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Are family arbitrations ‘binding’?

Launch of family arbitration scheme provokes debate about enforceability of awards

The launch by the newly formed Institute of Family Law Arbitrators (IFLA) of a scheme to enable family disputes to be resolved by arbitration has provoked a debate as to whether arbitrators' awards under the scheme can be binding and, if they can be, the extent to which private individuals can submit to schemes, perhaps applying religious law, which impose binding determinations in respect of family disputes.

In answer to the question 'Is an award final and binding?' the IFLA website says:

"Yes, it is agreed to be binding between the parties. Currently family law does not permit parties to make their own arrangements for financial and/or property issues on divorce or separation simply by agreement, without the possibility of court review. The Rules in relation to awards acknowledge this: if the subject matter of the award makes it necessary, the parties are bound to apply to the court for an order in the same or similar terms as the award (see paragraph 6.5 of ARB1). This will usually be necessary.

"Following recent rulings by the courts on pre- and post-nuptial agreements, it is expected that the Courts will generally uphold awards made under the Scheme. An award will be the outcome of an impartial adjudication following a recognised process – supported by the Arbitration Act – whose object is to achieve a fair result. It is expected that Courts will enforce awards made under the Scheme."

Para 6.5 of ARB1 (the application for arbitration) provides:

"If and so far as the subject matter of the award makes it necessary, we will apply to an appropriate court for an order in the same or similar terms as the award or the relevant part of the award. (In this context, 'an appropriate court' means a court which has jurisdiction to make a substantive order in the same or similar terms as the award, whether on primary application or on transfer from another division of the court.) We understand that the court has a discretion as to whether, and in what terms, to make an order and we will take all reasonably necessary steps to see that such an order is made."

Carl Gardner, in The Guardian (What's legal about family arbitration? 23 February 2012) recalls the statement of Jack Straw in 2008, when Minister of Justice, that "arbitration is not a system of dispute resolution that may be used in family cases."

"If," Mr Gardner continues, "family lawyers can .... decide to set up a scheme like this and expect to make arbitration awards binding, why can't others set up their own schemes? What's to stop a religious body doing so, and deciding cases according to religious principles, such as sharia?"

Gillian Douglas, Professor of Law at Cardiff Law School, comments beneath The Guardian article:

"My view would be that they cannot be [binding], and will have to be incorporated into consent orders, in line both with the Supreme Court's approach in Radmacher and the terms of s 34 of the Matrimonial Causes Act 1973."

In response, Grant Howell, partner at the law firm Charles Russell and one of the first group of family lawyers to qualify as an arbitrator with the Chartered Institute of Arbitrators, said:

"Any discussion about the enforceability of family law arbitration awards should take account of three key factors.  First, under the the IFLA Scheme  only the laws of England and Wales apply.  This, therefore, differentiates the Scheme from any other body deciding family law matters according to any foreign law or other principles.  Second, there is a long history in family law of the courts appreciating the advantages of recognising agreements between parties dating back over 30 years to cases like Edgar v Edgar right through to the Supreme Court decision in Radmacher in Autumn 2010.  Third, IFLA arbitrators are experienced family lawyers specifically trained  as arbitrators and subject as such to the professional obligations under not only the Arbitration Act 1996 but also arising from being members of the Chartered Institute of Arbitrators.   As for the scope of the Scheme, this is clearly set out as relating to financial and property disputes arising from family relationships with the question of when a court order is required dictated by the circumstances of the case, whether to dismiss future claims or to share a pension to quote two examples."

Mr Gardner concludes his article:

"If family arbitration is to be accepted there must be clarity from those involved and from government, and reassurance about its legal constraints. What, if any, areas of family law remain incapable of arbitration? In what circumstances must an agreement be approved by a court? And how can we ensure anyone offering family arbitration does so fairly and without discrimination? Only parliament can give real answers."

To read Carl Gardner's article in The Guardian and the comments appended to it, please click here.