Arbitration award appeals – a welcome change in family law?

A recent breakthrough in family arbitration, following the outcome of the Haley v Haley case, means an award can now be appealed if certain criteria is met. This development is welcome news for many divorcing couples, as historically arbitration award appeals rarely succeeded. Will this recent change see a rise in popularity for arbitration to resolve financial settlements in divorce?

What is family arbitration?

Arbitration is a type of dispute resolution which takes place in a private setting. The parties enter into an agreement to appoint a suitably qualified person, known as an arbitrator, to adjudicate a dispute about finances or children. An arbitrator is not a judge, but a qualified barrister or solicitor who has undergone the relevant training for the role.

The arbitrator will make a decision that will be final and legally binding. The decision made is called an award (finances) or a determination (children).

Why is arbitration a popular alternative to going to court?

Arbitration is often seen an attractive alternative to court because:

• It’s much quicker than going to court due to a significant back log of court cases.
• You choose the independent expert (arbitrator) who is best suited to your situation.
• The same arbitrator deals with all steps in your case from start to finish.
• You can limit the arbitrator’s decision to address only those issues in dispute.
• Takes place in a less formal setting.

However, many have been put off arbitration as the award could not be appealed. Many feared they would be stuck with a decision they could not live with but have no recourse to challenge this.

Haley v Haley

A week before their final hearing was due, the divorcing couple were told that there was no judge available to hear their case and no alternative date was given.

To move forward, they chose to use arbitration which took place on the same day as the original final hearing date.  Mr Haley felt the decision was unfair so he made an application to the court to challenge the award. This was unsuccessful and the matter was heard by the Court of Appeal.

Before this case, to challenge an arbitration award the wronged party had to show that

• the arbitrator lacked jurisdiction, or
• there was serious irregularity, or
• the award was “obviously” wrong on a question of law.

This differs from a family court order, which can be appealed if the order was wrong or unjust because of a serious procedural or other irregularity, a far less stringent test than an arbitration appeal.

In Haley v Haley, the Court of Appeal held that the family appeal test should also apply to arbitral awards.

How does this impact family arbitration?

Arbitration continues to be a quicker and tailored process in comparison to going to court. It also allows privacy for high profile cases which may have media interest. However, there is concern that the new arbitration appeal test may lose the privacy element that it originally offered when the appeal enters the court process.

If you need further advice on the above, please contact Natalie Lester or a member of our family team.