Arbitration in Family Law: Hayley –v– Hayley (2020)

The decision in Hayley –v- Hayley 2020 EWCA CIV 1369 was handed down by the Court and many have found the decision reached somewhat surprising. The Court of Appeal overturned a Financial Remedy Arbitration Award after the ex-husband protested that it was unfair. 

Some may wonder what is “Arbitration” and “How Does it Work” to begin with. Arbitration is a process in which parties resolve disputes outside of the Court Arena with an appointed Arbitrator. The Arbitrator is a suitably qualified person who will hear a dispute and make an award (decision). It is used to resolve financial disputes between separating couples and disputes concerning children. If the parties agree to arbitrate by doing so they agree that the Arbitrator’s decision will be binding upon both of them. Once the decision has been made the parties send to the Court an Order reflecting the outcome of that decision to have it made into a final and binding Court Order. As a result they agree that there is a very limited basis for appeal and they cannot then apply to the Family Court for a redetermination. 

Parties are represented at Arbitration either by a lawyer or someone they choose such as a Mckenzie Friend. Quite often people will consider Arbitration where their final Hearing has been adjourned last minute by the Court due to lack of availability or more urgent Hearings have to take place. Usually Arbitration is used by the parties wishing to attempt to settle matters swiftly.

In the case of Hayley –v– Hayley, the husband was not happy with the outcome arrived at by the Arbitrator, in particular the Arbitrator’s assessment of his ability to rehouse himself, the distribution of the pensions involved and Periodical Payments he was ordered to make to his wife.  He applied to the Court for an Order to set aside the award. 

The usual approach to challenging an Arbitral Award requires the person appealing to show that the decision on the question of law was obviously wrong on the facts. Yet in this case, the Court of Appeal have now come to a different conclusion. It seems now that the proper test in respect of appealing an Arbitral Award is “whether there is a real prospect of an appeal rather than the test being “no reasonable Arbitrator could have made such an Order”. Some have commented that this introduces a level of uncertainty when it comes to Arbitration which was not there previously. The question is “is this a backward step”? Most often family lawyers would explain Arbitration is to provide finality and usually most advising that contesting an Arbitration Award is unlikely to succeed. This decision suggests that it may be more feasible than thought in the past. 

Whilst some feel that this creates uncertainty, other practitioners are of the view that it is sensible to be able to Appeal a final decision when considering all of the circumstances.

For advice and assistance in relation to Family Law, contact Kelly Longmore and the team on 01908 660966 / 01604 828282 or email Family@franklins-sols.co.uk.