The advantages and disadvantages of arbitration in divorce

By Vanessa Lloyd Platt
Lloyd Platt & Co

With the cost-of-living crisis impacting families financially in a way that we have not seen since the financial difficulties of 2008, most matrimonial practitioners are coming up with different ideas of how to help parties avoid overwhelming legal expenses in divorce.

One method that is growing in popularity is that of arbitration in divorce. Many clients have asked whether this is something that is available in England and Wales and what the advantages and disadvantages may be in utilising arbitration instead of the Court process.

The Process

What is little understood is how the process works and what is involved. Arbitration is a method of dealing with a divorce in a private way where both you and your partner appoint an arbitrator. The costs of the arbitration are met between both parties equally in most cases. After a full hearing before the arbitrator, they will make a decision which both parties have to sign up to be binding upon both of you.

The advantages of arbitration

  • a) Speed: the issues can be dealt with quite quickly and certainly arbitrators are more available than Judges to hear arbitrations. This means that the hearing or final hearing date can be arranged at a date that suits both you and your partner and the arbitrator and this often can be listed much earlier than the sometimes six months wait for court hearings.
  • b) Flexibility: you, your partner and the arbitrator can choose the date. Whereas with a Court hearing often you have no choice as to the timing, the date or venue, with arbitration, the venue can be chosen by the parties and the arbitrator. It quite often can either take place in a barristers’ chambers or other venue that is relaxed and more casual than a courtroom, leaving far longer for the hearing to take place, reducing stress generally.
  • c) Choice of Arbitrator: your lawyer will assist you in choosing the arbitrator who can be from a panel of solicitors; they must be registered arbitrators, a Judge or a Barrister. This means that you can choose someone who is an expert in matrimonial law.
  • d) Specific issue: arbitration can be very flexible in that you can ask an arbitrator to decide on one issue, but not necessarily everything involved in your matrimonial case. For example, you can ask an arbitrator to simply deal with children’s matters or can ask them to deal with children’s matters and financial matters at the same time. Alternatively, if you agree on all the issues save for one small matter, you can ask the arbitrator to decide on this single matter.
  • e) Paper decision: sometimes you can choose to have your case decided on paper without the need for a hearing at all. An arbitrator can be simply asked to provide a written decision and not hear all the evidence as with a final hearing. These are of course unusual.
  • f) Confidentiality: unlike court hearings (which can be open to the media unless a specific application is made to bar the media), the parties can enter into an agreement to keep all the documents, issues and matters and the decision of the arbitrator totally confidential. This is why many in the public eye are choosing arbitration over court hearings which might expose their financial position.

The disadvantages of arbitration

  • a) Third party evidence: in a normal case, if evidence is required from a third party such as a bank, employer, or new partner, they can be summoned to provide documentation to assist the Court. Arbitrators have no power over third parties and therefore some believe that there is an area of evidence that may not be provided. However, if both parties agree to submit to arbitration normally this kind of evidence will be provided voluntarily.
  • b) Costs: parties through the normal court process do not have to be paid for by members of the public. Arbitrators and the cost of a venue (depending on its location) must be paid for jointly by the parties. Of course, agreement can be reached that only one party will pay for the arbitrator, but it is an additional cost which can vary between £6,000 – £7,000 or more if there is a hearing that goes on for several days.
  • c) Is your partner being honest?: arbitration does not provide for court orders to produce information if a party believes that their partner is not providing full disclosure. If you believe that there are substantial hidden assets, then arbitration may not be suitable for this process.
  • d) Family arbitration can be used for disputes between cohabitees, i.e. people who are living together but unmarried, child maintenance, financial claims in divorce and financial claims for civil partnerships being dissolved.
  • e) Specific issues such as disagreements with whom the children should live or how often they should be seen by the absence partner.

Due to delays in court hearings, it is the job of Lloyd Platt & Co to discuss with every client any and all possibilities to deal with their matrimonial case which can include mediation, voluntary disclosure, applications to Court, arbitration or private financial dispute resolution hearings i.e. without prejudice hearings where judges can give an opinion as to how the case should settle. It is vital that you are advised about all these options before moving forward in your divorce.

If you want to discuss any aspect of divorce and separation, please fill in our form below, call us on 0208 343 2998 or click to contact our divorce lawyers in London.

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