Arbitration

A viable alternative to Litigation is Arbitration. This is extensively used in the building and construction industry. In the 1980s and 1990s, Arbitration was also used in family law matters. There were disadvantages under the legislation at that time in using Arbitration and its use diminished. The Family Law Regulations were amended in 2001 which overcame the earlier problems associated with Arbitration. The amendments to the regulations allowed the registrations of Awards, which meant that either party could registrar an Award without the consent of the other party and it would still be binding on both parties. Before the amendments were made if an Award was made by the Arbitrator and one party disagreed and did not give consent to the registration of the Award then the Award could not be registered and was not binding. After the amendments to the Regulations, the Awards now are binding even though one party may not give consent to the registration of the Award and the Awards become a binding Order of the Court.

There is now an obligation on solicitors to advice clients of the means of resolving their difficulties by way of Arbitration. There is a requirement to provide to clients a brochure titled, Marriages Family’s and Separation which deals with this and provides details of Arbitration.

The only limitation placed on Arbitration is that it cannot deal with child support issues and is unable to make binding Orders in regard to a child’s welfare. Parenting matters can be discussed, during the course of Arbitration and an agreement may be reached by the parties in regard to such matters. The parties if they reach agreement on parenting issues during the course of Arbitration can have that agreement set out in a Parenting Agreement or can apply to the Court for Orders to be issued by way of Consent Orders. The Award of the Arbitrator if it is to be registered with the Court and to issue as a binding Agreement, is limited to property settlement and spousal/defacto maintenance issues.

Laurence Boulle, Professor of Law, Bond University QLD, in a newsletter published in January 2014 set out the following information in regard to Arbitration:

The Arbitration procedure is underpinned by an agreement between the parties arbitrator. This arbitration agreement sets out and determines:

• Appointment of the arbitrator;
• Issues for determination;
• Form of the arbitration;
• A timetable;
• Procedure for the arbitration;
• Whether or not the rules of evidence will be applied;
• Receipt of evidence from other sources, e.g. experts and documents;
• Default procedures and the circumstances in which the arbitration can be terminated;
• costs of the arbitration, including payment of disbursements and the responsibility for payment of those; and
• Any other matter the parties may feel is relevant.

• ‘papers’ only arbitration;
• Representation of parties;
• Oral evidence or affidavit only;
• No, limited or full cross-examination;
• No, limited or full disclosure;
• No, limited or full pleadings; and
• Opening and closing addresses.

There are a number of circumstances where the Court can be called upon to assist in the conduct of an Arbitration – apart from the general power to make Orders to facilitate the Arbitration.

One instance is the ability of the Arbitrator to refer a question of law arising in the Arbitration to a judge for determination. Another example arises in circumstances where, in the course of a Court-referred Arbitration under s19D, a party does not comply with a procedural direction or, in the view of the Arbitrator, does not have capacity to participate in the Arbitration.

A third example of assistance provided by the Court relates to the ability of a party to apply to the Court for the issue of subpoena to attend and/or produce documents at the Arbitration. This subpoena has the same validity and effect as any other subpoena issued by the Court.

REGISTRATION, ENFORCEMENT AND REVIEW OF AWARDS

Once an Award has been handed down in the prescribed form, either party can apply to the Court for registration of the Award. The other party then has twenty-eight (28) days to object to its registration. Upon registration, the Award has the same effect as if it were an Order of the Court and can be enforced in the same way.

Pursuant to the provisions of the Family Law Act and the Family Court Act, the Family Court can:

1. Review an award on questions of law; and/or
2. Set aside an Award on the grounds that:

• The Award was obtained by fraud (which included the non-disclosure of a material matter);
• The Award or agreement is void voidable or unenforceable;
• Since the making of the Award, circumstances have arisen which make it impracticable for the Award or parts of it to be carried out;
• The Arbitrator was affected by bias or there was a lack of procedural fairness in the Arbitration.

Professor Boulle states in his newsletter; “By limiting a review to a question of law only, the legislation arguable gives Arbitration Awards less potential to be overturned than a judge’s decision.”

Not all matters will be suitable for Arbitration. Solicitors acting for the parties would need to determine if the matter would be suitable for Arbitration and whether the parties would accept an award made by the Arbitrator which then becomes binding if registered with the Court. However, the costs saving of proceeding by way of Arbitration are considerable.

Peter Baston a respected Barrister, who is a qualified Arbitrator, recently published an Article and gave details of his costs for conducting an Arbitration.

These costs are published below:

Schedule of Fees 2016 (as at 1 March 2016)

The comparison in fees is significant, in litigation the matter could take up to 2 years or even longer for a matter to go before the Judge and for a decision and Judgement to be delivered by the Judge hearing the matter. The costs to each party could exceed $50,000.00 and more likely more for the conduct of a matter to the stage of Trial and for the Trial. This creates a great deal of emotional and financial stress for the clients.

On the other hand, Arbitrations can be dealt with speedily and within a matter of weeks or months with considerable cost saving and less emotionally stress. The matter can be dealt with speedily.

In view of the amendments which have now been made Arbitration is a highly effective way of reaching a quick and satisfactory resolution of family law matters.

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