How does Divorce Arbitration Work?

Going to court is not the only available method of resolving a family law dispute.  If parties are not able to reach an agreement in a contested matter, they can also pursue mediation or arbitration of their case.  While many people are somewhat familiar with the concept of mediation—where a neutral third-party attorney, the “mediator,” assesses the facts and circumstances of the matter and attempts to broker a mutually acceptable resolution in a non-binding setting (i.e., the parties do not have to accept the mediator’s recommendation)—arbitration is less well known.

Arbitration, like mediation, is a court-approved and favored means of dispute resolution, the purpose of which is to address and resolve a disagreement or conflict between parties outside of the court setting.  As with mediation, a neutral third-party attorney weighs the available facts and evidence.  However, unlike mediation, this “arbitrator” (the word, like many legal terms, has its origin in Latin, and means an individual who “decides” or “judges”) has the authority to make a decision that, subject to certain narrow exceptions, is binding upon the parties.  Essentially, the arbitrator is a judge minus the flowing black robe and the gavel.

Arbitration has many benefits: it is relatively speedy and inexpensive compared to proceeding with a case through the court system and it offers a more informal setting which many litigants find less nerve-wracking and anxiety-inducing than that of a courtroom.  Instead, the parties will find themselves in the office of a private attorney, addressing their issues at a conference room table rather than before a Judge’s bench.  However, parties must understand that the binding, final nature of an arbitrator’s decision is very difficult to overturn in an application to the court.  For an example of the great weight that an arbitration award carries with the court, one need look no further than the Appellate Division’s recent decision in Curran v. Curran.

In this case, a divorcing couple agreed in writing to arbitrate issues arising out of their divorce.  The parties proceeded to arbitration and the arbitrator entered a final award which was favorable to the wife.  Unhappy with the arbitrator’s award, the husband filed a motion with the court for reconsideration of the award, asserting that the arbitrator had mistakenly applied the law and asking that the entire agreement be overturned due to a clause that had been inserted into the parties’ written arbitration agreement which the husband claimed was illegal.

Despite the court’s agreement with husband that the arbitration agreement contained an illegal clause, the court nevertheless enforced the arbitration award.  The court reasoned that, as the illegal clause did not affect the enforceability of the agreement (the clause dealt with the parties’ right to appeal the award to the Appellate Division), it would honor the otherwise valid agreement.  The court explained that it had been the clear intention of the parties to reach a final resolution of their divorce litigation through arbitration.  As there was no wrongdoing on the part of the arbitrator, the court had no reason to deviate from the strong presumption in favor of upholding arbitration awards.

The court’s decision in Curran, and the reasoning behind it, is very important to keep in mind for any individual who is considering arbitration.  Simply put, parties who choose to arbitrate must be aware that, aside from exceptional circumstances (including corruption, fraud, bias on the part of the arbitrator, or the arbitrator not conducting the arbitration in the required manner), arbitration awards will almost always be upheld by the court.  Therefore, a party should never expect that, if they do not like the arbitration award, they can simply ask the court to modify or overturn it.  As a result, it is crucial that any party proceeding to arbitration prepare with their attorney for the arbitration as thoroughly as they would if they were going to trial, because in all likelihood the buck will stop with the arbitrator.

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