitrator might decide:

• On paper alone, with no hearing at all.
• After a short hearing on one narrow point.
• After a full hearing with witnesses and oral argument.

You have a say in this. It is one of the real advantages over court, where the procedure is fixed regardless of how simple or complex your case is.

Step 4: The decision

The arbitrator produces a written decision with reasons.

Step 5: Turning the decision into a court order

In financial cases you will normally apply to the court for an order reflecting the award, usually by submitting an agreed consent order which your solicitor will draft. The court retains its own authority to make financial orders, so this step converts the arbitrator’s award into something enforceable in the ordinary way.

What does family arbitration cost?

There is no single answer, because it depends on the arbitrator’s fees, how the process is run, and how much legal work is needed to prepare.

What we can say:

• The arbitrator’s fee is an extra cost you would not pay in court, where the judge is provided.
• You will usually also pay your own solicitor for preparation and representation.
• Even so, it normally works out cheaper than contested court proceedings, because it is faster and involves fewer hearings.

Costs are generally shared equally between you, though the arbitrator has power to make a different costs order taking account of how each of you has behaved during the process.

For a broader picture, see our page on how much a divorce costs.

Is the arbitrator’s decision binding?

Yes. When you sign the application form you agree to be bound by the outcome.

The courts have been consistently supportive of family arbitration, and an award made under the IFLA scheme is very likely to be endorsed by the court and turned into an order.

That is the point of arbitration, and it is also the reason to think carefully before you start. You are choosing certainty, and certainty cuts both ways. You cannot simply reject the decision because you dislike it.

Can you challenge an arbitration award?

Only in limited circumstances. Arbitration is not designed to give you a second attempt at an argument you lost.

Any application to court to challenge the award must be made within 28 days, after other available routes (set out in the Arbitration Act 1996) have been exhausted.

In practice, challenges are rare and difficult. If you are worried about the possibility of an unfavourable outcome, that is a conversation to have with your solicitor before you agree to arbitrate, not afterwards.

What are the alternatives to arbitration?

Arbitration is one of several ways to resolve a family dispute outside court. The others include:

• Mediation, where a neutral third party helps you reach your own agreement.
• Collaborative law, where both of you and your solicitors commit in writing to reaching a settlement without going to court.
• Private FDR hearings, where you pay a specialist to give an indication of what a court would likely order, which you can then use as a basis for negotiation.
• Early neutral evaluation, a similar non-binding steer on the merits.

Courts increasingly expect couples to have made a genuine attempt at non-court dispute resolution. Our post on a judge ordering parties into NCDR covers how seriously this is now being taken.

How we can help

Our family law team advises on every route out of a separation, from negotiation and mediation through to arbitration and, where it cannot be avoided, court. We have experienced mediators and a qualified family arbitrator in the team, so the advice you get on which process to use is not shaped by the only service we offer.

We can help you decide whether arbitration suits your situation, agree an arbitrator with the other side, prepare your case, represent you through the process, and convert the award into a binding financial settlement.

Call us on 020 7485 8811 or fill in the contact form below.