“Court backlog” is a repeated phrase we hear now more than ever. The Court system is overwhelmed with existing family law cases and with new matters being issued every day it is no surprise that the court are pushing for parties to consider non-court dispute resolution (NCDR) methods in an effort to free up court time. That is not to say that the mounting pressure on the court system alone is a reason to consider NCDR, there are numerous benefits which this article will consider, but it certainly does incentivise exploring other avenues.
So what exactly is NCDR? It is essentially a collective term used to describe methods available to help people resolve disputes without making a Court application. Whilst the term “non court” dispute resolution does suggest a standalone process, it can be run alongside a Court process to help minimise timescales or narrow the issues between the parties that require judicial guidance.
There is an increasing expectation from the court on parties to engage in NCDR and in most cases it is a precursor to any court application. In the absence of genuine attempts to resolve matters outside of the court process, the court may penalise the parties involved in costs if they refuse.
The court will also in some cases stay proceedings to enable the parties to engage in a form of NCDR. In WL v HL (Rev 1) [2021] EWFC B10 the Judge found that the issue being litigated was disproportionate to the costs already incurred by the parties in legal fees, so directed that the parties go away and look at forms of NCDR. The parties later reached an agreement within mediation. A further example of the court’s commitment to promoting NCDR can be seen in AM v RF [2024] EWFC 288 (B) where the court adjourned the proceedings and urged the parties to engage in mediation and then went on to make a costs order against one party on the basis she had refused to actively engage in NCDR. Some more interesting examples can be found in this article.
There are numerous forms of NCDR but this article will focus on, arguably, the most widely known and used form of NCDR – mediation – together with arbitration.
Mediation
What is mediation?
Family mediation is a form of NCDR which is entered into voluntarily. The discussions are confidential and privileged (meaning that what is discussed within mediation cannot later be presented to the court). It is therefore a great forum to have open and honest discussions without having the concern of prejudicing yourself. Family mediation involves appointing one (or sometimes two) trained, independent mediator who helps couples resolve disputes around their separation by facilitating proactive discussions. The mediation process typically takes place over several or more sessions conducted in-person or remotely. It is incredibly flexible and there are various forms of mediation to include sessions where the parties are together, in separate rooms (known as shuttle mediation) or with solicitors’ present (known as hybrid mediation). The mediator, over a series of meetings, facilitates constructive discussions and helps those involved narrow the issues that cannot be agreed helping find a way for the parties to resolve their dispute. The mediator cannot provide advice to those engaged with the process but will enable those involved to identify areas or issues where they need to take independent advice. It is helpful and advisable (particularly with financial matters) to take advice from a solicitor alongside the mediation process to enable those involved to return to the mediation process informed generally and on any specific issues that are a barrier to reaching an agreement. Ultimately the parties are in control over whether to settle the dispute and on what terms which for many, is far more palatable than having a decision imposed by a court.
Solicitors often provide mediation support by either attending mediation sessions themselves (hybrid mediation) or supporting in the background. This often involves advising one party on various issues such as financial disclosure, any offers that are made or what may be a reasonable offer to advance or to advise on discreet legal issues. This then allows parties to feel fully supported and informed within the process, particularly as mediators cannot provide legal advice. Further details on the benefits of solicitor led mediation are discussed in this article.
What are the advantages of mediation?
- Cost effective – mediation fees are far less than solicitors fees. Having advice in the background from a solicitor and using mediation as the forum to gather information, narrow the issues and negotiate a settlement will ensure that parties are informed but the costs are proportionate. There is also funding support to encourage families to use mediation to include the Mediation Voucher Scheme introduced by the government in March 2021 together with legal aid (means tested).
- Pace – the court process can take 1-2 years to conclude. Provided parties engage proactively with the mediation process, it can reduce this significantly with many reaching a resolution within months.
- Autonomy – you have the freedom to make your own decisions as opposed to a court imposing a decision on you. This gives parties the freedom to explore and agree creative outcomes that the court may not order.
- Confidentiality – the process is totally confidential.
- Flexibility – you can fit mediation around your life and what works for you. With any court process you are dictated to in terms of when documents have to be filed and when you have to be available for a hearing.
What are the disadvantages of mediation?
- Requires parties to be proactive and engage fully – you cannot compel someone within mediation to produce financial disclosure for example and we can sometimes see cases where mediation may not be appropriate because of attempts to conceal assets.
- Cannot resolve disputes of fact – within a court process any disputed fact which will have a material impact on the outcome can be decided by a Judge. A mediator’s role however is not to determine issues but to help parties have constructive discussions.
- Duplication / delay – if agreement cannot be reached then it is likely that whatever process is pursued after, there will be an element of duplication in terms of financial disclosure (i.e. updating bank statements so they are current) and will inevitably cause a delay.
- Uncertainty of outcome – unlike a Judge, a mediator cannot impose any decision. Any agreement reached within mediation is not technically legally binding and it is therefore open to either party to renege from what was agreed within that process unless it has been openly communicated in some way.
Arbitration
The definition of NCDR is expanded to specify not just mediation but also arbitration (amongst other forms of NCDR).
What is arbitration?
Arbitration allows parties to appoint a qualified person to decide the outcome of their dispute in a more time efficient, cost-effective way offering privacy and a more relaxed setting than that which is experienced in a court room. Unlike mediation, the parties agree to be bound by an arbitration award therefore providing finality. Whilst an arbitration award can technically be challenged within a court process, the judicial and arbitral tests for challenging an award have been aligned which essentially puts arbitral awards on the same footing as court orders in terms of how they are regulated and analysed.
Both parties must agree to engage in arbitration and to be bound by any orders/directions that the arbitrator makes (it is possible to enforce an arbitrator’s order within a court process if one party fails to engage after commencement of the process). The arbitrator is selected by agreement and, once appointed, will remain with the case until the parties have reached an agreement or a final arbitration award is made. This familiarity with the case, allows the arbitrator to make orders/directions that they feel are necessary to bring about the matter to a conclusion and provide continuity. Judicial continuity is not something that is guaranteed within a court process where different Judges can have different approaches and make different decisions altering the course of the proceedings generally.
Similarly to a court process, the arbitrator will set out what the parties must exchange /file and by when (for example financial disclosure) and will list hearings which can be conducted in person or remotely. Arbitration hearings provide a more informal and relaxed environment allowing greater opportunity for the parties to explore settlement options as generally all parties involved are not rushed or pushed for time unlike hearings within a court process where one Judge may be hearing several other cases in one morning. If the parties are unable to reach an agreement, then the arbitrator can impose a final decision. However, it is appropriate to have an arbitration award (whether agreed or imposed) incorporated into a mirror order that is approved by the court.
The current President of the Family Law Division highlighted a case (Haley v Haley [2020] EWCA Civ 1369) and commented on the use of arbitration in financial remedy cases and how it has progressed:
“It is both clear and pleasing that the work that the Institute of Family Law Arbitrators [IFLA] has done to promote arbitration for both financial and children cases since its inception in 2012 is now gaining recognition. For the right cases, arbitration may well be the right route for dispute resolution in a family case. A broad spectrum of practitioners have been signed up and trained under the IFLA Scheme. As King LJ makes plain, there are now Family Law Arbitrators available for cases at all levels.”
More people are turning to Arbitration as a method to resolve financial remedy disputes particuarlly with the greater transparency in family proceedings which means that the press will more frequently be allowed to report on cases before the court. Arbitration provides certainty of privacy and confidentiality. It also respects autonomy as the parties must commit to being bound by any arbitral award and it can be used flexibly to resolve all the financial issues arising out of a separation or discreet points such as deciding on disputes relating to personal belongings.
What are the advantages of arbitration?
- Speed – it is generally quicker than a court process and less likely for expert reports to “expire” and need updating (at a cost to the parties).
- Autonomy – the parties agree to engage in arbitration and have the freedom to select their arbitrator who will be an expert in family law. Court Judges may not have practiced in family law (i.e. they may have practised in medical negligence only before becoming a Judge) and therefore may not have the same appreciations for nuances that arise in family law matters.
- Flexibility – the parties can pick, together with their arbitrator, timescales that work for them. The parties have the power to agree a setting in which to have arbitration hearings and will therefore have power over making the process less stressful generally with a more relaxed and informal setting.
- All or some – the parties can use arbitration as a method to resolve all the financial issues arising out of their separation or just a discreet issue.
- Final decision – an arbitration award is binding and gives certainty (although it can be appealed).
What are the disadvantages of arbitration?
- Cost – within a court process you pay one fee, and you have your Judge’s/court time within that one fee. Whereas with arbitration you must pay for your Judge and the arbitration hearing setting. In practice the overall cost may be lower when you factor in the court delay. Delay ultimately raises costs.
- Outcome – the parties doe not have control as to the outcome unless agreement is reached. You should also have a mirror order approved by the family court.
- No power over third parties – arbitration cannot compel third parties to provide disclosure / documentation. If there are third party issues and/or suspected hidden assets, arbitration may not be the best forum to resolve matters.
Summary
The move to NCDR is positive and whilst every method of resolve will have its disadvantages, these are often outweighed by its benefits. The flexibility of NCDR allows more than one method to be used to resolve a dispute – for example, parties who chose to commit to arbitration where mediation has not been wholly successful. At Stephens Scown we advise daily on NCDR and tailor this advice to individual cases to ensure that the best possible avenues to settlement are explored.
As members of Resolution (who commit to a Code of Practice that promotes a constructive approach to family issues and considers the needs of the whole family, in particular the best interests of children) we work closely with all parties involved to try and help families get from a to b as quickly and cost effectively as possible and NCDR provides various tools to assist with this.
There is certainly a push from the top down to engage in NCDR and it will be interesting to see the changes that come from this in terms of NCDR methods and the status of our overworked judiciary.