Arbitration Procedure

_MG_5336Arbitration is a very flexible process. There is no fixed procedure: the procedure for each case is developed according to its requirements.

The arbitrator will invite the parties to put forward their proposals at the outset and the arbitrator will then make directions for the procedural steps in the arbitration.

The Arbitrator will issue directions – or a timetable which sets out how the arbitration will proceed. This is both in steps to be taken and timescales.

First Steps – Choosing to Arbitrate

The first step is for the parties to complete and sign a Form ARB1CS in which they agree to arbitrate and to adopt the Rules of the Scheme. We can send you a copy.

Both parties must sign Form ARB1CS. They must sign in person; it is not sufficient for their lawyers to sign the Form on their behalf.

Do I need a lawyer to represent me?

It is strongly recommended that each party takes legal advice before entering into the arbitration agreement ARB1CS.

This is to make sure that the parties  understand the implications and effect of the arbitration process and of the Determination.In other words, to be clear that everyone understands that Arbitration is legally binding.

Also so that the parties understand that they must follow the procedure set down by the Arbitrator – and if they do not, they could be cost penalties or a determination could be made simply on the other person’s information – if they decide to opt out.

On signing the Form ARB1CS parties are asked to confirm that they have been advised as the nature and effect of the arbitration agreement.

Because Arbitration has some similarities with court proceedings, being represented by a lawyer may be the most effective way to present a case and legal arguments.

But ultimately, the answer is: No – a party entering arbitration does not need a lawyer to represent them.

For clients choosing to arbitrate through our arbitration service, we will supply templates for statements – to assist clients presenting their information in a similar way and which is focused on the issues between them and the factors that the Arbitrator will need to take into account when making their determination.

Form ARB1CS

In Form ARB1CS, the parties summarise the issues to be arbitrated. The parties can either nominate an IFLA arbitrator or invite IFLA to nominate the arbitrator. Clients choosing arbitration can approach us directly. They can sign and return the form to us and we will then send it on to IFLA for them.

The parties agree in Form ARB1CS that the arbitrator’s decision will be final and binding and that, if necessary, they will apply for a court order to give effect to it.

After the form is submitted to IFLA:

  • The appointment is offered to the arbitrator
  • The arbitrator seeks the parties’ agreement to his or her terms
  • The arbitrator accepts the appointment and the arbitration formally begins
  • The arbitrator contacts the parties with a view to progressing the arbitration, by agreement or by the arbitrator’s direction
  • Often (though not necessarily) there will then be a preliminary meeting to deal with the further conduct of the arbitration. Alternatively there might be a telephone conference.

The Arbitrator will then determine the format that the arbitration will follow.

Paper-Based Arbitration or an Arbitration Hearing

Arbitration can take place without the arbitrator meeting the parties. In a paper based format the arbitrator would make a determination based upon the statements and documents submitted by the parties. The arbitrator’s determination would also be set out in writing.

Alternatively, arbitration could take a format which includes a more formal Arbitration Hearing. The Arbitrator would meet with the parties (and their lawyers) at an agreed venue. The Arbitrator would make their determination after both parties have given evidence and answered the questions of the other party. Each will have submitted written statements in advance.

An Example Procedure for a Paper-Based Arbitration

Below is a sample directions made by the arbitrator for a paper-based arbitration:

  1. Party One is designated as the Applicant and Party Two is designated as the Respondent
  2. Both Parties shall send to the Arbitrator and to the other party their Basic Police National Computer Check Certificate by 4 PM on date
  3. Both parties will by 4 PM on date (14 days unless otherwise decided) send to the Arbitrator and copy to the other Party a sworn statement – using the statement template attached – setting out:
    1. Their case
    2. A brief outline of the facts upon which they rely
    3. The outcome that they seek
  4. Both parties shall attach to their statement any documents upon which they wish to rely.
  5. Both parties may by 4 PM on date (seven days after dating paragraph 3) send to the Arbitrator and copy to each other to a document providing their response to the statement of the other party (Second Statement/Questionnaire – using the template provided) and containing any relevant questions and/or requests for relevant information they have of the other party.
  6. If either party objects to any of the requests to answer any questions they shall send their reasoned objections to the Arbitrator and the other party within 7 days of receipt of the Response Statement. In the absence of any Reasoned Objections being raised each party will provide succinct answers and the documents requested to the Arbitrator and to the other party by 4 PM on date (normally 14 days after receipt of the Response Statement) in the form of a Third Statement. In the event that Reasoned Objections are made by one party – the other party will respond to these reasoned objections in their own Third Statement in response to the other parties Second Statement/Questionnaire.
  7. The arbitrator will determine whether any additional information/documents from either or both parties once he is in receipt of all statements that have been filed by the parties by 4 PM on date
  8. The Arbitrator may at his discretion issue further directions including the request of additional information at any point during the above procedure. The Arbitrator will notify both parties if the costs of the Arbitration will exceed any initial estimate provided by the Arbitrator
  9. Any Questions of Costs will be determined at the end of the arbitration in accordance with the Family Law Arbitration Children Scheme Rules.

What you have above is a process through which both parties have their say and are able to comment upon each other’s case and submissions – and to answer each other’s responses.

By the time the Arbitrator makes their determination they could have three statements from each party. Most relevant points would have been made in the initial statements. However each will have a right to reply.

A procedure such as that set out above also allows the arbitrator to decide that the matter is too complicated for a paper-based decision-making process in which case the arbitrator might decide to convene a Hearing.

However, if the paper-based procedure is chosen – the Arbitrator will have established through the initial contact with the parties that the issues are fairly narrow – making a paper-based process viable.

What are the powers of the Arbitrator?

Once an arbitrator has been appointed, he or she has wide-ranging powers to make decisions on any case management or substantive issues on which the parties cannot agree. In the absence of agreement, an arbitrator can, for example:

  • Rule over what matters are included in the scope of the arbitration
  • Determine all case management issues concerning, e.g., the evidence, the extent of disclosure, the need for written submissions and whether there is an oral hearing. Under the Scheme, both parties are entitled to present their case and deal with the other party’s case; this may, or may not, involve a hearing with oral evidence
  • Make interim orders
  • Decide to appoint an Independent Social Worker to prepare a report upon the welfare of the child – to assist the arbitrator in making their determination.

Is the Arbitrators determination final and binding?

Yes, it is agreed to be binding between the parties.

Arbitration has its legal footing in the Arbitration Act 1996.

In 2014 Sir James Munby, President of the Family Division, handed down judgment in the case of S v S, in which he affirmed and approved a financial award made by an arbitrator appointed under the IFLA arbitration (financial) scheme. In his judgment the President said, “There is no conceptual difference between the parties making an agreement and agreeing to give an arbitrator the power to make the decision for them.”

Following this strong endorsement from the judiciary the new Family Law Children Arbitration Scheme (‘the Children Scheme’) was developed and indeed Sir James Munby spoke warmly of the advantages of arbitration at the launch of the Children scheme.

Following recent rulings by the courts  it is expected that the Courts will generally uphold determinations made under the Scheme. An determination will be the outcome of an impartial adjudication following a recognised process – supported by the Arbitration Act – whose object is to achieve a fair result. It is expected that Courts will enforce awards made under the Scheme.