‘Seismic shift’ for matrimonial finance arbitration awards

Ruling in Haley v Haley [2020] EWCA Civ 1369 last week, the court clarified that matrimonial finance arbitration awards should be subject to the same rights of appeal, using the same test, as first instance judicial decisions.

James Ewins QC and William Tyzack, of Queen Elizabeth Building, who represented Mr Haley, said the court had ‘recognised the need to align the appellate test applicable to arbitral awards and judicial decisions determining financial remedies upon divorce or dissolution of a civil partnership.

‘This represents a seismic shift in approach, and removes the last major obstacle to arbitration becoming a genuinely viable alternative for almost every couple who cannot resolve their disputes by consent.’

Until now, it has been more difficult to challenge an arbitral award than a judicial decision, which has deterred divorcing couples from seeking arbitration.

Mr Haley sought to appeal against the terms of an arbitration award made under the Family Law Arbitration Scheme. The Family Division dismissed his appeal. However, Haley successfully argued that the test for challenging an arbitration award should mirror the test set out in the Family Procedure Rules, ie that the decision is ‘wrong’.

The Court of Appeal agreed that the higher thresholds (that the decision was ‘obviously wrong’ or there was an error that ‘leaps off the page’) that make a  challenge to a commercial arbitration award so difficult cannot in fairness apply to family law arbitrations.

Mr Haley’s solicitor, Levison Meltzer Pigott partner Alistair Myles, said: ‘I am a strong advocate of family law arbitration and I hope that following this decision, more people involved in family law disputes may opt for this route, which offers many benefits over traditional court proceedings, not least speed, certainty of tribunal and privacy.

‘With the tests for challenging a decision now being the same, there is now no advantage to people using what is a sadly over-burdened court system, particularly as the courts face the challenge of a backlog of cases following lockdown.’