Q&A: Arbitration as an alternative solution to court proceedings

Arbitration has developed as a tool to resolve disputes outside of the court system for financial issues since 2012, and for disputes related to children since 2016. Indeed, there has in recent years been a considerable shift towards encouraging parties to consider pursing NCDR rather than initiating court proceedings.  The Family Procedure Rules were amended in April 2024, and this widened NCDR to methods of dispute resolution beyond mediation. There is also a duty on the court to consider at every stage of the proceedings whether NCDR is appropriate in the circumstances. 

In this article, family and children law associate Louise Bonnici sits down with consultant and in-house arbitrator Fiona Read to get her answers on some frequently asked questions about arbitration and key things to think about when considering this form of NCDR. 

A: Almost everything! One of the benefits of arbitration is that it can be used to resolve  property, financial and or child related disputes - from stand alone issues to the whole case.

In relation to financial matters, arbitrators give what is called an ‘Award’. Arbitration can be pursued to resolve financial and property disputes resulting from a marriage or civil partnership, or cohabitation. As an arbitrator, I am guided by the law and the court’s approach in considering the parties circumstances and needs and arrangements for the future to decide on these matters. Arbitrators deal with a wide range of issues, such as disputes where there is a limited asset base and a requirement for needs to be met, or resolving issues related to complex foreign assets.

In relation to children matters, arbitrators give what is called a ‘Determination’. I have dealt with arbitrations conducted to resolve issues surrounding child maintenance, living arrangements and contact arrangements, and other arrangements such as schooling or holidays. As arbitrators we always prioritise the child’s needs and best interests. 

A: There are many significant advantages to pursuing arbitration as an alternative to engaging in court proceedings.

Notably, the parties agree to jointly appoint an arbitrator to act as their own private ‘judge’. This therefore allows the parties to appoint someone who is a trained specialist in that particular area, and best suits the issues they are facing. Arbitration therefore offers an agree of autonomy which is not available in court proceedings. For example, I have particular expertise in small to big money financial remedy claims, often with a foreign element and so have adjudicated on such issues many times through arbitration.

The parties can decide on specific aspects of dispute they would like an arbitrator to consider. This allows for a more streamlined process, in contrast to the court system, in which many issues will be considered in the round. This makes arbitration far quicker, less costly and more efficient and works especially if parties have reached agreement on many issues and only want the arbitrator to decide on one of two points not agreed.

Another key benefit of arbitration is, unlike other forms of NCDR, the decision made by the arbitrator is legally binding on the parties. This provides parties with a degree of certainty that will not necessarily be achieved within other forms of NCDR. The courts will ratify an arbitration award or determination as if the court gave the judgment and will approve orders that are made up from the award or determination.  It is possible to appeal the outcome of an arbitration through the courts which would be unusual but permitted if the arbitrator made a fundamental error in law or there was some other irregularity in how the award or determination was made. This reassures parties that the arbitration is a fair and objective process.

Parties should also consider the fact that arbitration is a much quicker and more efficient process. An arbitrator can arrange an arbitration hearing at a time convenient to all parties and that could be within a very short time of the appointment of the arbitrator. I once did an arbitration in a week of being appointed. Court proceedings take a long time to be dealt with, due to the combination of contested elements and lack of court funding and judicial availability. We frequently hear of hearings/trials having to be adjourned as there is insufficient court time.  I would recommend anyone in this situation to consider arbitration.

Parties can also take comfort to the fact that the arbitration process is completely private and confidential. The media are not permitted at any meeting and the arbitrator will not give information to any third party without the written consent of both parties. This is not the case when court proceedings are commenced. 

A: Yes - another benefit of arbitration is that it takes place in a more comfortable environment, such as in the arbitrator’s offices. This is opposed to the tense and what can be a very cold environment that many people experience in a court room. This more comfortable setting puts participants at ease to a greater degree, which is more conducive to a better experience and therefore means outcomes are more likely to be reached.

One of the good practices in arbitration is that once evidence at the arbitration is heard the arbitrator does not make a decision immediately and give like in court a judgment.  The arbitrator will reflect on the evidence, decide on the issues and write the award or determination within a short time of the hearing. Parties have time therefore to digest and understand the decision made and the reasons for it.  

A: Whilst arbitration can be a very effective form of dispute resolution for many, it is not suitable for every type of dispute.

For example, arbitration cannot be pursued in relation to issues of the recognition of divorce or foreign marriages. Also, arbitration may not be effective with high conflict people. Some people do not like the fact that a binding decision is imposed on them. I have had experiences before where the individual seeks to resist decisions which do not align with their aims. With such characters, other forms of NCDR may be more likely to work, such as mediation, as it allows the individual to feel they have a greater say in the outcome reached.

Another type of case not suitable for arbitration is where someone is hiding resources and is fundamentally dishonest. Although an arbitrator can make directions for disclosure prior to the arbitration there is no enforcement mechanism unless pursued in tandem with court proceedings.

There is a fee for arbitration. However, it is still considerably less expensive than the cost (both in time and money) of pursing court proceedings and so should be properly considered as an option before a court application is issued.

A: Where parties feel unable to reach a decision jointly, arbitration serves as a form of dispute resolution which avoids the stress and costs of court, but also ensures a binding decision will be instilled. Parties can then apply to court to produce an order recording the terms of the arbitrator’s decision. Once agreed the parties will not normally need to actually attend court in order to receive a binding order. Arbitration therefore provides certainty through a binding decision being made, whilst giving participants the options of avoiding a potentially unpleasant court experience. It is quicker and usually far cheaper than the court process and one that is private. 

A: There are currently considerable time and funding pressures on the courts, which means there are often significant delays to proceedings. Pursuing arbitration can result in a more cost effective and efficient resolution to both financial and children matters.

Our team can advise you about family arbitration and other dispute resolution options, including assisting in identifying a suitable arbitrator and advising you through the process. I am a qualified family arbitrator with the Institute of Chartered Arbitrators, and so would be happy to assist. 

Fiona Read is a consultant and a leading family resolution specialist. She is an accredited mediator trained to meet with children and experienced in hybrid, shuttle, and cross-border mediations. She also practises collaboratively, acts as a family law arbitrator for finance and children matters, and offers FDR and early neutral evaluation to help parties reach their own agreements.

Louise Bonnici is an associate in the family and children team.