Alternative Dispute Resolution: benefits and use during (and after) the COVID-19 crisis

The impact of COVID-19 on separating families and the delays in the courts, has highlighted the benefits of ADR. We look at ADR options and how they work

17 July 2020

Over the last 20 years, Family Law has seen a gradual but noticeable increase in the use of Alternative Dispute Resolution (ADR) as opposed to formal court proceedings, in order to resolve divorce and financial remedy proceedings.

Recent months have seen this shift in approach rapidly accelerated due to the unprecedented impact caused by COVID-19. As the courts have switched to remote hearings, reduced their staff or closed entirely, many practitioners have sought out methods of ADR in an attempt to progress and resolve proceedings and mitigate the delays caused by COVID-19.

Given how effective ADR can be in the right case, it is likely that in a post COVID-19 world we will see a continued increase in the uptake. There are several different forms of ADR and some will be more suitable to certain cases than others.

Mediation

If both parties agree, they can see a specialist family mediator to assist in reaching an agreement. The process usually involves meeting the mediator separately initially, and then having joint meetings where the mediator helps to resolve the issues in dispute. The mediator must remain impartial and cannot give legal advice, and it is common for each party to take advice from a legal adviser in the background as this process progresses.

If an agreement is reached, the mediator will draft a Memorandum of Understanding, which sets out the agreement but is not enforceable. Each party may subsequently take independent legal advice on the agreement reached with a view to drawing up a binding agreement or order.

There are many benefits to mediation. It avoids the costs and the stress of litigation, and instead allows the parties a private route to reach settlement. It also encourages both parties to fully present their point of view and concerns to each other, or through the mediator, which can be non-confrontational but still the most direct and effective way for one party to express their position to the other. Mediation can also be used for issues relating to children and finances at the same time, whereas there would need to be separate court proceedings (although they could run concurrently), and seeks to reduce conflict for the parties which could have an adverse impact on the children. This is advantageous because parties may be less likely to be able to reach an amicable agreement regarding children if they are involved in contentious court proceedings regarding their finances.

During the current pandemic and weakened economy, mediation can be an attractive alternative to entering into proceedings through understaffed and partially closed courts, which once they fully reopen will have a backlog of new cases to hear. Mediators will usually accommodate parties over video link so there is no need to visit their offices.

Collaborative Law

This is a process where each party instructs a specialist collaboratively trained lawyer. The clients and their lawyers then sign up to a 'Participation Agreement', agreeing to cooperate in the divorce and in reaching a financial agreement, and to work within the principles of the collaborative process.

The exchange of information and negotiations takes place largely in meetings. Both parties and their legal representatives will agree to a number of meetings, however the parties themselves will control the discussions and negotiations, with the lawyers recording any agreement they reach. The solicitors will not engage in correspondence or negotiations before the meetings and are there for legal advice and guidance.

The benefit of the collaborative process is that as the parties control the negotiations, they can agree on an outcome which is beneficial to the whole family. Like mediation, it can reduce the costs, stress and animosity of court proceedings, and be carried out in accordance with the parties own timetable. Unlike mediation, the parties will have lawyers present and will be directly negotiating with one another.

The collaborative process will only be suitable in some circumstances, and will depend on how the marriage broke down and the level of trust existing between the parties. If an agreement cannot be reached, the solicitors have to stand down and both parties have to start again with new lawyers. There is also the cost involved and the lack of any guarantee an agreement will be reached.

Private FDR

A Financial Dispute Resolution hearing (FDR) is the second court hearing in financial remedy proceedings. It involves the parties trying to negotiate a settlement, with the assistance of a judge. The judge cannot impose a decision but will hear arguments for both sides and look at the evidence, and will give an indication as to the order they would make if it were a final hearing. The parties are then encouraged to use this to reach a settlement.

Private FDRs work in the same format as court led FDRs, but they are not conducted by the courts. The parties instead pay for a financial remedy specialist to act as a ‘judge’. That person may be a solicitor, barrister or retired judge. The parties decide between themselves whether the cost of the ‘judge’ is split between them or met by one party.

The private FDR can take place at any time, even without court proceedings. If there are court proceedings, the private FDR can be used in place of the court FDR. The hearing will usually take place at one of the solicitors’ offices or in barristers’ chambers and there will be separate break-out rooms for the parties to have discussions with their legal representatives. In the same way as a court FDR, the judge will give an indication as to the likely out outcome at a final hearing and will assist the parties’ negotiation in any way they can.

There are many benefits to the Private FDR over a FDR through the courts. The parties will choose the Private FDR judge so can select someone with the relevant expertise to the facts of the case. The judge will have much more time to prepare and review the papers in detail, as they will not have the time constraints of a judge in the courts, and unlike a court judge, will not have any other hearings in the same day to fit in. The judge will also usually be available for as long as the parties need them on the day to help facilitate a settlement, rather than only having a short period of time to hear the matter. A private FDR can also feel much less daunting than a court led one and the parties can arrange it at their own convenience, rather than it being determined by the court.

The disadvantage to a Private FDR is the cost of the judge and the fact that the judge will not have the power to make directions in the court proceedings if the case does not settle.

In recent months there has been an increase in the uptake of Private FDRs due to court hearings being cancelled or delayed. Private FDRs can take place remotely and it is likely they will continue to be used where possible even when courts fully reopen.

Arbitration

Arbitration is a private dispute resolution process where the parties jointly appoint an arbitrator (a specially trained, independent third party) to resolve the dispute. Arbitrators are usually specialist family solicitors, barristers or retired judges.

The process can be adapted to suit the parties’ needs. The parties can choose their arbitrator, which issues need to be decided, and the time and place for the arbitration. Arguments will be put to the arbitrator in much the same way as they would to a judge. It is important the parties have legal advice in the background, as the decision of the arbitrator will be binding. This decision will need to be converted into an order and approved by the court.

The main advantages are that it is often quicker than the court process and it is conducted in private. As with a Private FDR, an arbitrator with suitable expertise can be chosen and will be able to review the papers and understand the case in more detail.

Unlike with the court process however, the parties will need to pay for the arbitrator and both parties must agree to use the process. Whilst the arbitration agreement is binding, it will still need to be submitted for the court’s approval (though this is just a formality and in the overwhelming majority of cases does not raise any issue).

Arbitration has been particularly useful during the COVID-19 outbreak as an alternative to final hearings, where the courts have simply not had the resources to deal with hearings lasting 3 or 4 days in some cases. It has meant parties have been able to list a remote private final hearing at their own convenience in order to reach a resolution, rather than having to wait an uncertain period of time for court resources to increase once again.

Conclusion

As lockdown restrictions ease and we start to see a move towards normality, both in terms of everyday life and the operation of the courts, it will be interesting to see whether the current trends in the use of ADR continue. What can be said with certainty however is that over the last few months, many more practitioners and clients have turned to ADR out of necessity, and will no doubt have experienced the benefits of these methods over the court system.

For more information on how the COVID-19 pandemic is affecting Divorce and Family Law, please see our FAQ article.

If you would like to discuss any of the issues raised in this article, or discuss ADR options, please contact Richard Handel or your usual Family Law and Divorce contact.

The article was co-written by Michael Finnegan.

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