Private client firms are scrambling to bolster their arbitration capabilities six months after family law arbitration was introduced in England and Wales. Family lawyers are reporting arbitration training programmes are fully booked going into 2013.
The Institute of Family Law Arbitrators (IFLA) launched the Family Law Arbitration Scheme in February this year as a viable alternative to the court process. The rising popularity of this method of resolving disputes means family law teams will be looking to offer this service as soon as possible.
One of the biggest proponents of arbitration is Suzanne Kingston, a family partner at Withers, who had been pushing for the move for ten years. Despite the fact that it’s early days, she remains optimistic. ‘All innovation takes time to bed in but the training also takes a while,’ she said.
In fact arbitration training, supplied by the IFLA at a cost of £1,650 plus VAT, is completely booked up until the new year according to Jane Craig, head of the top-ranked family law team at Manches.
‘We have made a decision that one of the partners is going to train to be an arbitrator but all the training courses are full up to the end of this year,’ she said.
Family law arbitration only deals with financial and property disputes and is only one part of various alternative dispute resolution (ADR) options available to clients. The reason why it may become more popular than other forms of ADR is that an arbitrator can make an adjudication if both sides have agreed to go through the process. With mediation, for example, a dispute is discussed with a third party who can then recommend a course of action but cannot impose one.
Another contributing factor in the rise of arbitration family disputes is the ever-increasing pressure courts are under.
‘The delays in court hearings are already huge in some areas of the country. In central London you can wait a year for a hearing. When legal aid cuts bite next year courts are going to get busier and busier,’ said Nigel Shepherd, a family partner at Mills & Reeve.
‘Arbitration will become increasingly attractive for people who simply can’t put their lives on hold for this amount of time,’ he added.
‘All innovation takes time to bed in but the training also takes a while.’
Suzanne Kingston, Withers
One key difference between going to arbitration and court is paying an arbitrator an hourly rate. According to Shepherd the seniority of the arbitrator can have a big effect on the cost.
‘The hourly rate range can vary from £200 an hour for an arbitrator in the regions to £600 for a senior QC in London,’ he said.
However, high-net-worth clients will be more than willing to pay for the arbitrator’s time in return for the confidentiality that comes with the process, unlike the courts. Clients also get to appoint their arbitrator who will remain the same through the entire process. And, as Shepherd pointed out, there is always the risk of going to court and having a judge with no real family law experience.
‘In county courts you can come up with a judge whose experience in private practice was something else, like criminal law. With an arbitrator you know you’re getting a family law specialist with lots of experience,’ he said.
Family lawyers said that it was difficult to assess how lucrative the practice is going to be and the volume of cases to have gone to arbitration so far. The obvious draw of the process is confidentiality, particularly for high-profile clients. A number of family law partners had heard of high-profile figures going through arbitration but details are vague.
While family law arbitration is still at a nascent stage it is difficult to predict the volume of cases going through. It’s so new in fact, that the IFLA couldn’t provide any information as to how many matters have gone to arbitration since the scheme launched.
Even Kingston, one of the driving forces behind the scheme is uncertain. ‘I really don’t know how many disputes have gone to arbitration already. I know lots of people have referred cases to arbitration but whether or not they have ended up there I am not sure,’ she said.
However, firms with strong family practices such as Withers, Charles Russell and Mills & Reeve say they have had arbitrators in their teams since the scheme was introduced. According to both Kingston and Shepherd, this puts them at an advantage. ‘It is a great selling point,’ said Shepherd.
Rachael Kelsey, a founding director at Scottish firm Sheehan Kelsey Oswald, who has been involved in the development of family law arbitration since it came into force last July in Scotland, said that being able to act both for a client before an arbitrator or act as the arbitrator itself distinguishes a firm. ‘There is a cost to train arbitrators at your firm but the amount of clients you can attract more than makes up for the investment,’ she said.
Manches’ Craig thinks that arbitration will prove to be extremely popular. ‘There is a huge appetite for this because people know there is so much pressure on the courts and clients find it incredibly frustrating when a case is not resolved,’ she said.
However, the pressure on the court system may be alleviated by senior family division judge Mr Justice Ryder’s recent report, ‘Judicial proposals for the modernisation of family justice’, which proposes a single unified family court. This would entail a new system that incorporates a network of local family court centres with judges trained to deal with cases far more efficiently.
‘The single Family Court will be the vehicle for a significant change of culture characterised by strong judicial leadership and management and evidence-based good practice,’ said Mr Justice Ryder in his report.