Arbitration is a private formal dispute process in which two or more parties agree to refer their dispute to an independent third person (the Arbitrator) for determination. Provided the arbitration is conducted according to the principles of natural justice its process may be varied by the parties to suit the size and complexity of their dispute.
Less complex cases may be determined on the basis of documentary submissions alone which can reduce its costs significantly.
Complex cases may benefit from a more judicial style of hearing in which formal applications and responses are lodged and evidence is put forward by each party and tested by cross-examination. Parties to Arbitration in complex matters will have the advantage of an adjudicated result that is not constrained by the time frames presently encountered in the Federal Family Court arena.
The result of the Arbitration is known as an `award’ and is enforceable in the same manner as a court judgement under the Family Law Act. The arbitrator must apply the principles set out in the Family Law Act as the Court would do. Arbitration is only conducted with the agreement of both parties. It cannot be forced on anyone. The award (decision) is binding on each party subject only to an appeal on a question of law.
It is important that you choose a trained and qualified arbitrator who is approved under the Family Law Act. This means the arbitrator must:
- be a legal practitioner who is either an accredited Family Law Specialist or who has at least 5 years post administration practice experience of which at least 25% must be related to family law;
- have completed a specialist arbitration course conducted by a tertiary institution or professional association of Arbitrators; and
- be included in the list of approved mediators maintained by the National body for family law arbitrators and mediators
An award by an arbitrator who is not approved under the Family Law Act is not binding on the parties.
For more complex matters we have access to very experienced arbitrators.
The Benefits of Arbitration
- Can greatly reduce the financial and emotional stress and legal costs of litigation.
- Parties can make their own decisions about who will decide their dispute and how they make that decision;
- Parties can set their own time frame in which to settle their dispute.
- Disputes are generally resolved faster.
- Parties are then able to move forward and make a new life for themselves in a matter of months rather than years.
- This process is particularly suited to those matters where parties’ financial affairs are straightforward or where assets are not held in companies or trusts.
- Private details are not aired in a public forum such as a courtroom. However, in some circumstances arbitrators are compelled by law to report matters to the relevant authorities. It is therefore important to discuss the issue of confidentiality prior to signing an arbitration agreement.
The Disadvantages of Arbitration
- The award (decision) is binding and only subject to appeal on a question of law. This means that until there is a change in the legislation, it is not possible to appeal an arbitrator’s finding of facts.
- Until there is further clarification, there is uncertainty about whether an arbitrator has the power to make a superannuation splitting order.
- Until there is further clarification, there is also uncertainty about whether the States will grant stamp duty relief for property transfers that are provided for in an award
- The process while not as expensive as litigation is more expensive than mediation because of the degree of formality required by this process. The more formal the process the more expensive it is but it is still less expensive than mediation because of the much shorter time frame to resolve a dispute.
- The process can only be used for financial matters
This process will not suit everyone
Arbitration is suitable for married and de facto couples who have separated. It may not suit circumstances where there is significant disagreement about facts as asserted by each party. Nor will it be the preferred process where there are issues about parties complying with their obligation to fully disclose financial information. You should therefore seek legal advice about whether your matter is suitable for arbitration.
Damien Greer and Wendy Miller are trained Arbitrators and can provide further information to those people interested in this process.