Finding the middle way

Although promoting alternative dispute resolution (ADR) – encompassing mediation, collaborative law, arbitration and private financial dispute resolution – is not a new development in family court hearings, it was given added impetus in April last year. Codified into the Family Procedure Rules and pre-action protocols, parties must now outline their ADR efforts at every hearing. Costs penalties can be imposed, or hearings adjourned if parties refuse ADR or fail to engage with it properly.

ADR is still voluntary, but the recent amendments reflect a growing shift in the culture of family law practice – from litigation and process, to collaboration and an emphasis on outcome. ‘Judges are now more likely to formally record and encourage attempts at ADR, including in High Court orders,’ says Suzanne Todd, head of the London divorce and family team at Withers.

Nevertheless, like GPs, judges are still under pressure to get through the day’s list. That means the time and willpower for pushing ADR on parties can be limited.

Lawyers report that the public’s awareness of ADR is low. There is widespread confusion over the terminology; and the difference between non-binding options such as collaborative law and mediation, and binding options such as arbitration, is poorly understood.

‘Clients are often overwhelmed by the choices available, especially given the emotionally charged nature of family disputes,’ says David Allison, a mediator and director at central London firm Family Law in Partnership who specialises in financial claims on divorce. ‘Lawyers must ensure that they clearly explain all the options and their consequences from the outset.’

Practitioners report that clients can hesitate to pay for an arbitrator or mediator when they perceive the decision of judges to be cost-free. Clients do not realise that protracted court cases can be more expensive overall. Setting out the way costs work up front could make a big difference to the trajectory of the case.

Alison Bull, a Mills & Reeve partner who is also a family mediator and arbitrator, says: ‘Clients often want to have their day in court, because they believe that the judge will agree with their position and justice will be done, but this is rarely the case in practice. It is important that clients understand this.’

What ADR options are available?

Mediation is probably the best-known method for resolving issues between separating couples. Private, confidential and cost-effective, it is highly useful in finding common ground between the parties on child arrangements, financial settlements and property division.

Mediation is non-binding and there is no limit to the number of mediations that can be undertaken. However, one drawback is that it can sometimes be deployed in cases where delay benefits one of the parties – a tactic which can affect other ADR methods too.

An alternative is collaborative law. Here, collaboratively trained lawyers work with a multi-disciplinary team that may include an independent financial adviser, accountant, or child-focused specialist. They guide the client through the legal and emotional complexities to a resolution without going to court. If the case does proceed to court, none of the lawyers involved can represent the parties.

Private financial dispute resolution, meanwhile, involves the appointment of an independent judge to provide an evaluation of the financial issues. The evaluation can then be accepted as it is, or used as a point of negotiation between the parties’ lawyers in further proceedings.

How does arbitration work?

In family law arbitration the parties agree to appoint a neutral figure, the arbitrator – who may be a qualified barrister or solicitor rather than a judge – to resolve their dispute over children or finances instead of going court. Arbitration cannot be mandated by the court, so parties must choose to enter into it of their own volition. If the decision concerns finances it is called an ‘award’; if it concerns children it is a ‘determination’.

Although arbitration can take place in an informal setting of the parties’ choice, such as a hotel room, or a lawyer’s office, it should not be seen as an easier option.

‘Arbitration is a rigorous, binding process akin to court; parties are subject to the same level of evidence and cross-examination as in traditional proceedings,’ stresses Todd.

The outcome of S v S [2014], a decision by the then president of the Family Division Sir James Munby, was important in boosting family law arbitration as a credible alternative to a court judgment. Under English law, parties cannot reach an agreement that excludes the court’s power to make its own orders. Yet in S v S Munby recognised a family law arbitration award, making it highly likely that the courts would endorse such awards and determinations in future.

More recently, Haley v Haley [2020] confirmed that an arbitration decision can be appealed under a wider set of circumstances than previously thought. Before Haley, a challenge could only be launched if the arbitrator lacked jurisdiction, there was serious irregularity, or the award was clearly wrong on a point of law – a rigidity that deterred lawyers from recommending arbitration.

In Haley, a divorcing couple were told that no judge was available to hear their case on the final hearing date, and no alternative date was provided. They chose to have an arbitration on that date instead. Mr Haley felt that the decision was unfair, so made an application to the court to challenge the award. This was unsuccessful and the matter went to the Court of Appeal.

Haley demonstrates that an arbitration decision can be appealed if it is wrong or unjust, or because of a serious procedural or other irregularity – a less stringent test than previously.

The judgment should allay some of the profession’s misgivings that pursuing arbitration could lead to a decision that is irrevocable.

How does arbitration compare to court proceedings?

While parties must pay for the arbitrator and other costs, in many cases arbitration will not end up costing more than going to court, lawyers point out. ‘Despite the need to pay for an arbitrator, it is often cheaper and faster than court proceedings overall for those already paying legal expenses,’ says Allison. ‘During the often lengthy duration of court proceedings, lawyers’ fees stack up and the facts of the case change, requiring more work than a shortened timetable.’

By contrast, most arbitrations can be wrapped up in a few months, providing parties with welcome closure from one of life’s most stressful situations. ‘If it is stated at the start in the arbitrator’s instructions that they also handle the drafting and settlement of the final order, this prevents post-arbitration disputes and refines the process even further,’ says Allison. Clarity in instructing the arbitrator is essential to avoid being forced back to court, he adds.

In high-profile or sensitive cases, arbitration also has the advantage of being conducted in private. Todd says: ‘With the greater transparency of proceedings in the family courts, more clients have been prompted toward the confidentiality offered by arbitration.’

Parties can also flex the proceeding to suit their timetable and preferences, choosing weekends (if the arbitrator is willing) and a lawyer’s office or hotel room in which to conduct proceedings.

‘Courts are now barely fit for purpose,’ declares Carolyn Green, a family law partner at HCR Law in Cheltenham. ‘They are too small, don’t have enough hearing rooms and there is a lack of amenities – you are lucky if they have a drinks machine. In the heat of the summer there is no air conditioning and in the winter they can be freezing cold. Arbitration provides a much more conducive setting for clients to find a resolution.’

Parties can also choose the arbitrator, who will have specific expertise in the matters in hand. In lower-level family courts, which are under-resourced as well as difficult to navigate, with emails and calls unanswered, cases can be allocated to a judge who knows little of family law. That is far from ideal, considering the stress of litigating personal matters. ‘Lay people can easily spot when the judge is not familiar with this area of practice, which does not inspire confidence,’ says Green. Unlike in court, the same arbitrator will deal with the case from start to finish.

Arbitration can also be selected for elements of the case that have reached deadlock, while the rest is dealt with through mediation or court. For example, the parties might agree to refer to an arbitrator the evaluation of a pension pot, or a dispute over chattels or schooling. ‘The binding nature of arbitration can be usefully applied to discrete issues on the case, while other points are more suitable for a collaborative approach,’ says Allison.

Recent years have seen the rise of med-arb, a combination of mediation and arbitration. This can be described as a psychologically informed, tailored take on finding resolution removed from the process-driven imperatives of court. Arbitration is reserved as an option from the start of the mediation process, in case issues are not resolved. Karin Walker, partner at Surrey solicitors KGW Family Law and co-founder of The Certainty Project (see boxout, p18) explains the benefits: ‘If issues become sticky, then an arbitrator can step in and make [a] binding decision where needed, but the matter does not have to reset from the start.’

Why is arbitration not used more?

Arbitration is often mischaracterised as a pursuit reserved for the wealthy, because it tends to be the preferred option in high-value divorce cases in which privacy is paramount. The power to choose an arbitrator can also deter lawyers from recommending arbitration to their clients.

‘Lawyers are sometimes reluctant to steer clients towards arbitration, as they fear being blamed directly if the chosen arbitrator finds against their client,’ says Walker. ‘However there are practical ways to allay this, such as presenting the client with a list of arbitrators and their qualifications and allowing them to choose.’

Some baulk at the binding and final nature of arbitration. This has the huge advantage of providing closure for the client, but in the past lawyers have been uncomfortable with the limited grounds to appeal – although since 2020 Haley has widened these criteria.

Lawyers can also be conservative. Some prefer to stick with the traditional court system for reasons of familiarity. Those used to taking a positional stance in court against their opponent may be reluctant to drop the adversarial approach and embrace ADR, including arbitration, as an alternative.

Not everyone is interested in a quick resolution for their client, either. ‘Unfortunately there are some litigators who make cases contentious, knowing that this will generate more fees,’ says Bull. ‘We need to change this culture through training, so that lawyers will consider a more collaborative approach.’

What else needs to change?

Covid piled pressure on a beleaguered courts system. In 2024, the Ministry of Justice reported that more than 100,000 children, along with their families, were in limbo. This figure included private children law cases – where families apply for arrangements relating to where their children live and with whom they have contact – which were taking an average of more than 11 months.

When it comes to disputes in court involving children and/or finances, people are spending a very long time in a state of flux. Positions harden, and personal circumstances, including finances, change. Arbitration is a pragmatic alternative that provides a time-efficient definitive answer and if it is not suitable, there are other ADR options. ‘Judges and magistrates should feel empowered to direct mediation or out-of-court alternatives under the procedural rules and consider costs orders if necessary,’ says Walker.

As one can see with the development of med-arb, ADR is evolving. Family lawyers must stay ahead of these changes. ‘Family law practices need to ensure sufficient arbitration and other ADR training among practitioners,’ says Todd. ‘We also must ensure that all the client’s ADR options are clearly explained to them, including the serious, binding nature of arbitration.’

Failure to embrace ADR and consider its possibilities also carries personal risk – with the prospect of potential negligence claims if delays in the court system damage the client’s chances of achieving a good resolution.

Solicitors are fast getting the message. 

Katharine Freeland is a freelance journalist