An encouraging development supporting the IFLA family finance arbitration Scheme

In relation to a post-award consent order lodged at a county court, the solicitor for one of the parties requested a judicial view on the question:

‘What effect should the fact of an arbitration award have on the exercise of judicial discretion in deciding whether to approve the terms of a Consent Order.’

The Designated Family Judge of that court (who has very kindly given his express permission to quote this reply) wrote:

‘The fact of the arbitral agreement and award must have some effect on the exercise of discretion. The parties have entered voluntarily into an agreement for binding arbitration under English Law, which includes an agreement to submit any required consent application for an order giving effect to the award. It must ordinarily be the case that this must be conduct which it would be inequitable to disregard, and unless there were some vitiating factor or obvious unfairness along Edgar lines, the court should uphold the agreement, provided of course that it is drafted in terms that are capable of being an order of the court under MCA Part II.

‘In the training around the implementation of the scheme, it has been suggested that a judge invited to approve a consent order in these circumstance should normally do so unless the award was clearly outside reasonable bounds. I am aware that the consensus is that the award need not be subject to detailed scrutiny, other than to ensure that the award is workable and the court can achieve the effect of implementing the award, i.e. has the power to make it. (I am told that it quite frequently occurs that consent applications have to be returned for those reasons.)

‘It would be important for the court to establish whether there are any current proceedings, and whether a Decree Nisi had been made. If not, the court would have to return an application pending receipt of Decree Nisi.

‘It also follows that it would be important to file with the application (as the parties have helpfully done in this case) information about the arbitration award and the agreement that has led to it, together with the statements of information (Form 81)’

Comment:

This pronouncement from one county court is a very timely reassurance that the court’s approach in such a situation should be to support the award as an exercise of party autonomy, rather than to play the part of a forensic ferret and sniff out ways to unpick it.

Not every award calls for or requires a court order to reflect its terms so as to facilitate efficacy: examples may be declarations as to beneficial interests; MWPA orders as to the ownership of chattels; or an award requiring sale and specifying the distribution of the sale’s proceeds.

But other awards (and especially those made, for example, in relation to matrimonial or civil partnership situations; on a Schedule 1 claim; or on an Inheritance Act claim) can only be effective if an order reflecting the award is made by the court (for instance in the case of a clean break or pension-sharing order; or to mark that a lump sum payment has been ordered; or as a prelude to enforcement through the court in the event of non-compliance).

In many such situations it is trite law that the court’s jurisdiction to make such orders (as indeed any other form of order representing the negotiated settlement of a dispute) is subject to the judge’s discretion, which no agreement can oust.