What is arbitration?
Arbitration is a form of ADR (alternative dispute resolution). You cannot be forced into Arbitration. It is a voluntary process which resolves disputes identified by the parties and their attorneys. The decision on each issue is given by the arbitrator. You can choose to arbitrate all or a limited number of disputed issues in your family law case.
If you believe your case is close to settled but for one issue, the amount of alimony for example, you can choose to arbitrate this one limited issue. You can agree to limit the arbitrator’s decision to a maximum or minimum range – for example if you believe alimony should be $200 per week and the other side believes it should be $350 per week, you can limit the arbitrator’s decision to an amount in that range.
Arbitration permits the attorneys / parties to pick their arbitrator and set the rules for arbitration. After the arbitration process, which can be as formal or informal as the parties wish, there is a decision issued by the arbitrator.
Arbitration remains confidential, unlike court proceedings, except of the basic terms of the arbitrator’s decision which is confirmed by the court. The confidentiality of arbitration can be a benefit when there are allegations of unreported income or similar issues in a case.
Is arbitration of family law cases permitted in NJ?
Yes. There are two court rules which specifically address the arbitration of family law cases: R. 5:1-4 (discusses the arbitration track, and the agreement or consent order to arbitrate for cases already in court) & R. 5:1-5 (discusses the arbitration process). Rule 4:21A addresses arbitration generally.
There is a specific arbitration track in family court, which permits a case in litigation to be sent to arbitration by consent for a one-year period. This lessens the pressure of the court’s timelines.
There are certain issues which cannot be arbitrated, including entry of a final judgment of divorce and domestic violence.
Certain things need to happen before the case is sent to the arbitration track: the arbitration questionnaire must first be signed (see Appendix XXIX-A of the Court Rules); then an agreement or consent order to arbitrate must be signed. There are certain requirements for agreements and consent orders. Sample agreements to arbitrate and consent orders are provided by the courts. See Appendix XXIX-B and C.
How much control do attorneys / litigants have over the arbitration process?
Attorneys and litigants retain a great deal of control over the arbitration process. The parties decide the scope of the arbitration, what controlling authority applies, what law they are arbitrating under, whether there will be review of the arbitrator’s decision, whether the rules of evidence will apply and the overall formality of the process.
If the issues to be arbitrated are limited to financial issues, the parties have great discretion over how the arbitration will be conducted. The process will set up in the agreement to arbitrate or the consent order to arbitrate. The only exception for economic issues is that arbitration decisions pertaining to child support are required to have findings of fact and conclusions of law.
Arbitration of child custody and parenting issues requires more formality and is addressed below.
What is our recourse if the arbitrator makes a mistake?
One of the common perceptions about arbitration is that the arbitrator has absolute and unreviewable discretion to render any type of arbitration award. While parties can agree to such an arrangement if they wish, reviews can be built in by the parties in advance of the process.
For example, the parties can agree (under the UAA) to require the court to review the arbitration decision for errors of law, evidence, abuse of discretion that the parties agree, giving the court limited powers of review, thus addressing concerns of unchecked power resting with the arbitrator.
In addition, a form of appellate review by way of a designated appellate arbitrator can be done to alleviate any remaining concerns of too much power or discretion resting with the arbitrator.
Is arbitration cost effective?
Arbitration is cost effective. The speed of the process makes it cost effective. Even though the arbitrator is paid, the process can be greatly streamlined, including relaxation of evidence rules, and will take place on a condensed time frame.
Unlike arbitration, a family court trial is often spaced out over many months which requires attorneys to prepare repeatedly with only hours of trial time scheduled months apart. It is not uncommon for the family court to take years to reach a divorce or post judgment trial and then take months to actually complete the trial.
Arbitration, on the other hand, can take place on consecutive days or at least days scheduled close together to avoid the cost of preparing to address the same materials on multiple occasions.
The speed of the arbitration process is what makes it cost effective.
Can custody be arbitrated?
Custody and parenting time issues can be arbitrated. Regardless of what the parties wish, arbitration of custody and parenting time issues must be treated with a greater level of formality than other issues. Custody and parenting time arbitration must be recorded, a record of all evidence admitted must be kept and the award shall include findings of fact and conclusions of law. This level of formality is within the discretion of the parties for other economic issues. See Fawzy v. Fawzy, 199 N.J. 456 (2009).
Do the rules of evidence apply in arbitration?
Only if the parties want the rules of evidence to apply. This ability of the parties to direct how the arbitration process will proceed is what makes arbitration an attractive option to finish the divorce process quicker than if the matter was tried in the courts. The applicability of the rules of evidence would be addressed in the agreement or consent order to arbitrate.
Can I appeal an arbitration award?
Yes, to an appellate arbitrator or panel. The parties can select their appellate arbitrator in the consent order or agreement to arbitrate, along with the timelines for seeking appellate review, and the standard of review. The appellate review can be as broad or narrow in scope as the parties agree. Additional levels of review by the trial court can also be written into consent orders or agreements to arbitrate. However, if the appellate division of the superior court does not have jurisdiction, such jurisdiction cannot be conferred by private agreement of the parties. See Hogoboom v. Hogoboom, 393 N.J.Super. 509 (App.Div. 2007).
What happens after arbitration? How do I get the court to recognize the arbitration order?
Both final and interim arbitration awards can be confirmed by the court. R. 5:3-8. Arbitration award can be confirmed by the court by motion on an expedited basis. R. 1:6-3, R. 5:4-1.
Can I arbitrate issues after the divorce?
Yes. Post-divorce or post judgment issues such as motions can be arbitrated. See Faherty v. Faherty 97 N.J. 99 (1984); Johnson v. Johnson, 204 NJ 529 (2010). Confirmation of custody and parenting time arbitration awards, and to a less extent child support awards, are treated differently than other issues and require additional findings by the court. See R. 5:3-8(b)(1)-(4); R. 5:3-(c).
Which act is it better to arbitrate under, the UAA or the APDRA?
When agreeing to arbitrate, the parties must identify under what law or framework they are arbitrating.
The APDRA (N.J.S.A. 2A:23A-1) has been in existence since 1987 and was intended to expedite civil cases. Under the APDRA, there are provisions for “umpires,” as well as other sections that are geared toward civil litigation. See N.J.S.A. 2A:23A-9; N.J.S.A. 2A:23A-25 (addresses awards in excess of $20,000); N.J.S.A. 2A:23A-27 (payment of fees). There is limited intermediate review of interim awards. N.J.S.A. 2A:23A-7.
It is suggested that the preferable framework for family law cases is the UAA. N.J.S.A. 2A:23B-1 to 36. The UAA is a comprehensive but “default act,” which means that many, but not all, of its provisions can be waived or modified by consent to tailor the process to the needs and desires of the parties. N.J.S.A. 2A:23B-1, Assembly Judiciary Committee Statement.
Under the UAA, the court can grant relief until the arbitrator is selected so there is always a path to relief. An arbitrator’s discovery orders, protective orders and subpoenas will be enforced by the court. N.J.S.A. 2A:23B-17. Pendente lite arbitration awards can be confirmed by the court on an expedited basis. N.J.S.A. 2A:23B-18.
Arbitration awards can be corrected by the arbitrator. N.J.S.A. 2A:23B-20. The reasons why an arbitration award can be vacated are set forth in N.J.S.A. 2A:23B-23.
The UAA permits appeals of court orders for 3 reasons, including an order confirming or denying confirmation of an arbitration award, an order modifying or correcting an award or an order vacating an award without directing a rehearing or a final judgment entered under the UAA. N.J.S.A. 2A:23B-28.
Can an arbitrator also mediate our case?
The general rule is that the arbitrator cannot also be a mediator. The same person serving as both arbitrator and mediator is generally discouraged. However, if the parties agree, the same person can serve in both roles. Minkowitz v. Israeli, 433 N.J.Super. 111 (App.Div. 2013).