HCR Law Events

13 November 2020

Arbitration, a fight against the backlog

As a result of the Covid-19 pandemic, courts have seen a significant backlog in cases, especially in the family court.

To avoid delays, out of court methods such as arbitration and mediation are becoming increasingly appealing to parties to resolve their disputes. But what happens if the outcome is significantly wrong and, if wrong, where does it leave the parties?
Lady Justice King’s recent ruling has confirmed that an arbitration award can be overruled if deemed to be unjust.

In the case of Haley v Haley [2020] EWCA Civ 1369, an appeal arose from an arbitral award made by Mr Howard Shaw QC in connection with financial remedies. The husband believed that the award made was unfair. He therefore made an application to the High Court seeking to appeal, or for an order to be made by which the court would decline to make an order under the Matrimonial Causes Act 1973 in the terms of the award and would instead exercise its discretion anew.

The appeal raised important questions as to what test should be applied when one party declines to consent to or challenges the making of an order under the Matrimonial Causes Act 1973 regarding an Institute of Family Law Arbitrators Scheme arbitral award.

The judge held that the proper test is “closely aligned” to that provided under the stringent terms of the Arbitration Act 1996, unless there has been a supervening event or a mistake. The husband’s appeal was allowed, and the matter was remitted for a case management hearing before a circuit judge.

Lady Justice King said in her ruling: “It goes without saying that it is of the utmost importance that potential users of the arbitration process are not deterred from using this valuable service; either, on the one hand, because the outcome is not seen as sufficiently certain or, on the other, because arbitration is regarded as providing no adequate remedy in circumstances where one of the parties believes there to have been an unjust outcome.”

Could arbitration be the way forward for parties wanting to avoid significant delays within the court system? The recent ruling has provided some security that parties may not be bound by unjust awards and that arbitration plays a valuable part in the justice system.

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About the Author
Nathalie Payne, Chartered Legal Executive (FCILEx)

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