Talking is almost always the best way to solve difficulties and find a way forward even in the most hopeless of situations where the situation seems unsolvable…Think about the endless ACAS talks for the train and other strikes!
The same applies to matrimonial and relationship situations, in many ways this is an even more emotional and complex path to navigate, and a situation where assistance to talk, will be really important. Emotions can run high and face-to-face communication can feel like the hardest thing to do when your relationship ends.
Silence or heated arguments are the norm. Therefore, to start a productive solution based conversation and concentrate on what matters most to you and your family, often requires help. This is when mediation and other external communication tools such as family therapy are productive and help you move forward.
Mediation
Mediation a voluntary, collaborative process where a highly trained neutral third-party mediator facilitates discussions between disputing parties to enable them to reach a mutually acceptable compromise. The mediator does not have decision-making authority but plays a key role in guiding the conversation, identifying underlying issues, and suggesting potential solutions.
The requirements
- Voluntary and Flexible: Both parties must agree to the process, and they have control over whether they reach a resolution.
- Confidential: Discussions in mediation are private, providing a safe space for open communication without fear of information being used in future litigation.
- Control over Outcome: The parties retain control over the outcome, as the mediator’s role is to assist in negotiation, not impose a decision.
- Cost and Time-Effective: Mediation tends to be faster and less costly than arbitration or litigation due to its more informal nature.
In order to understand your priorities and assist you in choosing the best course of action, mediators listen to you. They will assist you in coming up with workable ideas that benefit both you and, if you are a parent, your children. The mediator and you will most likely meet for several sessions; three to five one- to two-hour sessions are typical. To get legal advice on what is best for you, you can speak with your own Solicitor whenever you choose. When an agreement is reached your lawyer will put in place a legally binding agreement after you are both satisfied with the choices you have made.
Where agreement is not possible
If agreement cannot be reached there are other options other than the lengthy and sometimes arbitrary court process where you can have some degree of control.
Arbitration
This essentially is a situation where the parties agree to use a retired judge or very senior lawyer to make a binding and enforceable decision outside the Court process. Since March 2012, it has been accessible for financial disputes, and since July 2016, it has been accessible for child-related matters. Both parties and any other ancillary parties sign a commitment to follow the arbitrator’s ruling prior to the arbitration beginning. You also agree that the judgment, commonly called an “award,” will be legally enforceable after it has been made and converted into a court order by consent.
How does it operate?
To be eligible to hear arbitration disputes, family law arbitrators must complete training and fulfil certain requirements. They are all members of the Institute of Family Law Arbitrators, a rigorously regulated professional organization.
The arbitration procedure is customised to meet your needs. On the recommendation of your lawyers, you decide.
The neutral arbitrator acts as a judge, he or she reviews the written evidence and hears oral evidence presented by both parties and making a binding decision. This process is more formal than mediation and akin to the court process. There is however more flexibility as you can choose your arbitrator and the much more speedy than the court process. would require the parties to be legally represented throughout the process and commit to adherence to the established procedural rules. Arbitration is commonly used in complex financial disputes where a conclusive decision is needed.
Key Features of FDR Arbitration:
- Binding Decision: The decision made by the arbitrator is legally binding and enforceable, like a court judgment.
- Structured and Formal: Arbitration follows a structured process, with hearings, evidence submission, and legal arguments.
- Expertise in Financial Disputes: Arbitrators are often experts in financial matters, which can be crucial for resolving complex financial issues.
- Limited Control: Unlike mediation, the parties have little control over the outcome, as the arbitrator ultimately decides the case.
Private Financial Dispute Resolution (pfdr)
pFDRs are a scenario where both parties agree to instruct a senior lawyer who has expertise usually in finance cases to give an indication to the parties on what they consider would be an appropriate settlement in an individual’s case.
The pfdr ‘Judge’ will have access to all of the papers and will be given a detailed case note from both parties’ advocates setting out parties’ cases and a settlement proposals and their proposals. The advocates will make submissions as they would in court. The pfdr Judge will then adjourn and give a written and verbal indication as to their view on the settlement. They will be available to assist in the parties’ subsequent negotiations during the course of the day with issues the parties have encountered.
This forum is well recognised by the courts and agreements arising out of this are then transposed into draft orders which the courts invariably approve.
The advantages of this are that the Judge will have the whole day to be involved in the case and will have been well prepared for it which a court-based FDR Judge with a list of up to six cases will not have had the advantage of. They will therefore be very case focused. The parties will also have the benefit of choosing a tribunal that they know, or their advocates know and have experience dealing with. There is a considerable amount of flexibility in this process and there is not stress of the court-based FDR process which is very much time constricted.
The option, however, does come with a cost and can vary from around £3,000 + VAT upwards depending on the experience and geographical location of the pFDR Judge. The reality, however, is that the barristers’ fees that occur for the pFDR are similar to that of FDRs. Although there may be additional costs incurred in finalising documentation which will not be included in the brief fee.
Another point to consider is unlike arbitration, the pFDR Judge does not have any decision making power and is there to give a view and guide the parties towards a settlement but in a more interventionist way using a very senior family lawyer. It is not generally a process that is used.
Costs:
If you are to use a very senior arbitrator / PFDR Judge, the cost will be a lot more but at a senior level the cost will be in the region of £3,000 to 5,000 plus VAT for FDR. For arbitration, it will be in the region of £10,000 to £20,000 plus VAT.
Conclusion
The choice between mediation, arbitration and Private Financial Dispute Resolution largely depends on the nature of the dispute and the preferences of the parties involved. Mediation is ideal for parties seeking a flexible, cost-effective, and collaborative resolution. Arbitration, on the other hand, is better suited for those who require a binding decision, especially in complex financial disputes where legal expertise is essential. All methods offer a way to avoid lengthy and costly litigation, but they cater to different needs and priorities in dispute resolution.
This article was written by Ann Thompson & Elena Panayi of Goodman Ray
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If you have any questions or wish to get legal advice on any of the topics raised above, please feel free to ring us 020 7608 1227.
Alternatively, email Ann, co-author of this article and Consultant at Goodman Ray.
