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Arbitration in family law: a quicker, cheaper option than court

By November 2, 2016No Comments

By Gianna Huesch

Going to court to resolve your family law property dispute is truly the option of last resort given the lengthy waiting times and spiralling costs involved. Sometimes however, negotiations and mediation processes simply fail to achieve agreement in your matter. Do you have any alternative to litigation? Absolutely. Arbitration, a much faster and more economical option than going to court, may be the solution for you.

Alliance Family Law are your ‘go to’ lawyers for arbitration. If  you are interested in an economical, quick decision on your family law matter, read on.

Although the legal framework for private arbitration in Australia has been around for decades, it has not been as frequently used as it could. However, this is changing and there is a renewed interest in the process, particularly given the much-discussed burdens on the family law court system. The family court system is widely regarded as massively overburdened, with huge waiting times, and increasing complexity in litigated cases. Arbitration is seen as an important way to relieve the burden on the family court system, particularly when the court resourcing issue is unlikely to be resolved politically any time soon.

So what is arbitration? It is a dispute resolution process existing outside the court system which still delivers a legally-binding decision. Parties to a dispute present arguments and evidence to a trained third party, usually a lawyer, who is known as an arbitrator. The arbitrator reviews the evidence from both sides and makes a determination to resolve the dispute. Mirroring the rules around court proceedings, parties have a duty of disclosure to the arbitrator, and the issues in dispute are determined according to the relevant family law.  Once registered, the arbitrator’s decision (called the “award”) is as binding and enforceable as if it were a decree of the court.

Arbitration can be used by separating couples to divide assets and determine outcomes in property and maintenance cases. However, children’s issues and child support issues may not be arbitrated at this stage.

Writing in the current issue of Australian Family Lawyer, arbitration expert Professor Patrick Parkinson outlines the case for its use in ‘house and garden’ property disputes. He argues that ordinary Australians with modest assets and relatively uncomplicated financial affairs are much better off avoiding the court system and resolving their matter quickly and efficiently through arbitration.  He notes that the process is most suited for those matters where there isn’t a substantial pool of assets and “where the parties really cannot afford the long haul of a two or more year battle in the courts”.

Rather than spending years waiting for courts to deliver decisions, arbitration can take 5 to 8 weeks to reach a final decision. “The great majority of property cases ought to be able to be resolved within three months of clients first approaching lawyers for advice”, according to Prof. Parkinson.

It can be done ‘on the papers’, online or over the phone and involves no time in court. Another benefit is that you retain substantial control over the timing and the degree of formality or informality involved. It’s also possible to arbitrate a single aspect of a case (eg. Determining the value of a business or asset or establishing issues of fact in dispute) which may be holding up settlement of a case.

Is arbitration expensive? It does involve the costs of paying an arbitrator and, if a face-to-face hearing is required, there is also the cost of renting a suitable room. However as Prof. Parkinson points out, “the expense per person may be less than one court mention seeking to get hearing dates from a judge”.  People may also feel they need to hire the most well-respected and highly qualified arbitrators, such as leading senior counsel. However, such professionals not needed to act in most disputes of ordinary Australians. Regarding cost, Prof. Parkinson points out:

“Putting the cost into perspective, an arbitration on the papers or even a hearing for half a day is likely to be a less than what the real estate agent will charge to sell the house, or a surgeon and anaesthetist would charge for a minor operation.”

So why hasn’t arbitration been more popular until now? Prof. Parkinson identifies some of the reasons why arbitration has been under-utilised as a means of alternate dispute resolution in Australia. These include, apart from trepidation about costs, an uncertainty about the process, and a nervousness about whether or not arbitration awards are truly final (in fact, there is a “high degree of finality”) and what options there may be for review or appeal (such options do exist). There is also a fear of the difficulty of organising arbitration, compared to attending court which is a relatively known quantity in terms of procedures and buildings.

A quick and well-organised arbitration, costing a fraction of what you might spend on legal fees for litigation, is however a realistically achievable method of resolving  your dispute, and should definitely be considered.

Would you like to discuss with a family lawyer whether your matter may be suitable for arbitration rather than protracted and expensive litigation? Please contact Cristina Huesch here at Alliance Family Law on (02) 6223 2400 and take advantage of our no-obligation, cost-free initial consultation to work out the best way forward for you.


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