It is a well recognised fact, amongst lawyers and the community, that family law claims can be expensive and take a long time to resolve. However, there are two recent Court initiatives which are aimed at reducing legal costs and delivering a resolution of property settlement claims in a timely manner.
Family Law Financial Cases
The Family Law (Priority Property Pools under $500,000.00) Financial cases initiative is being tested in Brisbane, Paramatta, Adelaide and Melbourne Registries of the Federal Circuit Court of Australia.
The initiative is aimed at separated couples with modest assets amounting to $500,000.00 or less including superannuation and who cannot agree on how to divide it.
The first court date is held before a registrar and allows for less documentation to be filed, thereby saving legal costs (e.g. the long and detailed affidavit in support of an application for financial division is not required to be filed). The Court is likely to refer the claim to mediation or other alternative dispute resolution at the earliest opportunity to try to resolve the matter expeditiously. The aim is for the matter to be complete within 90 days.
Suppose the matter cannot be resolved through mediation or other forms of dispute resolution. In that case, a less adversarial trial or even just a hearing on the filed documents can take place.
To qualify for this process, the asset pool cannot include any family trusts, companies or self-superannuation funds which may require valuation or expert investigation. This process cannot be used where parenting orders are sought or other property orders such as spousal maintenance, child support, contravention applications or enforcement applications.
The emphasis is on resolving the matter at an early stage to save costs and time.
Arbitration
Arbitration, which is essentially the hiring of a private Judge, has been available in Family Law for a couple of decades but not often used. The Courts are now pushing for arbitration to be adopted to resolve matters in an efficient and timely manner. The arbitrators are usually family lawyers or retired Judges who have undertaken specific training as arbitrators.
Arbitration is only an option for property cases, not parenting cases, and can only happen if both parties agree.
The benefits and advantages of using the arbitration process are many, such as:
- The parties can choose the arbitrator themselves while there is no choice in selecting the person who will hear court matters.
- It allows flexibility to nominate a time and place for arbitration.
- You have substantial control over the timing and the degree of formality involved in the arbitration process. There can be an agreement between the parties on how the process for preparing documents etc will happen and how much documentation will be provided to the arbitrator. The arbitration may proceed on documents alone without the parties giving evidence, which can lead to a reduction in costs.
- It is confidential and private and avoids the need for filing sensitive documents which may contain financial matters. The hearing is conducted in private and is not open to the public. It can even be done with online videoing conferencing facilities.
- It can be used for limited issues such as spousal maintenance or determination of competing valuations.
- Arbitrations can be arranged quickly, and decisions can be available within very short periods of time (usually no later than one month after the hearing). The arbitrator is required to provide an opinion within a specified number of days after the hearing and is not paid in full until a written decision is provided.
If a matter has already commenced in Court, a Judge can refer the matter to arbitration at the request of both parties. Once the arbitrator has provided a decision, an arbitration award can be registered with the Court and has the effect of an order made by the Court.
The decision from an arbitrator can be appealed.
As a result of many trials being vacated due to COVID-19 and the inevitable delay to other claims once the courts open again and re-list trials, it makes perfect sense to use arbitration for a speedy resolution of financial matters.
