Arbitration may be better than the court for the UHNW families

Date: 23 Sep 2015


Michael Drake, partner at Collyer Bristow, says mediation and family arbitration have advantages that may help protect children of the UHNW couples in case of divorce.

What precautions do UHNW individuals take to protect their children in case of divorce?

Where the spouses are international, and where the family home may move between jurisdictions, then a full understanding of the local law and procedure in relation to children issues in case of separation and divorce — or indeed attempted abduction — is important.

This is often an issue which arises in the drafting of a pre-nup or post-nup, where the parties need to be prepared to agree an arrangement in respect of children in case of problems.I recently advised on a pre-nup which was subject to Israeli law; it was important for my client to understand the approach that a court in Jerusalem would take if there were any difficulties over arrangements for any children upon divorce, and draft an agreement that details what approach to adopt.

However, it’s also true that many pre-nups and post-nups are subject to a full review upon the arrival of children, which always gives the parties a fresh opportunity to look at the issues.

What trends do you see in children and financial cases when it comes to UHNW divorces?

There is an increase in the opportunities to resolve matters in other ways than through the courts: by way of mediation, family arbitration, collaborative law, and sensible solicitor driven negotiations. This because the court system is becoming increasingly less capable of delivering an efficient and helpful service and judges have less opportunity and time to read the paperwork fully in advance of hearings. However, in the truly difficult and urgent child protection or abduction cases, the court will almost always remain the first port of call.

Is mediation on the rise in family litigation?

Yes, mediation is on the rise, because of the issues with the courts but also because new procedures now require that in most cases involving both children and finance, the parties must attend an information meeting about mediation and other dispute resolution options before they are allowed to go to the court, which may encourage them to try that route first.

What are the advantages of these alternative opportunities for the UHNWs?

Arbitration on finance is getting a good reaction from the profession as it can be far quicker, more convenient and less formal. Although you pay a fee, you save the costs that could be incurred while waiting several months for a court date.

Another advantage is that you can choose your arbitrator who is typically an experienced family barrister or solicitor known and trusted by both sides. In contrast, you never know who your judge might be and how experienced he or she might be, and whether they will have had time to read the papers in advance.

Arbitrationit is a confidential process, not open to the press and public as the courts increasingly are, which is attractive for UHNWs or high profile clients. It is also binding because the arbitrator`s decision can generally be converted into a court order with relative ease.

All these factors are making it an attractive alternative in cases where the fees can be justified, or where speed and confidentiality may be important.

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