Wealthy couples turning to arbitration to settle divorce disputes

May 7th, 2012

An increasing number of wealthy couples are turning to new arbitration schemes to settle divorce disputes rather than squabbling in public through the courts, reports suggest.

It is claimed that arbitration – frequently used in commercial and civil disputes – is being increasingly used to handle financial disputes arising from divorce.

Lawyers say the scheme is likely to attract “super-rich” couples bickering over “big money” divorce settlements who want negotiations carried out discreetly.

It is also understood the be a popular avenue in disputes about ownership of property between cohabiting couples and civil partners and so-called “schedule one claims” – maintenance orders relating to a child born to parents who have never married.

Some 40 lawyers have already trained to be arbitrators for the service launched by the Institute of Family Law Arbitrators, and there is a waiting list of lawyers wanting the training.

Marilyn Stowe, senior partner at Stowe Family Law, told the Financial Times that she thought the scheme would be attractive to two groups of people.

“Those who are in big money cases who can circumvent the waiting period in the courts and also are prepared to pay the fees of the arbitrator to have the benefit of privacy.”

She added the second group could include litigants who might want an arbitrator to decide the case or a specific point.

“Arbitration is tailored to the couple and we do not have to go through the entire process which we do in court. If you do not need a hearing, the arbitrator can decide something on paper. It’s more informal and quicker,“ she said.

James Pirrie of Family Law in Partnership, a team of specialist family lawyers, said he envisaged a big take-up for arbitration cases.

He said: “Court queues are growing – meaning longer delays and more costs for those going to court. That increases the pressures on judges, who have bigger caseloads to manage and less time for each case and there are inevitable stories of bad outcomes.”

“That means that appeals are likely, leading to an even longer process and a greater likelihood of loss of privacy as the media become involved.”