Family practitioners are witnessing a growing interest in alternative dispute resolution (ADR) as parties seek ways to progress their divorce at a time when the court system is struggling to cope. In this article, Faith Wylde and Ellie Hampson-Jones consider the alternatives to court proceedings for disputes between divorcing couples.
With the family court system in crisis due to the pandemic and unprecedented demand, the President of the Family Division recently stated that court proceedings should be the last resort for parents in disputes over their children. The same is true of any disputes between divorcing couples, not just in relation to children.
Various forms of ADR are available to divorcing couples that can be preferable to the court process for a number of reasons. ADR can reduce the time it takes to achieve a settlement, offers parties flexibility and control over the process, can save costs and, importantly, reduces stress (an aspect looked at in more detail by Sarah Havers and Tim Carpenter in their article for Mindset). An out-of-court process can also benefit future communication between the parties, which is particularly valuable if there are children in the family who are adversely affected by divorce (as is, sadly, often the case).
Mediation is one of the most popular ways to resolve issues in a divorce. The process usually comprises face-to-face discussions between the parties and a trained independent mediator. It has been adapted during the Covid-19 pandemic to take place remotely via video communication platforms.
The parties can be in separate rooms from one another, if necessary with their lawyers present, in what is known as ‘shuttle mediation’. Various platforms, such as Zoom, facilitate this set up to ensure complete security between the ‘rooms’ so that the parties and their respective legal teams can have confidential conversations.
Mediation can be used to resolve any number of issues between the parties, although usually there are one or two sticking points preventing settlement. Issues often centre around the parties’ financial disclosure, but with the appropriate mediator, even complex financial cases can be resolved out-of-court. Third parties such as tax advisers can also be present at a mediation, which can enable the parties to resolve disclosure issues that in the court process would be resolved at the first hearing (known as the First Appointment).
Even if parties wish to proceed with the court process, they will be required, in most cases, to declare to the court that they have at least considered mediation prior to a party applying for financial relief. This can help start a non-confrontational and constructive dialogue between the parties about finances and encourage them to consider the out-of-court process early on.
Private Financial Dispute Resolution hearings
A private Financial Dispute Resolution (FDR) hearing is a without prejudice hearing at which the parties seek a judge’s advice to negotiate an agreement. A private FDR mirrors an in-court FDR, which is the second hearing in the court process. Doing this in private offers greater flexibility for parties and is advocated as a means of securing resolution during the pandemic.
Sir Nicholas Mostyn, National Lead Judge of the Financial Remedies Courts, in guidance issued at the start of the pandemic, urged that “parties should be encouraged to have their FDRs done privately. Such private FDRs should routinely be done remotely. Most barristers’ chambers and solicitors’ offices have facilities to enable FDRs to be done remotely.”
A private FDR’s benefits are that the parties can select their judge, who will often be an experienced, practicing Queen’s Counsel or a retired High Court judge. They can also choose their venue, which would ordinarily be counsel’s chambers or one of the solicitors’ law firms. In the current circumstances, the parties can participate from the comfort of their own homes, making them feel more comfortable and at ease.
As the parties choose the judge themselves, the judge’s opinion can hold significant weight in facilitating negotiations. This is in contrast to the in-court process where parties can sometimes feel as though they have been allocated a ‘bad’ judge. The judge will also have had more time to read into the case rather than it being one in a list of many that day at court. Consequently, the judge will better understand the issues between the parties and the nuances in the case, which may, in turn, better enable a settlement to be reached. With a private FDR, the parties choose their start time and avoid lengthy delays waiting around to be called, which can further contribute to a settlement being reached at or shortly after the private FDR.
AC v CS  EWFC 34
There has been an increasing trend in parties electing to have a private, rather than court based negotiation hearing. Whilst the negotiation hearing itself is mandatory there has often been a perception that one cannot be compelled to attend a private hearing. This has given some parties leverage in the lead up to a private hearing and a game of ‘cat and mouse’ as to whether or not the day set aside in everyone’s diaries, sometimes months in advance, will go ahead. This “sword of Damocles” has now been taken away by Mr Justice Mostyn’s recent decision in AS and CS.
Mr Justice Mostyn has made it clear that if a party wishes to seek an adjournment of a private FDR, they should do so in the proper form. He has made it clear that the “private FDR system must not be abused” and that “parties cannot expect to be in a better position if they decide to take the private option than if they remain in the court system”.
This judgment will be heartening to clients who can be reassured in the lead up to a private FDR that it should now be harder for the other party to pull out at the last minute without facing the ‘teeth’ that one might have otherwise faced if the hearing had been court based.
The parties, in a similar way to mediation, select a trained arbitrator. The parties enter into an arbitration agreement confirming that they will allow the arbitrator to adjudicate on the issue(s) between them and make a decision. This decision is binding, and at the end of the process the terms will be incorporated into a consent order.
A benefit of arbitration is that specific issues can be adjudicated, which avoids the entire case being referred to court. The parties can, like in the private FDR process, select their arbitrator and venue. This can make for a more comfortable experience for the parties and an outcome that the parties are more likely to consider ‘fair’.
While arbitral awards are binding, they can be challenged if the arbitrator’s award was wrong and led to an unjust outcome. The recent Court of Appeal decision in Haley has lowered the threshold for challenging an arbitral award. The arbitrator’s award must be wrong, not seriously, or obviously wrong, or so wrong that it “leaps off the page” as previously required. This seems to provide wider scope to challenge an arbitral award.
Another benefit of arbitration is that unlike a final hearing in court, the parties have control over the procedure. For example, they may choose whether the arbitrator will decide the issue(s) on paper or whether there will be a hearing with oral evidence. The timetable is also fixed around the parties’ and their legal advisers’ availability rather than being imposed by the court. This can enable a final decision to be reached more quickly than would be achieved through a final hearing.
Similarly to mediation and private FDRs, arbitration can take place remotely. It is an attractive form of ADR for parties to consider during the Covid-19 pandemic as it achieves finality while offering flexibility and control over the process.
Parties should strongly consider ADR as a means of resolving their disputes during Covid-19, particularly in relation to children disputes as encouraged by the President of the Family Division. Many parties already in the court process have seen their hearing dates postponed by many months, and those commencing proceedings are likely to experience even greater delays.
There are a number of forms of ADR which parties should consider. The process selected will depend upon what the parties want to achieve and their individual circumstances. ADR can be used for any issues where there is a desire to reach agreement and avoid litigation. Even where the parties cannot reach agreement and would like a decision to be imposed on them, arbitration offers the finality of the court process but without the additional delay and stress. The out-of-court process offers considerable flexibility, and hybrid options are available. For example, parties may choose to mediate with an arbitration date fixed as a fall back.
Finally, any agreement reached is more likely to be adhered to in the long term if the parties have had input into the process themselves and maintained an element of control in what is already a stressful and uncertain time.
Covid-19 is impacting individuals and companies around the world in an unprecedented way. We have collected insights here to help you navigate the key legal issues you may be facing at this time.
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