Divorce: It’s Time to Go Private

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Nobody plans to get divorced. However, the fact is that more than half of marriages end this way, with many people facing lengthy court battles with their former spouse, either to defend or claim what they feel is rightfully theirs.

Traditionally, in the UK, the couples who could not agree what should happen to their finances on divorce had to seek a solution through the courts which, like the NHS, is stretched to breaking point. The result is that those seeking to end their marriage and move on can be faced with a drawn-out legal process, spiraling legal costs and a lack of control over when and where their case will be heard.

And if you’re a high-profile, or particularly wealthy individual, the open courts and media interest around divorce cases is even more off-putting for anyone who wants to protect their family’s affairs from scrutiny.

Last week The Times reported the differing opinions between Mr Justice Holman and Mr Justice Mostyn, who are at odds over how much information the public should be told about big money divorce cases.

The arguments on both sides are strong: of course, the public has a right to know what is being done in their name. It is also fair to say, however, that private lives should be kept private.

What I noticed during this debate was that most people have no idea that they don’t have to go through the rigmarole and theatrics of the family courts to get divorced. There is another option for people trying to cope with the breakdown of their relationship.

In Britain, we’ve seen a steady rise in the number of people opting out of “traditional” divorces altogether. Just like private healthcare and private schools, those who can afford just a little more are starting to say no to the state court system and are instead going private. They usually end up saving money because it’s all over so much faster.

Arbitration, the private sector court system, was extended to family law in 2011 and has been confirmed by the courts as legally binding. Arbitration has for a long time been used in a commercial context by companies that prize confidentiality and wish to avoid lengthy, expensive and inconvenient litigation. Separating couples can now seize all those benefits for themselves and avoid the pitfalls of a court system.

There is some confusion, even among less expert lawyers. Some muddle arbitration with mediation, which is a quite different beast, based on couples trying to reach agreement.

Arbitration, by contrast, is a private sector court giving a final ruling in exactly the same way as the state sector court does. However, if you pay for arbitration, the legal process is based around the family and their commitments. They no longer have to be shoe-horned into a standardised court timetable riddled with delays while trying to juggle work and the demands of a family.

The couple are able to choose when and where the hearing will take place and the final settlement or judgment is kept firmly private and out of the public arena. Each party is represented by the lawyers of their choosing who argue their case in front of the jointly selected arbitrator (often a retired High Court judge).

The couple are encouraged to reach a settlement even once the arbitration has started, but if negotiations fail the arbitrator will make a binding ruling.

I acted in the first concluded arbitration in this country with a retired High Court family judge appointed as arbitrator. I have since seen a rising number of clients attracted to the possibility of a bespoke and confidential experience away from the many problems of the courts.

The benefits are enormous; including being able to impose cast-iron confidentiality. Keeping the public out of your private affairs is one of the biggest reasons to go through the private system. Another advantage is that it is fast and efficient, rather than dragging on for years of tension and anxiety. It is also the best route to an amicable break-up. You get it sorted out before things get nasty.

It’s for exactly all these reasons that I’ve got an arbitration clause in my own prenuptial agreement.

And arbitration benefits everyone, because it frees up the overstretched family court system. For every case settled in a five-star hotel or a Pall Mall club by an expert private judge, a state court is freed up for the parents fighting to keep their kids out of care or the abused partner looking for an injunction.

In fact, the only people who really don’t benefit from couples putting their cases through the fast and efficient process of private arbitration are the lawyers, who miss out on potentially years of fees, or the claim-avoiders who want to drag it all out and wear the other party down in a war of attrition.

Judges, and the government, should be cracking down. They need to ask people who can afford it why they haven’t gone into arbitration — and penalise them if they don’t have a good reason. Mr Justice Mostyn has already put his very considerable authority behind this position. There’s no excuse for a rich couple wasting everyone’s time and money going through the state courts when all concerned would be better served by them going private.

In a world where the public (and the press) are fascinated by the details of other people’s divorces, even if they are not in the public eye, it seems inevitable that the discreet and swift process of arbitration will increasingly be seen as a sanctuary for separating couples.

Getting big-money cases out of the beleaguered state courts and into the private ones is the only thing that makes sense, and lawyers need to get up to speed on this without delay.

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