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Arbitration in financial disputes

In early 2012, family arbitration was introduced as a new option for resolving financial disputes in family law cases.  The process has therefore been in existence for just over two years and is still a relatively new option for clients.

 

Arbitration is a process tailored around the parties to a dispute but it is based on the principles of English law and it delivers a binding decision.  The parties to a dispute are able to define the issues to be determined in arbitration and can limit what it is they require the arbitrator to decide.  The decision would then be made in accordance with the law.

 

There are several benefits of using arbitration instead of making an application to court.  The parties themselves are able to select their arbitrator (or have one selected for them if they cannot agree) and it is this arbitrator who will see their case through to its conclusion.  In court, it is extremely rare for a case to be heard by the same judge at different hearings and this can sometimes lead to an inconsistent approach.

 

The process is usually much speedier than making an application to court as it only needs to fit around the diaries of the arbitrator and the parties, rather than only progressing when the court can offer a hearing date (and there are often several months between hearings in financial disputes).

 

As stated above, it is possible to limit what it is the parties are asking the arbitrator to decide.  If an agreement has been reached on several issues, it is perfectly possible to limit the arbitration to the “sticking points”.

 

Arbitration is an extremely useful option for clients to have.  An arbitrator would need to be paid for privately and there are, of course, several instances where this may not be possible.  However, if it seems as though a court application is necessary in any particular dispute it could well be cost-effective to opt for arbitration, even with the parties having to meet the cost of the arbitrator.  This is because it is likely to be a much swifter and more defined process.

 

The process is also highly useful where there are complex legal issues which need to be resolved and this cannot be done in mediation or through negotiation.  In some cases, a binding decision needs to be made by someone other than the parties: either a judge or an arbitrator.

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