It’s not the case that mediation is better than arbitration or arbitration is better than mediation. They are polar opposites in the dispute resolution arsenal.
Mediation is absolutely ideal for parties who are able, despite their differences, to still talk to each other and compromise a solution that they can both live with. A mediator is trained to facilitate that conversation to prevent any ‘log jams’ that often happen when parties try and speak to each other without a mediator present. Mediation relies on people being on a ‘level playing field’ and there being a residual level of trust between them so that, in a financial mediation, it is agreed what the financial landscape of the relationship was and there is an acceptance of both parties as to the decisions that have been made during the course of the marriage impacting on the future. Mediation is ideal for those parties who can then negotiate with the help of the trained mediator a way forward for themselves.
One of the key benefits of mediation is that parties are actively involved in resolving their dispute and they come to an agreement which may not be what a court would have done but they are both content with it and believe it’s workable. Parties who successfully come to an agreement in mediation are generally happier with the decisions they have made (even if they compromise) and, importantly where there are children, generally have a better relationship with their former partner which is particularly important when there is an ongoing co-parenting situation.
Conversely arbitration is ideal where parties are no longer able to speak to each other, or the playing field between them is unbalanced or there are real issues which mediation or solicitor negotiation simply couldn’t solve.
Unlike mediation, arbitration is directive. The arbitrator is looking at the problem that is presented to him or her, listening carefully to the arguments and position of both parties and then making a final determination: be it the outcome either one of the parties wanted or a compromise position or a wholly different outcome in any event.
An arbitrated award is imposed on the parties and they have no input into how that award will fall. In that regard it is very much like going to a final hearing in the court process. It’s also the case that the arbitrator may make an award that neither party are happy with or have even considered.
So whilst arbitration is a key process that assists parties when there is a real barrier to settlement between them, it does not have the same level of satisfaction that a mediated agreement, which was made personally by the parties, may have.
Arbitration can be seen as better than the court process for many reasons. If parties are unable to come to an agreement in mediation or solicitor negotiation the only way to break the deadlock between them is to take a more aggressive form of problem solving approach. This means either engaging in the court or engaging in arbitration.
Arbitration was borne out of a frustration with the court process. Like most government departments since the 2010 recession, the Court Service is critically under-funded. Courts have been closed, administration scaled back, and the court has become cumbersome and extremely slow. It takes approximately 18 months to two years for the process to fully conclude once implemented. This is a real problem because it means that whilst there is an overall dispute to be dealt with, there is plenty of time for parties to develop “side arguments” that need to be dealt with within that two year timeframe. This simply adds to the cost and the stress to both parties.
It’s also the case that you no longer are guaranteed a specialist judge properly versed in the law in which your dispute involves. So whilst you may have a complex financial argument that needs the assistance of a formidable matrimonial finance judge, as judges are selected randomly, there is no guarantee that this will take place. You may come to court and find yourself before a children’s care practitioner who has little or no knowledge of how to deal with financial matters. Indeed, as the Court Service has been so under-funded the court relies heavily on Deputy District Judges – generally solicitors who have undergone a court or training programme. Whilst the Deputy District Judges always do their level best, it is also the case that you may find your complex financial matter or your complex children matter before a property lawyer or personal injury lawyer who simply does not have the experience or tools at their disposal to deal properly with your problem.
This combination of time, cost and concern as to which judge you may get has led to the rise in arbitration and the private law matrimonial process.
The parties choose their arbitrator. That means if they have a specialist matrimonial finance issue they can choose an arbitrator whose practice is specialist matrimonial finance. Equally if there is a parenting issue, they can ensure that the arbitrator is a professional who practices solely in that field.
Time is also a key issue and advantage for arbitration. The moment you engage your arbitrator a determination is made as to when your final arbitration will be. You will discuss in your first meeting with your arbitrator the steps needed to bring you to that final arbitration and a date is set. That means arbitration can be enormously swift; far speedier than litigation. For example, if you have been engaged in solicitor negotiation the chances are that you have already undertaken all the steps you actually need to in order to have a final determination made. If you start litigating and engage the court process you need to ‘re-start the clock’ and start the process again from the beginning. This not only is frustrating but costly as you ‘reinvent the wheel’ and replicate by updating the documentation and disclosure that you have already engaged upon. Arbitration, however, can pick up at the point where you are ready to proceed. It is not unheard of for an arbitration to take place two weeks after the arbitrator has been engaged simply because the parties were ready for that process to unfold.
What it does mean is that if you’re further advanced you can very quickly take those steps to get you to arbitration and if you are not fully advanced at all, then those steps can swiftly be ordered. By and large in arbitration, financial matters can be dealt with within a three month window. Children matters, particularly those issues that need a swifter determination, can be dealt with in a much shorter timeframe if possible.
So even though you pay for your arbitration, there is generally a significant costs saving because you are not reinventing the wheel or having to wait for so long to have this issue resolved.
It’s also the case that arbitration is much more bespoke to you. As a couple you are not bound by the archaic court process; rather, you can set out for your arbitrator how you wish the process itself to be dealt with so it can be as informal as you like. Hopefully this means that, whilst there is an actual live dispute between you and your former partner, once determined, you will both be able to move on and have a better relationship with each other. This is particularly important if you have children and need to continue to co-parent.
It is also the case that arbitration is quicker so if you were set down for a four day final hearing you may find that, actually, that is a one or two day arbitration.
What arbitration means is that you get a swift decision that is as binding as the court’s, by an arbitrator who is an expert in the area of your dispute. It enables all parties to get on with their life without having the terrible 18 month to two year delay in gaining a resolution.