London based solicitor firm Hodge Jones & Allen (HJA) has launches a fixed-fee arbitration service for divorcing couples. The service is aimed at providing a cheaper, faster alternative to court proceedings whilst ensuring a legally binding outcome for both parties.
In January this year Sir James Munby gave the green light for divorce financial settlements to be arbitrated in this way when he confirmed that the same principles should ordinarily govern attempts by
one party to resile or appeal from an arbitrator's award, and the same summary
approach should ordinarily be adopted by the court, as in relation to
directly-negotiated agreements (S v S (Financial Remedies: Arbitral Award)
 EWHC 7 (Fam),  1 FLR 1257
The new service is expected to appeal to middle income families for whom the value of their property is likely to be their biggest asset and can be used by both married partners and cohabiting couples who are separating. Whilst court proceedings can cost the parties involved as much as fifty thousand pounds, the arbitration fee will be a fraction of this and is expected to reduce the amount of time taken to reach a financial settlement from around a year to four months.
The certainty of outcome and procedural flexibility of the arbitration service makes it easier to streamline the level of legal work needed and to agree a timetable for the entire process. It is recognised that legal fees can run out of control in divorce cases and recently a judge went as far as to criticise the 'appalling profligacy' of legal expenditure in a case involving the breakdown of a 20-year relationship which had run to £1.3m in fees despite the amount in dispute being closer to £500,000. With fixed-fee arbitration both solicitors are acting on the same fee so there is no incentive to engage in overly detailed or litigious correspondence. This behavioural change, along with the absence of a witness box and the benefits of a neutral setting such as a hotel, makes for a less aggressive, more conciliatory process.
Toby Hales, partner and head of the family team at HJA says:
'It is clear that the court system just doesn't work for middle income families. The impact of the delays and inflated legal fees associated with agreeing a financial settlement in divorce proceedings leads either to financial hardship or an avoidance of the judicial process altogether, which results in unsatisfactory financial settlements.
Our clients needed an alternative to the court process which was taking its toll both financially and emotionally and so we have listened to their requirements and have developed a practical service that is both swift and economically predictable. For "Mr and Mrs Sensible" who are not up for a court battle it is an optimal solution providing access to a binding legal agreement with a fixed-fee and a time promise. We hope that other family law practices will sign up to offer arbitration for financial settlements to divorcing clients and that this will spark a sea-change in how separation is handled.'