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The couple that arbitrates together…

Philip Hunter considers what a new arbitration scheme designed to avoid forum shopping will mean for international marriage disputes

22 August 2017

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Following recent announcements of further court closures and the flexible hours pilot scheme, practitioners and clients alike will inevitably seek to reflect on other forms of dispute resolution to assist them with their family law difficulties. Consideration of the available forms of alternative dispute resolution leads to the recent, timely launch of IFLAS – the International Family Law Arbitration Scheme.

Not to be confused with the Institute of Family Law Arbitrators (IFLA) and its scheme, including the 2016 revised arbitration rules, IFLAS was announced at the AFCC Conference in Boston earlier this summer, with its website due to go live on 4 September 2017. The scheme proposes using an arbitrator from a third-party country (that neither party is connected to), operating under a worldwide common law scheme. The appropriate “close connection” country in which the dispute will be heard is selected with the assistance of an online application form.

The move to secure a third-party country arbitrator is seen as a key selling point of the IFLAS programme, designed to encourage parties to avoid disputes over arbitration forum shopping, based on the potential outcome of settlement or recognition of pre-nuptial agreements, for example. In matrimonial finance matters, our domestic courts continue to be seen as among the most attractive and advantageous to non-breadwinning spouses. International arbitration might be seen as a course of dispute resolution to address concerns parties may have on this point.

Operating under the new IFLAS scheme, parties would agree not to pursue any other court proceedings pending the resolution of the arbitration and to abide by the arbitrator’s outcome, with an expectation that pending litigation would be adjourned to allow the arbitration the opportunity to succeed.

The founders of IFLAS report that they have already attracted leading international arbitrators, including retired and part-time judges. In addition, their use of technology to enhance the arbitration process will further increase transparency and reduce costs for those engaging with the scheme.

The domestic appetite for arbitration is growing and as the continued impact of austerity bites on our court system, this is only likely to continue in the future. For high-net-worth couples and those seeking to avoid the glare of the media spotlight (see, for example, the cases of Gallagher and Ciccone), the added attraction of anonymity may also see parties increasingly eager to move away from the traditional court arena and utilise an accepted internal scheme, too.

However, it would appear that this growing domestic appetite for arbitration is developing at a relatively modest rate. National Family Mediation recently reported that 60 per cent of couples still ignore their basic MIAM obligations, despite the oft-espoused argument that ADR is a cheaper and faster alternative to traditional court action.

It is apparent that the imminent continued growth in the use of arbitration will be from that discrete cohort of families who are financially able to adopt ADR avenues in earnest. The appetite for ADR from “the man on the Clapham omnibus” has yet to manifest in quite the same way. The bulk of individuals still want their day in court, although that may change when they realise it is 35 miles away and won’t finish until 8pm.

Philip Hunter is a partner at Hunter and Uro

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Family ADR International