It has been possible to resolve family law property disputes through arbitration for more than 25 years, but Family Law Rules on arbitration introduced in April 2016 has seen the family courts encourage much greater use of it.
It is important to note that arbitration cannot be used in parenting disputes; however, it can be a very good option for clients with property disputes who have tried negotiation and mediation to resolve their dispute without success and are facing a significant delay to have their matter heard before the courts.
What is arbitration?
Arbitration is a process in which parties to a dispute present arguments and evidence to an arbitrator, who then makes a determination to resolve the dispute. In this sense, it is like hiring a private judge in your matter. Parties to a family law property dispute must both voluntarily agree to have the matter settled through arbitration as this process cannot be court imposed.
The Family Law Act (1975) sets out that to qualify as a family law arbitrator, legal practitioners must either be accredited family law specialists or be qualified as a lawyer for at least 5 years and work in the area of family law for a minimum of 25% of their time, and they must be on list of arbitrators kept by the Law Council of Australia. In practice, arbitrators generally have credentials that well surpass these standards. Most are solicitors or barristers with decades of family law experience behind them, and former judges are also known to work as arbitrators, too.
The Family Law Act provides that a decision made by an arbitrator, once registered, takes effect as if it were a decree of the court (s. 13H).
Arbitration as a stepping stone to resolution
Arbitration can also be useful as a means of resolving individual issues that are stopping negotiation between the parties from moving forward. For example, parties may be in dispute about the value of a business or a particular asset, and they can agree to have this single issue determined through arbitration. In this way, arbitration can not only be an alternative to litigation, but it can also be a very useful tool for narrowing down the issues that may resolve the need for the matter to go to hearing.
Whereas a courtroom and the time that the judge hears your matter is covered by your court filing fees, arbitration does come with the added cost of paying for not only the arbitrator but also the hire of the space where arbitration takes place. These costs can easily run into several thousand dollars per day. However, for those clients who need or want to resolve their property dispute faster than the court system allows for, it may well be money well spent.