Arbitration and its application to Family Law matters.

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern” z_index=””][vc_column][vc_column_text]

Arbitration is an alternative dispute resolution procedure which has been possible in the Australian family law space since amendments to the Family Law Act 1975 (Cth) were enacted in 1991. It is worth mentioning that further changes where made to the Family Law Act 1975 (Cth) in 2000 and 2006 which facilitated private arbitration, and secondly so that arbitration can now only occur on a voluntary basis. However, whilst mediation is now a popular form of alternative dispute resolution in family law, arbitration is yet to be fully embraced by the legal community in family disputes.

The reason for this may be due to a lack of framework available to organise arbitration, a fear of family lawyers not understanding how it works or a lack of rollover provisions for capital gains tax. With that being said, there are very good reasons for parties involved in a family law dispute to consider arbitration due to the immense emotional and financial stress that all parties face by going through the court system. In addition to that, the family courts in all jurisdictions are facing a significant backlog where in some cases, parties waiting for final hearing dates could wait for up to 2 years and then upwards of 3 months for that decision to delivered.

What is arbitration and are there types?

Arbitration is a process where the parties to a dispute select a private arbitrator who will hear their case and be presented with their evidence before deciding an outcome. Arbitration can only occur when both parties are in agreeance that this process is suitable and cannot be forced upon people. Arbitration can be either court-referred or party-initiated. Court-referred arbitration is only applicable to matters involving (de facto relationships) and an application for an order to be made by the court must be made jointly by all parties in the matter. Party-initiated arbitration also occurs only with the consent of all parties involved but applies to cases involving arguments about financial agreements, disputes between former de facto relationships and issues regarding superannuation. Arbitration can occur relatively quickly, and a family arbitrator can issue a decision, known as a reward, within 28 days of hearing the matter.

Is arbitration suitable for my matter?

Arbitration is only applicable to family law property disputes and does not cover parenting disputes. This is because arbitration is not considered acceptable as a compulsory dispute resolution procedure for parenting cases, where mediation is considered more suitable. Family arbitration can apply to matters involving disputes about property, spousal maintenance, superannuation or financial agreements.

Benefits:

The purpose of this was to provide another avenue to divert clients away from the traditional court system and into an alternative process which could provide them with more involvement in their outcomes and save time and money. The advantages for resolving a dispute through arbitration include reducing the legal, emotional and financial costs and give the parties control over when and where they arbitrate and who the arbitrator will be. Additionally, the parties will have the opportunity to settle their dispute on their timeframe, keep their details and dispute confidential and allow them to move on with their lives happier.

The result of arbitration:

After consideration of all evidence and submissions from all parties involved, the arbitrator will make a decision based on their findings that is called an “arbitral award”. This award will only take effect once registered by the court and must be done by either party. If neither party decide to register it, then the award does not become effective like that of a decree of the court. However, once registered by the court, it becomes binding upon both parties and has the effect of court orders. If either party is not content with the outcome of the registered award, it can reviewed, but the right to review an arbitral decision can only occur on a question of law. Subsequently, if no error of law is found, the court still has the discretion to alter awards which are unreasonable or prejudicial based on various factors such as impracticability, bias, procedural unfairness or voidability.

Capital gains tax and stamp duty:

Capital gains tax rollover provisions now apply to arbitration awards in the same way that it applies to binding financial agreements and court orders. However, the exemption of arbitral awards from stamp duty for transfers between spouses is more complex. The exemption may not apply to arbitration due to section 68 of the Stamp Duties Act 1991 (NSW). This section exempts transfers pursuant to court orders, financial agreements and other agreements following the breakdown of a relationship. There is no reference to arbitration awards in this section, however, if an arbitral award is registered by court, and a document with the same particulars is issued by the court, it could be treated as a court order, which may be captured by the section 68 Stamp Duty Act exemption provision. Alternatively, parties could include a provision in their arbitration award to specify that should any issue regarding stamp duty arise, that they will agree to enter into a binding financial agreement.[/vc_column_text][vc_empty_space height=”35px”][vc_row_inner row_type=”row” type=”full_width” text_align=”left” css_animation=””][vc_column_inner width=”1/2″][qode_elements_holder number_of_columns=”two_columns” columns_proportion=”33_66″][qode_elements_holder_item vertical_alignment=”middle” horizontal_alignment=”left” advanced_animations=”no”][vc_single_image image=”310″ img_size=”full” style=”vc_box_circle_2″ onclick=”custom_link” qode_css_animation=”element_from_fade” link=”/meet-the-family/”][/qode_elements_holder_item][qode_elements_holder_item vertical_alignment=”middle” horizontal_alignment=”left” advanced_animations=”no” item_padding=”0 0 0 10%”][vc_column_text]

By Liam Chellin

Collaborative Family Lawyer

Family Property Expert[/vc_column_text][/qode_elements_holder_item][/qode_elements_holder][/vc_column_inner][vc_column_inner width=”1/2″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row]

SIMPLY SEPARATED THE PODCAST IS A RESOURCE FOR ANYONE FINDING THEMSELVES IN THE FAMILY LAW SPACE

The podcast is designed to examine divorce from a Holistic lenses. We interview guests involved in all aspects of the Family Law space including psychologists, psychiatrist, mediators, barristers and a Naturopath.

Dignified Divorce

THE WORLDWIDE #1 BEST SELLER

Read ‘Dignified Divorce’ authored by our Director and Principal Lawyer, Cassandra Kalpaxis for a complete guide to separation.

RECENT POSTS

Have you met our sister brand?

Are you or is someone you know going through a divorce? Separation is a difficult process. Divorce doesn’t need to be an acrimonious and difficult experience. At our sister brand, Detox Your Divorce, we create a tailored pathway to suit each individual family to best meet your needs.