The High Court’s decision in S v S  EWHC 7 (Fam) (S) is the first to give judicial endorsement to the Institute of Family Law Arbitrators’ (IFLA) scheme for parties to use arbitration to resolve the financial consequences of marriage and civil partnership breakdown. The significance of the decision extends beyond the case itself. Sir James Munby P’s judgment is important in four respects: first, he guides courts as to the process to adopt when considering applications made in the context of arbitral awards; second, he makes critical suggestions for future procedural innovations and rule changes; third, he directs courts as to how to weigh the substantive content of arbitral awards against section 25 of the Matrimonial Causes Act 1973 when hearing applications for consent orders and attempts to resile from the arbitral award; fourth, he comments on autonomy as the underlying theoretical basis for this substantive approach to arbitral awards.
This paper is published in (2015) 37 Journal of Social Welfare and Family Law 99-101, and available here.
Setting the record straight: family law arbitration is not binding
Dennis Sheridan’s article (13 March) on family law arbitration sets out the key benefits of the new IFLA scheme but risks being dangerously misleading in one respect, namely that ‘awards’ made under the scheme are ‘final and binding’. More worryingly, he makes this claim in relating what an appointed IFLA scheme arbitrator said to clients in the early stages of proceedings.
Just because Article 13.3 of the IFLA scheme Rules describes the ‘award’ as ‘final and binding’ subject to limited grounds of challenge and appeal, does not make it so. Indeed, Article 13.4 of the Rules recognises that it may be necessary for the parties to apply to the courts to get an order in the same or similar terms as the award/part thereof.
It is technically incorrect to say that these ‘awards’ are binding. Trite as it is, jurisdiction to make final financial awards is the court’s alone. Nuptial agreements are not binding, and arbitration is not a special case. Section 81(1)(a) of the Arbitration Act 1996 makes clear that the court’s jurisdiction is unaffected here and s25 of the Matrimonial Causes Act 1973 applies. Even if arbitrated awards were treated as akin to s34(1) MCA 1973 maintenance agreements, so as to withstand s81(1)(a) AA 1996, s81(1)(c) entitles a court to refuse to recognise and/or enforce an ‘award’ on public policy grounds. Any case in which a judge would reach a different result under s25 than under the ‘award’ should satisfy s81(1)(c).
Second, even if a judge would be unlikely to override an arbitrated ‘award’, it is misleading to describe that factual reality with the legal terminology of bindingness. We do not pretend that the agreement that forms the basis of a Consent Order is binding before the order is made, so why would we do so for arbitrated ‘awards’? Talking about ‘awards’ that are unlikely to be overridden – ‘as good as binding’? – as ‘binding’ is liable to confuse the public. Why risk litigants misunderstanding their own legal right to apply to court for a binding order? Further, religiously-based arbitrators understand their limits; why risk the public misunderstanding the nature of religious tribunals’ work? The current law is based on the concern that only the court can sufficiently protect the parties’ interests in these disputes, hence only it can make binding decisions. If we no longer think this is the case, we need to have that debate, not pretend we have already had it.
Family law arbitration may have many benefits for the right type of parties in the right type of dispute. But a ‘final and binding’ decision is not one of them.