Arbitration: An Alternative to Lengthy Divorce Hearings

In times when waiting for a final hearing with a time estimate of two or more days which seems to take forever, more and more of those going through divorce and separation opt for alternatives to the court process.  In particular, as practitioners, we see private financial dispute resolution appointments becoming the norm. This is a process whereby the parties agree to pay a private Judge to give them an overview of what that “Judge” expects the outcome to be at trial. However, this is not the answer in all cases as it still requires the parties to reach an agreement. In some cases this is just not possible and some sort of decision made by a Third Party (usually the Judge) is required.

The alternative to this where a decision can be imposed upon the parties, is arbitration. However, there is a reluctance by parties to enter into this process and some of that reluctance appears to centre around the fact that there is a fear that something will be imposed upon them that they do not like. What happens in the event the arbitration goes wrong? Arguably of course, if you are in the court process the Judge may also get it wrong and make an order that is unpalatable to one or other parties. The advantage is that with the court process there is a well-trodden path for the appeal of such orders, albeit this is a step rarely taken because it is an expensive procedure especially when the parties have already paid to get to a final hearing.

The rules surrounding arbitration provide that once a decision is made by the arbitrator, the parties should invite the court to make an order in those terms.  However, what happens if one party refuses to enter into a consent order?  There is no traditional judgement to appeal.  The rules do, however, provide that the reluctant party must show the court on paper why he or she feels that an order should not be made in the terms the arbitrator decides it.  If they can show that there is a real prospect that the arbitral award is wrong, the court will set the matter down for hearing to “review” the case.  It is important to note that this is not a rehearing.

In the recent case of LT -v- ZU [2022] the court were asked to go through this process.  The arbitrator had made an award requiring the father (this was an unmarried couple) to purchase a property for the mother and child to live in under Schedule 1 of the Children Act.  The father sought to resile against an order being made stating that the arbitrator had no jurisdiction to require him to borrow funds.  He also argued that the award was unfair as it failed to take into account of his own needs and ability to pay, not least because a change in circumstances including significant increase in interest rates and his own net income falling, made it unaffordable.  These were all unforeseen at the time the award was made.

In this case, the court decided: