This is a guest post from Rhys Taylor, The 36 Group. Barrister, Arbitrator, Mediator. Rhys tweets as @RhysTaylor32 and is co-editor of www.familyarbitrator.com. 

A plea to stay with me

I will admit that if I were not a family lawyer, I probably would not be bothered to look at a recently published case, snappily entitled A v A (Arbitration: Guidance) [2021] EWHC 1889 (Fam).  But stay with me, as there is actually quite a lot bubbling away in this case. One can almost sense the groaning of the tectonic plates of the family justice system hidden away behind some ostensibly dry legal arguments.

But first, some background.

What is arbitration?

Let us start briefly with the idea of arbitration. It has been used for centuries to resolve commercial disputes. Unlike mediation, where parties must come to their own agreement which the mediator helps to facilitate, an arbitration is a contractual agreement to be bound by the decision of the arbitrator. Various schemes exist which allow commercial parties to appoint an arbitrator.

Some say that the arbitrator amounts to a “private judge”. I really dislike that phrase and will tell you why in a moment.

The arbitrator will adopt an appropriate procedure to resolve the dispute. This will often involve a hearing with parties giving evidence, but it may be a more summary (condensed) procedure, involving determination on the papers alone. The parties must live with the decision, which they have agreed in advance will be binding upon them.

In England and Wales, the conduct of commercial arbitration is governed by the Arbitration Act 1996. This allows the High Court, in extremely limited circumstances, the right to interfere in the process of the arbitration. In the main, the court is a distant, avuncular figure, offering light touch supervision and support.

Even knowing that the “door of the court” possibly exists, via the Arbitration Act, may help keep some parties to good behaviour.

At it’s heart arbitration is a binding contract on how to resolve a dispute.

How does family law approach contracts?

Family law has a funny and rather tortuous relationship with contracts.

As long ago as 1929, in a case called Hyman v Hyman, the Judicial Committee of the House of Lords (what used to be the Supreme Court) were debating whether it was right, in the context of a family relationship (which may be more susceptible to all kinds of emotional pressures and coercion) for parties to be held to the terms of their formally entered into agreements, when it came to sorting out the family finances after separation and divorce.

Hyman confirmed that the parties could not exclude the jurisdiction of the court in such matters. This idea became deeply embedded in the psyche of family law and later found a statutory footing in the Maintenance Agreements Act 1957, now replicated in s.34 of the Matrimonial Causes Act 1973. This provides that any maintenance agreement seeking to exclude the right of access to a court of law will be void.

Running alongside this paternalistic attitude to family law, modern forces are pulling in another direction.

With the rise of gender equality and ideas of self-determination, courts have increasingly been willing to respect parties’ “autonomy” and uphold agreements the parties have entered into about money, even if the court might have come to a different decision.

This idea has its most prominent expression in the Supreme Court case of Radmacher v Granatino [2010] UKSC 42, which held that parties should be held to the terms of their agreement, unless it would be unfair to do so.

The state of the public justice and the need for arbitration.

You may have never attended a court in England and Wales. I have, and I am sorry to say that it is a depressing spectacle. The court estate is shabby and run down and the court is generally overrun with huge backlogs and increasingly beleaguered and unhappy judges. There is little shine of civic pride in our courts anymore.

As a practising barrister I have been to a couple of courts where I have even felt pity for the judge having to try and do their difficult job in such unpromising and sometimes wholly unsatisfactory circumstances.

About 20 years ago a family law solicitor had the bright idea to see if it would be possible to have arbitration in family cases. His assistant’s partner was involved in an ongoing commercial arbitration. He heard about how things were going over the metaphorical “water cooler chat”. ‘Why’, he asked, ‘Could this not work for family law?’

Whilst the court system was better funded back then, as time has marched on, there has been an ever-increasing need for other options than simply ploughing on in the backlog.

But how can arbitration work in the family context?

If you have stayed with me this far, you will have spotted the immediate problem. Arbitration is a binding contract which keeps the courts largely out of the process, whereas the Family Court has a long history in refusing to give determinative effect to a contract made in the family context, unless it approves of it’s contents (or since Radmacher, unless it is unfair).

There was some exploration with Government way back as to whether it would be possible to have a bespoke, statutory family arbitration scheme in England and Wales. This fell on deaf ears (although just such a scheme has been legislated for in Scotland).

After Radmacher it was clear that whilst the Family Court would jealously guard its jurisdiction to “have the last word”, it was also willing to respect autonomy and only intervene if it thought an agreement was unfair.

The promotors of the family arbitration scheme decided that their moment had arrived and in 2012 they launched a family law arbitration scheme (The Institute of Family Law Arbitrators) which would work for family cases.

Unlike in the commercial context, the family arbitration scheme expressly provides for the family court to have the last word. This was done upon the basis that family arbitrators were carefully selected and trained and the substantive law to be applied would be the same as in the courts. How could an agreement to arbitrate a dispute in such circumstances be unfair and not be upheld?

How have things developed?

As with court decisions, some parties over the years have been unhappy with the decision of a family arbitrator and so they have come to the Family Court to have a final say on what should happen.

Last year (2020) the Court of Appeal also decided in a case called Haley v Haley [2020] EWCA Civ 1369 that a challenge to a family arbitrator’s decision was going to be treated as if it was an appeal against the decision of a judge in court (where the test is ‘did the judge get it wrong?’) rather than the more restrictive forms of challenge that are available under the Arbitration Act in the commercial context.

Family lawyers, by and large, were happy with the decision, as it left parties certain about the process of family arbitration, but with a route of appeal if unhappy with the result. Commercial lawyers have looked on appalled at what one described as “family law’s exceptionalism”. Many commercial lawyers would not regard family arbitration as arbitration at all. One judge quipped “It’s arbitration, but not as we know it.”

Don’t call them private judges

An arbitrator can play a hugely useful role. The parties can appoint an agreed and trusted professional with relevant expertise in the area and, because the parties are paying for the tribunal’s time, the service is much more efficient than court.

There have been some cries that this amounts to the privatisation of family justice and this is to be deprecated. Views on this differ, as they do with private schooling and healthcare. It can also be said that if cases are taken out of the court list, there is more time to chip away at the backlog.

As noted above, however, it is unhelpful to refer to an arbitrator as a “private judge.” Judges are publicly appointed following a rigorous section procedure. They wield the coercive power of the state when required to do so. They sit before the Royal Coat of Arms.

Private individuals sitting as arbitrators, however eminent they are (or believe themselves to be) are not “private judges.”

I personally think that reference to “private judges” simply invites criticism about the privatisation of justice and is apt to lead to confusion about what a family arbitrator is doing. Under the current state of the law, they are doing no more than resolving a dispute via an adjudicative process because they have been invited to do so by the parties – and they do so subject to the scrutiny and overview of the Family Court to ensure that matters are fair.

Where does A v A fit into all of this?

That is rather a long but necessary prelude to what A v A is all about.

The facts are unimportant for our purposes.

The parties submitted to family arbitration of certain matters concerning their finances on divorce. One party was disappointed with the result and wanted to flex their newly discovered “right of appeal” that was found in the Haley case. The problem was that no-one was quite clear on the procedure to be adopted to bring the matter before the court for consideration.

Was it an application to challenge the award (the technical name for an arbitrator’s determination) to be made under the Arbitration Act (which for complex procedural reasons needs to be commenced in the Commercial Court and then transferred to the Family Division)? Or was it a “family law” application straight to the Family Court, and if so what form should that application take?

The judge decided that it was a “family law” application rather than an Arbitration Act application. The court built on a judge made procedure known as the “notice to show cause” application or, more long-windedly “a notice to show cause why an agreement should not be converted into an order of the court.”

Such applications are perhaps best illustrated in the modern case law by the case of Crossley v Crossley [2007] EWCA Civ 1491, where the thrice married Mrs Crossley tried to avoid the consequences of a parsimonious pre-nuptial agreement after a very short marriage to the very wealthy Mr Crossley. Mr Crossley made an application “to show cause” to ask for his pre-nuptial agreement to be summarily enforced without having to go through the usual, financially invasive, financial remedies’ procedure.

The twist in arbitration context is that if someone wishes to bring the arbitration before the court to be, in effect, appealed, it will usually not be the person who has “won” in the arbitration.

Imagine, for a moment, if Mrs Crossley had had her result not via a pre-nup but via an arbitral award. In that instance it would have been she who wished to make the application to court and, contrary to the situation in Crossley, she would not have been asking for the court to turn the arbitral award into an order, she would have been asking the court to not uphold the arbitral award. And this is the procedural innovation devised by the judge in the case of A v A. It suggests guidance on how to make your application to court and state whether you are inviting the court to uphold the arbitrator’s decision (traditionally known as the “notice to show cause”) or set it aside (in which event the “notice to show cause” language no longer seems appropriate).

What one finds in the case of A v A is a family judge trying to devise “family law” friendly ways in which to allow family law arbitration decisions to be procedurally placed before a family judge if someone wishes to say that the arbitrator got it wrong.

The runners and riders.

Professional case law watchers will enjoy this case for the manner in which the judge dispatches the objections made by the disappointed party.

The judge is Mr Justice Mostyn. He was counsel for the unsuccessful appellant husband, who sought to avoid the consequences of his pre-nup in the famous Supreme Court case of Radmacher back in 2010. Would the result have gone the other way if it had been the husband with the money in that case? What might have been the consequences for the law if Baroness Hale had not been the sole female Justice (and sole dissenting judgment) in an unusually large nine-judge Supreme Court?

Many imponderables, but it is doubtful whether family arbitration would have got off the ground without that decision.

Counsel for the wife in A v A is a young barrister by the name of Joe Rainer. Watch out for him. He is a talented chap with a bright future. I am sure his name will appear in many more law reports in the coming years. Counsel for the disappointed husband, Sally Harrison QC, was not the winner on this occasion, but via this challenge has made an interesting contribution to the development of this knotty and developing area of the law. Miss Harrison is hugely experienced and will live to fight another day, as must we all at the Bar.

Conclusion

A v A combines a heady mix of problems relating to the jurisdiction and procedure of the Family Court to poke around in family arbitral decisions and how to resolve a family dispute and get it over the line into a binding and final order of the court.


Feature pic : Justice Lane courtesy of Zoey White – thanks Zoey!


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