ARBITRATION IN FAMILY LAWHOPEFULLY A NEW ERA
PRESENTED BY WARWICK JONESSENIOR PARTNER, JONES MITCHELL LAWYERSACCREDITED FAMILY LAW SPECIALIST
IS THERE A NEED FOR ARBITRATION?
Yes. Both the Family Court of Australian and Federal Circuit Court of Australia are overwhelmed. There is not enough funding and there are not enough Judges. The number of cases increases each year whereas the necessary resources are conversely diminished.There have been a number of attempts to ‘shore up’ the problem over a lengthy period of time, ie:The establishment of the Federal Circuit Court of Australia (formerly the Federal Magistrates Court) which now does approximately 80% of all family law work;The introduction of Family Dispute Resolution as a necessary pre-requisite in parenting matters; andThe significant uptake in participation in Mediation, whether ordered by the Court or undertaken voluntarily.All of those positive introductions and processes have not of themselves managed to stem to time of work referred to the two Courts nor stop the ever increasing delays.
WHAT IS ARBITRATION?
Section 10LDefinition ofarbitration(1)Arbitrationis a process (other than the judicial process) in which parties to a dispute present arguments and evidence to an arbitrator, who makes a determination to resolve the dispute.In terms of theFamily Law Act, there aretwotypes of Arbitration:Section 13E Arbitration, which is ordered by the Court;Voluntary Arbitration which is Arbitrationundertakenwithout a Court Order.
SECTION 13E ARBITRATION
Arbitration can only deal with property and financial matters.Section 13EArbitration:can only deal withproceedings under Part VIII (that is matrimonial property proceedings) or Part VIIIAB (which deals with de facto propertyproceedings);specificallyexcludes proceedings under Part VIIIAB dealing with Financial Agreements.Section 13ECourt may refer Part VIII proceedings or Part VIIIAB proceedings toarbitration(1) With the consent of all of the parties to the proceedings, a court exercising jurisdiction in:(a) Part VIII proceedings;or(b) Part VIIIAB proceedings (other than proceedings relating to a Part VIIIAB financialagreement);maymake an order referring the proceedings, or any part of them, or any matter arising inthem, to an arbitrator for arbitration.(2) If the court makes an order under subsection (1), it may, if necessary, adjourn the proceedings and may make any additional orders as it thinks appropriate to facilitate the effective conduct of thearbitration.
WHAT MATTERSARE NOTAPPROPRIATE FOR ARBITRATION?
Cases involving parenting matters;Cases involving both property and parenting matters where it is not possible to determine the property outcome without first determining relevant parenting matters including child support issues;Possibly large and complex matters where the skill of a Judge may be more appropriate and where the costs are not a significant concern;Cases involving concerns abouta parties’ safety and security;Casesinvolving issues of unlawful behaviour, eg. tax evasion or social securityfraud;Cases involving self-represented parties’ cannotafford the costs of an Arbitrator whereas in the Court system they are not responsible for any fees including the possibility of applying for an exemption for paying the fees of a cost of the trial.
WHAT MATTERSAREAPPROPRIATE FOR ARBITRATION?
Where the parties are close together and it is likely that the ‘gap’ could be more quickly, simply and cost-effectively closed by Arbitration rather than through litigation;Where for a variety of reasons privacy is important;Where the amount involved is quite small;Where the issues involved are not necessarily complex;Where there are no parenting issues or child support issues.
THE LEGISLATIVE FRAMEWORK
Section 10LDefinition ofarbitration(1)Arbitrationis a process (other than the judicial process) in which parties to a dispute present arguments and evidence to an arbitrator, who makes a determination to resolve thedispute(2) Arbitration may be either:(a)section 13E arbitration—which is arbitration of Part VIII proceedings, or Part VIIIAB proceedings (other thanproceedingsrelating to a Part VIIIAB financial agreement), carried out as a result of an order made undersection13E;or(b)relevant property or financial arbitration—which is arbitration (other than section 13E arbitration) of:(i) Part VIII proceedings, Part VIIIA proceedings, Part VIIIAB proceedings, Part VIIIB proceedings orsection106A proceedings; or(ii) any part of such proceedings; or(iii) any matter arising in such proceedings; or(iv) a dispute about a matter with respect to which such proceedings could beinstituted.Section 10MDefinition ofarbitratorAnarbitratoris a person who meets the requirements prescribed in the regulations to be an arbitrator.
THE LEGISLATIVE FRAMEWORK
Section 10NArbitrators may charge fees for their services(1) An arbitrator conducting arbitration may charge the parties to the arbitration fees for conducting it.(2) The arbitrator must give written information about those fees to the parties before the arbitration starts.Note:Theremay be Rules of Court or regulations relating to the costs of arbitration and how they are assessed or taxed (see paragraphs 123(1)(se) and 125(1)(bc)).Section 10PImmunity of arbitratorsAnarbitrator has, in performing his or her functions as an arbitrator, the same protection and immunity as a Judge of the Family Court has in performing the functions of aJudge.Note: Communicationswith arbitrators are not confidential, and may be admissible in court.
THE LEGISLATIVE FRAMEWORK
Section 12BPrescribed information about non‑court based family services and court’s processes and services(2) Without limitation, information prescribed under this section must include information about:(e) the arbitration facilities available to arbitrate disputes in relation to separation and divorce.Section 13AObjects of this Part(1) The objects of this Part are:(b) to encourage people to use dispute resolution mechanisms (other than judicial ones) toresolvematters in which a court order might otherwise be made under this Act, providedthemechanisms are appropriate in the circumstances and proper procedures arefollowed; and(c) to encourage people to use, in appropriate circumstances, arbitration to resolve matters inwhicha court order might otherwise be made, and to provide ways of facilitating thatuse.
THE LEGISLATIVE FRAMEWORK
Section 13ECourt may refer Part VIII proceedings or Part VIIIAB proceedings toarbitration(1) With the consent of all of the parties to the proceedings, a court exercising jurisdiction in:(a) Part VIII proceedings; or(b) Part VIIIAB proceedings (other than proceedings relating to a Part VIIIABfinancialagreement);maymake an order referring the proceedings, or any part of them, or anymatter arisingin them, to an arbitrator for arbitration.(2) If the court makes an order under subsection (1), it may, if necessary, adjourn the proceedings and may make any additional orders as it thinks appropriate to facilitate the effective conduct of the arbitration.
THE LEGISLATIVE FRAMEWORK
Section 13F Court may make orders to facilitate arbitration of certain disputesA court that has jurisdiction under this Act may, on application by a party to relevant property or financial arbitration, make orders the court thinks appropriate to facilitate the effective conduct of the arbitration.Section 13HAwards made in arbitration may be registered in court(1) A party to an award made in section 13E arbitration or in relevant property orfinancialarbitration may register the award:(a) in the case of section 13E arbitration—in the court that ordered the arbitration;or(b) otherwise—in a court that has jurisdiction under this Act.(2) An award registered under subsection (1) has effect as if it were a decree made by that court.
THE LEGISLATIVE FRAMEWORK
Section 13JFamily Court or Federal Circuit Court can review registered awards(1) A party to a registered award made in section 13E arbitration or relevant property or financial arbitration may apply for review of the award, on questions of law, by:(a) a single judge of the Family Court; or(b) a single judge of the Family Court of a State; or(c) the Federal Circuit Court of Australia.Note: There may be Rules of Court providing for when, and how, an application for review of the award can be made (see paragraph 123(1)(sf)).(2) On a review of an award under this section, the judge or Federal Circuit Court of Australia may:(a) determine all questions of law arising in relation to the arbitration; and(b) make such decrees as the judge or Federal Circuit Court of Australia thinks appropriate,includinga decree affirming, reversing or varying the award.
THE LEGISLATIVE FRAMEWORK
Section 13KFamily Court and Federal Circuit Court may set aside registered awards(1) If an award made in section 13E arbitration or relevant property or financial arbitration, or an agreement made as a result of such arbitration, is registered in:(a) the Family Court; or(b) the Federal Circuit Court of Australia; or(c) a Family Court of a State;thecourt in which the award is registered may make a decree affirming, reversing or varying the award or agreement.(2) The court may only make a decree under subsection (1) if the court is satisfied that:(a) the award or agreement was obtained by fraud (including non‑disclosure of a material matter); or(b) the award or agreement is void, voidable or unenforceable; or(c) in the circumstances that have arisen since the award or agreement was made it is impracticable for some or all of it to be carried out; or(d) the arbitration was affected by bias, or there was a lack of procedural fairness in the way in which the arbitration process, as agreed between the parties and the arbitrator, was conducted.
THE LEGISLATIVE FRAMEWORK
Family Law Regulations1984Part 5 – ArbitrationRegulations 67A to 67T (inclusive)Family Law Rules 2004Chapter 26BCopies of the relevant Sections, Rules and Regulations are attached to the Paper.
ADVANTAGES OF ARBITRATION
The opportunity to select your own expert (Arbitrator);Flexibility of the process;Privacy;Lower cost and higher speed;Unlike Mediation, Arbitration guarantees an outcome (binding);The avenues of appeal are narrower;The opportunity to choose your own venue;Promptness of the decision;Avoids the risk of lawyers who wish to drag matters out.
DISADVANTAGES OF ARBITRATION
Some Arbitratorsmay not be asgood as Judges;‘Second-class’ form of Dispute Resolution available to the poor;Privacy of the processmay mean that someparties whowould and should suffer the consequences for unlawful behaviour such as tax avoidance or social securityfraud if their matter was instead litigated, may insteadget away with it;Youhave to pay an Arbitrator. You don’t have to pay a Judge.
TYPES OF ARBITRATION
Med-ArbArb-Med‘On the Paper’ ArbitrationEarly Neutral Evaluation (ENE)Complex ArbitrationShort ArbitrationSingle Issue Arbitration‘Baseball’ – Final Offer ArbitrationNo doubt there are other forms and variations of Arbitration.
BINDING CRITERIA
Theonly Arbitrations however, which have efficacy at law and are binding and enforceable, are those that comply with theFamily Law Act1975– ie:TheArbitrator is properly qualified;There is an ArbitrationAgreement (“may”, not “must”);It is consensual;It only deals with property and financial matters;The parties are afforded procedural fairness;There is an Award in writing with reasons;The Award is registered with theCourt.All other Arbitration models may be chosen by the parties and may serve to resolve their dispute, but they won’t be recognised at law; are not binding; and cannot be enforced.
RANGE OF VARIABLES
Professor John Wade has prepared what he refers to as anArbitration Abacuswhich demonstrates the range of variables that can be adopted and implemented or otherwise in any of the forms of Arbitration the parties maysettle upon:No LawyersPresent – LawyersPresent;One Arbitrator – Multiple Arbitrators;Opening Address – No Opening Address;Limited Time Opening Address – No Limit on Time;Final Address – No Final Address;Limited Time Final Address – No Limit on Time;Personal Presence;Other Party Present – Other Partly Absent;Over Phone;Documents Only;Strict Time Limit – Flexible Time Limit;Record of Proceedings Maintained – No Record of Proceedings Maintained;Minimum Cross Examination – Detailed Cross Examination;Limited Number of Witnesses – No Limit on Witnesses;
RANGE OF VARIABLES
Limited Number of Expert Witnesses – No Limit on Number;No Discovery – Limited Discovery;No Discovery – Full Discovery;Tick a Box Forms – Technical Pleadings;Limit on Pages Submitted – Technical Pleadings;Oral Evidence Permitted – No Oral Evidence Permitted;Affidavit Evidence Permitted – No Affidavit Evidence Permitted;Money Security Required – No Security Required;Limited Issue Arbitration – Complete Arbitration;Range Arbitration – Complete Arbitration;Mediation Before Arbitration – Arbitration Before Mediation;No Rules of Evidence – All Rules of Evidence;Parties Decide which Rules Apply – All Rules Apply;No Reasons for Award – Detailed Reasons;Strict Time Limit for Award – Flexible Time Limit;Oral Reasons Sufficient – Written Reasons Required;Reasons Included in Cost – Extra Money for Reasons;Orders in Relation to Costs – No Orders in Relation to Costs;
CHALLENGING AN ARBITRAL AWARD
Section 13J Family Court or Federal Circuit Court can review registeredawardsSection 13K Family Court and Federal Circuit Court may set aside registeredawardsFor some parties, the fact that Arbitration offers less opportunity for review than a judicial determination (therefore potentially more binding) is a cause for concern.Forothers, that is seen as an attractive quality and justifies the very purpose and essence of Arbitration.The reality though is that an Arbitral Award may offer more avenues for review than lawyersunderstand.
CHALLENGING AN ARBITRAL AWARD – ERRORS OF LAW
Section 13K seems plain enough.In terms of section 13J it refers to “a review of the award on questions of law”.Thedistinction between questions of law and questions of fact are not always clear and easy to blur. Errors of law can include:-Findings made on evidence, which are plainly wrong;Inferences drawn from the evidence that could not properly be drawn;Findings made without the support of any or any sufficient evidence;Findings made are not reasonable having regard to the evidence which was available.
CHALLENGING AN ARBITRAL AWARD –ABUSE OF JURISDICTION (BROAD ULTRA VIRES)
The Arbitrator will make an error of law where he or she:Misunderstands the nature of his or her jurisdiction;orTakes irrelevant considerations into account;orFails to take relevant considerations into account;orMakes a decision which is so unreasonable that no reasonable Arbitrator, properly directed on the law, could have made.
CHALLENGING AN ARBITRAL AWARD –NATURAL JUSTICE
Thethreelegs of the rules of natural justice are:Both parties must be given a hearing where their interests may be (adversely) affected by the decision;The Arbitrator must not have an interest in the case before him;andThe Award must be based on logical probative evidence.
CONCLUSION
0
Embed
Upload