Monday, 2 July 2007

Family Law Council: discussion paper about arbitration

The Family Law Council has released a discussion paper about arbitration in property settlement matters:


The discussion paper calls for public submissions as to what can be done for people to take up arbitration, even if they are forced to go there. What s driving this, in part, is the belief that if only some matters go to arbitration then that will save the Commonwealth government money in the amount that has to be paid to appoint judges.

Here is what the report said about why arbitration has not been taken up as an option till now:

Experience of arbitration and mediation
4.17 The introduction of mediation as an optional dispute resolution method led to immediate rapid success. Despite the simultaneous introduction, mandatory arbitration and later consensual arbitration have not been embraced as normal ways of settling disputes. There are a number of reasons why these two forms of dispute resolution had such different levels of acceptance despite being first introduced into the Family Law Act at the same time.
4.18 Firstly, there were already a number of organisations in place with skills in mediation and conciliation prior to the introduction of mediation as a legislatively-sanctioned process in family law. Governments had used funding to encourage the development of marriage counselling and similar services since the federal uptake of family law responsibility in the 1960s, and individuals regarded community-based (often religious) organisations as being appropriate for mediation of family matters.
4.19 Secondly, Australian governments already had a record of providing funding to mediation bodies, such as the Community Justice Centres, and, based on previous experience of success with mediation, very quickly came to provide funding for mediation of family matters, allowing the development of full pilots and encouraging professionals to train as mediators. For example, even before the 1991 amendments, there were eight organisations receiving funding for family mediation. Funding increased through the 1990s.
4.20 Finally, parties and the courts themselves were eager to use mediation as a form of primary dispute resolution. Courts had already come to regard mediation as being an effective means of reducing case lists, particularly for simpler cases, and government support for mediation thus resonated with a growing feeling in the courts that mediation was an effective dispute resolution mechanism. As a result, mediation, when introduced, was rapidly taken up by parties even before becoming a mandatory part of the pre-trial process, as it has for children’s matters following the introduction of the Shared Parental Responsibility Act in 2006.
4.21 Arbitration faced, and continues to face, a very different situation, enjoying few of the advantages that mediation enjoyed in its early years. While arbitration is well accepted in a general commercial context, it has not been well used in the family law context. AIFLAM has conducted courses for family law arbitrators at an average rate of one per year since 1998. Since 2000, a list of qualified arbitrators has been kept in compliance with the Family Law Regulations. However, qualified arbitrators until now have had little work to do. No funding has been made available for court-annexed arbitration, and there has been a general reluctance amongst parties to go to arbitration.
4.22 This was demonstrated in a recent informal survey conducted by the Family Court of Australia. Registrars conducting case assessment and conciliation conferences collected data from a small sample of case assessment and conciliation conferences (approximately 200) across a number of registries during one month in 2006. Parties were asked if they had attended arbitration as part of their pre-action dispute resolution proceedings, and if they would consider being referred to arbitration at this point. In the sample of 204 cases, only one had already attended arbitration, although 13% indicated they had attended another similar process. 82% of the parties indicated they were not prepared to consider arbitration at this point, and none agreed to an immediate consensual referral. The reluctance to consider arbitration is likely to be due to a lack of knowledge and understanding of the process and potential benefits of arbitration. This may indicate that a well-established and credible arbitration system might attract more litigants than the current system.
4.23 There have been a number of attempts to introduce an arbitration system in family law. Despite these attempts, arbitration has continued to languish. Reasons have included a continued lack of funding, lack of recognition of arbitration as a viable option in the legal community, and a sense that the limits on review were too stringent, making arbitration a potentially risky strategy. It seems likely that without a fundamental reconstruction of the framework for arbitration the attitudes to arbitration will not change sufficiently for it to become a widely used dispute resolution mechanism. This suggests that in order for arbitration to succeed there must not only be a solid framework and community education, but there also needs to be a system which forces appropriate cases into arbitration in the pre-trial process.

Public comment ends on 13 August, 2007.

For a copy of the report, click here.

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