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October 09, 2023 Feature

Family Law Arbitration: An Underutilized ADR Option

Carolyn Moran Zack

Family law arbitration is expedient, reliable, and cost-effective. It allows parties to litigate their disputes confidentially, select their decision-maker and procedural rules, schedule the hearing according to the availability of the parties and their witnesses, and obtain a final decision within weeks or months. It helps to reduce conflict between the parties, promote their cooperation on parenting issues, and preserve extended family bonds. This article will answer common questions about family law arbitration, including some misconceptions about this alternative dispute resolution (ADR) option. In addition, this article will explain how the Uniform Family Law Arbitration Act (UFLAA) provides a roadmap for the proper resolution of unique family law issues and guardrails for vulnerable family law participants. The UFLAA has been enacted in Arizona, the District of Columbia, Hawaii, Montana, North Dakota, and Washington and has been introduced in Colorado, Kansas, Pennsylvania, and Tennessee so far in 2023. See Family Law Arbitration Act, Uniform Law Commission.

We have mediation, so why do we need arbitration, and is the result always binding?

Arbitration, like mediation, is a voluntary process chosen by individuals to resolve their dispute in a private forum. In mediation, the parties must come to a consensus, or they litigate. In arbitration, the arbitrator decides the dispute without court involvement. Arbitration is needed because some parties need a third party to make the decision. In the absence of state law to the contrary, parties can agree that the arbitrator’s decision is binding or nonbinding, but a nonbinding result does not put an end to the dispute unless the parties agree to the award. Several states expressly provide for parties to choose binding or nonbinding family law arbitration, including Delaware, Minnesota, Oregon, Texas, Wisconsin, and Wyoming. See Carolyn Moran Zack, Family Law Arbitration Practice, Procedure, and Forms 279–290 (ABA 2020). One advantage of arbitration is saving the cost of continued litigation, including appeals. That advantage is lost if the parties do not have a binding result. Some states permit arbitration of child-related issues such as child custody or child support. See id. Appendix F: State Laws Applicable to Family Law Arbitration (updated as of March 27, 2023) (states include Arizona, California, Colorado, the District of Columbia, Georgia, Hawaii, Illinois, Indiana, Maryland, Massachusetts (child support only), Michigan, Missouri, New Jersey, New Mexico, New York (child support only), North Carolina, Ohio (child support only), Pennsylvania, Rhode Island, Tennessee (child support only), Texas, Utah, Washington, and Wisconsin). State law typically requires a record, which will enable judicial scrutiny to ensure the child’s best interest. See id. (e.g., Arizona, the District of Columbia, Georgia, Hawaii, Indiana, Michigan, Montana, New Jersey, New Mexico, North Carolina, and Texas).

Why should we pay to arbitrate when the court will decide the matter for free?

Arbitration is an additional expense, as is any other ADR process that parties voluntarily choose to use. The parties select their arbitrator and share the hourly rates of that arbitrator. The cost savings stem from the efficiency of the process. Matters such as spousal support, alimony, property distribution, and counsel and expert fees can be consolidated in one proceeding; pre-trial conferences and hearings are scheduled quickly virtually or by conference call; and requests for discovery and interim relief are addressed expediently. The parties save thousands of dollars in attorney fees and expert fees, as well as reduce their time away from work and home obligations.

Won’t cases languish in arbitration?

Arbitration tends to be much quicker than traditional litigation. Arbitrators set and enforce deadlines for discovery, appraisals, and expert reports and schedule hearings according to workable deadlines with input from the parties or their counsel. The arbitrator’s final award is usually issued within 30 days of the hearing. In traditional litigation, it is not uncommon for family law cases to take months, or sometimes years, to reach conclusion. Trial courts are stretched thin with an increase in the number of self-represented parties. See SRLN Brief: How Many SRLs? (SRLN 2019), Self-Represented Litigation Network (Feb. 17, 2023) (citing 2012 national data from the NCSC Court Statistics Project). In the last 10 years, the number of self-represented litigants in the United States has increased dramatically; civil legal disputes are handled in more than 15,000 courts, with more than 23 million incoming civil and domestic relations cases. See id. These courts consistently report through anecdotal evidence and sampling that 75 percent or more of these cases have at least one self-represented litigant (see id.) and high-conflict litigants. Ester Rosenfeld et al., Confronting the Challenge of the High-Conflict Personality in Family Court, 52 Fam. L.Q. 79 (2019) (stating that while only an estimated 10 percent of family law disputes end up going to trial, these disputes create most of the work for the nation’s family law courts). Thus, arbitration allows for a prompt resolution of the parties’ dispute while freeing up the courts’ resources for these other important matters.

Will lawyers push their clients into arbitration where it is not a good fit for them or without disclosing their relationship with the arbitrator?

Family law arbitration is purely voluntary. Diligent lawyers will discuss with their clients the advantages and limitations of arbitration before recommending the process. The process itself can only be initiated with the parties’ written consent. Under the UFLAA, abitrators must be impartial and follow ethical rules applicable to judges, including disclosing to the parties any known fact a reasonable person would believe is likely to affect (1) impartiality of the arbitrator in the arbitration, such as bias; a financial or personal interest in the outcome of the arbitration; or an existing or past relationship with a party, attorney representing a party, or witness; or (2) the arbitrator’s ability to make a timely award. This requirement is continuing, and a party may object to the arbitrator continuing to act after discovery of an undisclosed fact or other cause for disqualification is known. The parties choose the arbitrator, who is typically an experienced and respected family lawyer. Arbitrators should also have specialized training relating to arbitration, including that offered by the American Bar Association, American Academy of Matrimonial Lawyers, and American Arbitration Association. Arbitrators are thus sometimes even more qualified to adjudicate the case than would be a judge without family law experience.

Will major decisions that affect the financial stability of families be made without a record or by arbitrators who do not explain their decisions?

The parties can specify in their agreement to arbitrate that they want a reasoned award or dispense with this requirement. The arbitrator has broad power, unless the parties agree otherwise, to select the rules for the arbitration; conduct the prehearing conferences and the hearing; administer oaths to parties and witnesses; allow any party to conduct prehearing discovery by interrogatories, deposition, requests for production of documents, or other means; determine the admissibility of evidence; subpoena witnesses or documents upon the arbitrator’s own initiative or request of a party; and sanction bad-faith conduct. Thus, the arbitrator is charged with ensuring that the proceeding is conducted fairly and with due process, like a court proceeding. Under the UFLAA, the arbitrator is also required to apply substantive family law, and to make findings or a verbatim recording of any part of an arbitration hearing concerning a child-related dispute. The UFLAA thus provides an extra layer of predictability for arbitration of unique family law issues.

Won’t the lack of a reviewing body for paid arbitrators and allowing a paid person to make decisions of such consequence call into question their impartiality?

Judges are paid by the state to make decisions, must comply with the judicial code of conduct, and are accountable through elections and disciplinary boards. Arbitrators are paid by the parties to make decisions, must comply with ethical rules applicable to the proceeding, and are accountable to the parties through the agreement to arbitrate and any statute or rules applicable to the arbitration process. The parties typically share the arbitrator’s fee, subject to reallocation in the award, so the payment does not create partiality. Parties pay other neutrals or experts, such as mediators, collaborative attorneys, and guardians ad litem, who provide a service while maintaining their professionalism. The parties choose an arbitrator because of, among other reasons, their reputation for excellence and ethical conduct. The arbitrator will not be successful if they fail to uphold these standards. Arbitration allows parties autonomy to choose the decision-maker and forum for resolving their uniquely personal family law claims, and the arbitrator is accountable to them through their agreement to arbitrate.

Won’t the parties still have to pay for a record of the proceedings before the arbitrator?

For child-related issues, the arbitrator must keep a record to allow for the trial court to ensure that the relevant law was applied, and that the award is in the child’s best interests. In all other matters, except as otherwise provided by state law, an arbitration hearing need not be recorded unless required by the arbitrator, provided in the arbitration agreement, or requested by a party. The decision whether to require a record can be made on a case-by-case basis, but in the absence of state law to the contrary or for child-related awards there is no need for a record of the arbitration hearing, because the arbitration award is not appealable.

Will the parties waive the confidentiality of child-related arbitration awards since the record will be filed with the court and the award reviewed by a judge?

Some skeptics have expressed concern that arbitration of child-related decisions will result in a loss of confidentiality of these awards. First, the arbitration hearing will be held in private; the parties may submit the arbitration award for confirmation along with a joint request that such award be filed under seal. Second, judges will not need to hear every arbitration decision de-novo. Before the judge confirms an award, they must find the arbitrator followed the applicable law and that it is in the best interest of the child. In most cases, this determination can be based on the record or findings of the arbitrator. If the court holds a de-novo hearing, this hearing itself can be scheduled as any other child-related hearing—in private if this is the court’s norm for those proceedings.

If a party is unhappy with an arbitration award, won’t this invite more litigation?

Except in those states that allow the parties to agree to substantive review of the arbitrator’s award, the bases for appeal are limited. In those few states where substantive review is permitted, parties can agree to allow courts to review an award for errors of law, substantial evidence, abuse of discretion, or such other standard to which the parties expressly agree. In other states, parties cannot seek substantive review and can only request that an award be set aside where the award is procured by corruption, fraud, or other undue means. Thus, family law arbitration reduces ongoing litigation. The UFLAA requires the arbitrator to apply the substantive law of the jurisdiction, thus adding an additional layer of predictability for these awards.

If the parties agree to a private forum for their dispute, how will they be able to obtain enforcement of their award?

After the award is issued and the period for reconsideration has passed, either party can ask the court to confirm the award. It then becomes part of the official court order and enforceable as an order. For a child-related award, this confirmation may require a hearing by the court to review the record or findings made by the arbitrator to ensure the award is in the child’s best interests. The UFLAA provides specific guidelines for review of these awards, which, upon confirmation, are enforceable as a judgment, thus reinforcing the reliability of the award.

Won’t family law arbitrators usurp the court’s authority to determine matters properly reserved for the court’s discretion?

Simply put, no. Family law arbitrators do not make awards governing personal status such as legal separation, divorce, annulment, termination of parental rights, adoption, dependency/delinquency, and incompetency. These determinations are more properly reserved for a judge who will rule after a recorded hearing with each party having the right to substantive appeal. Judges also will retain their constitutionally elected job to protect children. If state law permits child-related awards to be arbitrable, the court will provide robust judicial scrutiny of these awards. Under the UFLAA, if a party is subject to a protection order or an arbitrator determines there is a reasonable basis to believe a party’s safety or ability to participate effectively in arbitration is at risk, the arbitrator must stay the arbitration. The court will confirm that the party at risk has made an informed and voluntary decision to arbitrate and that reasonable procedures are in place to protect the party from risk of harm, harassment, or intimidation. In addition, if an arbitrator determines that there is a reasonable basis to believe a child who is the subject of a child-related dispute is abused or neglected, the arbitrator must terminate the arbitration of the child-related dispute and report the abuse or neglect to the state child protection authority. UFLAA, July 8–14, 2016, Section 12. The arbitrator may make a temporary award to protect a party or child from harm, harassment, or intimidation; on motion of a party, the court may stay arbitration and review a determination or temporary award under this section. Once again, the UFLAA provides guardrails for vulnerable participants who choose this voluntary ADR process.

Can the court properly enforce or modify an arbitrator’s award?

Judges routinely modify and enforce judgments from other states or modify and enforce agreements resulting from mediation, collaborative law practice, or negotiated property settlement agreements. In these cases, the parties agree not to go to court; there may be no discovery filed or even a listing of assets, debts, or income within the agreement itself. The court approves the settlement and grants the final divorce decree. If there is a contempt proceeding or a modification hearing, the court relies on the parties to prove their case, including violations of any award or changes in circumstances since the award was entered. Thus, the judges can still hear contempt and modification petitions of arbitration awards, even when they did not initially hear the case or rule on the matter.

Family law arbitration is an underutilized option for resolving family law disputes. With a greater understanding of its procedures and parameters, family law practitioners may be more willing to recommend this ADR process to their clients. Family law clients who are informed about the confidentiality, cost-efficiency, and expediency of arbitration may choose this process over traditional litigation. Family court judges will still be needed to confirm, enforce, and modify awards, and ensure that the awards are consistent with a child’s best interest. Family law specific legislation such as the UFLAA helps to enhance the reliability and predictability of this type of arbitration and provides protection for vulnerable family law participants.

⇾ Open the State Laws Applicable to Family Law Arbitration chart to complement this article.

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Carolyn Moran Zack

Momjian Anderer LLC

Carolyn Moran Zack is a partner at Momjian Anderer LLC, a Philadelphia-based law firm focusing exclusively on family law. She regularly serves as a mediator and binding arbitrator for divorce matters, as well as a parenting coordinator for high-conflict custody matters.