29/02/2012 12:27 GMT | Updated 29/04/2012 06:12 BST

The Arbitrariness of Arbitration?

Last Wednesday saw the launch of the family arbitration scheme. The scheme allows separating couples to appoint an arbitrator from a panel of barristers and solicitors to resolve family disputes. The rationale for the scheme is that arbitration is significantly quicker and cheaper that litigation. For celebrities and the very wealthy, there's the added advantage that, whilst the media can now sit in and report on hearings in the family courts, arbitration is conducted in absolute privacy.

Any alternative to traditional litigation in the family law arena is to be welcomed. Relationship breakdown affects countless numbers of people each year but there simply aren't enough courts and judges to deal with the number of disputes that are litigated in the family courts. As a result, families are often left in limbo whilst their cases move at a glacial pace. Typically it will take 18 months for a financial dispute following divorce to come on for trial. In addition to the emotional cost that results from family litigation, the legal costs can be significant. 18 months of lawyers' bills will be a strain for all but the wealthiest.

But the family law arbitration scheme isn't without significant problems. The scheme is a joint venture between the Chartered Institute of Arbitrators, the Family Law Bar Association and Resolution (an association of solicitors specialising in family law). The rules governing the scheme have been drawn up by the participants rather than any parliamentary or regulatory body.

Under the terms of the arbitration agreement, the parties agree that the arbitrator's award is binding on them. Without primary legislation, however, it is doubtful whether any award made in arbitration can be fully binding. Whether or not the award is binding it will still need to be subsequently approved by a judge. And where there are children involved there is a real risk that the courts will still have to intervene following an arbitration, particularly if the award fails to take into account the financial needs of the children and their primary carer.

Another concern is that arbitrations will be conducted by specialist barristers, solicitors and part time or retired judges. Presumably the appointment and conduct of the arbitrators will be regulated by the Institute. However, unlike the judiciary, the scheme offers no independent organisation that is mandated to investigate complaints about the arbitrators' appointments process or where allegations are made concerning the arbitrators' conduct.

The most significant issue, however, is whether there will be much of an uptake for arbitration as an alternative to litigation.

In the commercial sphere, where arbitration has been particularly successful, parties will contract into arbitration when they negotiate the terms by which they are conducting business.

In the family arena, the only opportunity to agreeing arbitral resolution in advance is through a pre nuptial agreement. Whether there will be much of a take up rate for couples to agree in advance to contract into mediation is debatable. I doubt there will be until arbitration has become firmly embedded in the culture of family law.

What's more, the vast majority of separating couples don't enter pre nuptial agreements anyway. These couples will have to agree at the point of separation to resolve their dispute in arbitration.

But in the absence of both a statutory regime that makes arbitration binding and a proper regulatory scheme for assessment, appointment and ongoing training for family arbitrators, would any lawyer advise their client to arbitrate rather than litigate? I doubt it.

Opportunities to avoid litigation should always be encouraged and arbitration may well prove to have a significant part to play in the resolution of family dispute. However careful management and proper regulation is essential for the scheme to succeed.