A private determination, with the force of a court order
Arbitration is a process in which separating parties agree to have their property or financial dispute decided by an arbitrator they choose, rather than by a judge on the court’s timetable.
An animated comparison of two paths for resolving a property or financial dispute in Australian family law. Family law arbitration is available for property and financial matters only.
Court process, eleven steps: Commence litigation. Prepare initial court documents. First return date. Interim hearing, if required. Dispute resolution. Mention. Compliance and readiness hearing. Trial management hearing, if required. Prepare trial material. Final hearing. Judgment.
Arbitration process, five steps: Agree to arbitrate. Preliminary conference. Preparation and evidence. Arbitration hearing. Award.
The same law, a process you shape
The arbitrator applies the same legislation and principles a court would apply to the same dispute. What changes is everything around the decision: when it happens, where it happens, how the evidence is presented, and who hears it.
The process can begin by agreement between the parties at any point, or on referral by the court. Both parties must consent — an arbitrator cannot be imposed on an unwilling party.
It ends in a reasoned written award. Once registered with the court, the award takes effect as though it were an order of that court, and is enforceable in the same way.
What can and cannot be arbitrated
Can be arbitrated
- Division of property and assets
- Superannuation splitting
- Spousal and de facto maintenance
- Financial agreements and their effect
- Setting aside a transaction made to defeat a claim
- Orders requiring a party to sign a document
- Discrete questions within a larger dispute, such as the value of a single asset
Cannot be arbitrated
- Parenting arrangements and who a child lives with
- Child support assessments
- Divorce itself
- Matters where a party does not consent
- Matters where a party cannot participate in the process meaningfully or safely
- A maintenance agreement approved by a court under the old provisions
Arbitration, mediation and court
A mediator helps parties reach their own agreement. An arbitrator decides.
Arbitration, mediation and court compared across who decides, outcome, timing, number of events, privacy, cost and appeal.
Five steps to a binding decision
Select a stage to see what happens in it.
The parties agree to arbitrate and choose an arbitrator. Where proceedings are already on foot, the court may instead refer the financial part of the matter to arbitration, with the consent of both parties. The arbitration agreement itself is settled at the preliminary conference and signed afterwards, once each party has had legal advice on it.
A short conference, usually by video, to set the shape of the process. The parties and the arbitrator settle the issues in dispute, the evidence each side will file, the timetable, the hearing format and the length of the hearing. The arbitration agreement is then settled and circulated for signature, and each party must receive legal advice on it before signing. The practitioner who gives that advice signs a statement in the agreement. Directions are made and confirmed in writing.
Each party files its material to the timetable: affidavits, valuations, expert reports, financial disclosure and a summary of the position it asks the arbitrator to adopt. Anything outstanding is raised with the arbitrator before the hearing rather than on the day.
The hearing runs in the format the parties chose, in person or by video, over the time set aside. Each side puts its case, witnesses are examined where required, and submissions are made. The hearing is private and confidential to the parties.
The arbitrator delivers a reasoned written award setting out the findings and the determination. Either party may then register the award with the court, at which point it takes effect as an order of that court and is enforceable in the same way.
Agree to arbitrate
The parties agree to arbitrate and choose an arbitrator. Where proceedings are already on foot, the court may instead refer the financial part of the matter to arbitration, with the consent of both parties. The arbitration agreement itself is settled at the preliminary conference and signed afterwards, once each party has had legal advice on it.
Preliminary conference
A short conference, usually by video, to set the shape of the process. The parties and the arbitrator settle the issues in dispute, the evidence each side will file, the timetable, the hearing format and the length of the hearing. The arbitration agreement is then settled and circulated for signature, and each party must receive legal advice on it before signing. The practitioner who gives that advice signs a statement in the agreement. Directions are made and confirmed in writing.
Preparation and evidence
Each party files its material to the timetable: affidavits, valuations, expert reports, financial disclosure and a summary of the position it asks the arbitrator to adopt. Anything outstanding is raised with the arbitrator before the hearing rather than on the day.
Arbitration hearing
The hearing runs in the format the parties chose, in person or by video, over the time set aside. Each side puts its case, witnesses are examined where required, and submissions are made. The hearing is private and confidential to the parties.
Award and registration
The arbitrator delivers a reasoned written award setting out the findings and the determination. Either party may then register the award with the court, at which point it takes effect as an order of that court and is enforceable in the same way.
Frequently asked
A mediator helps you reach your own agreement, and cannot decide anything. An arbitrator decides. If a mediation does not settle you are where you started; an arbitration always produces an award.
Before starting a court case, parties are generally expected to take genuine steps to resolve the dispute, usually mediation or negotiation. Arbitration is what you do when those steps have not produced an agreement, not a substitute for trying.
Yes. An arbitrator can only act where both parties consent, either by private agreement or where the court refers the matter with their consent. An unwilling party cannot be compelled into arbitration.
No. Arbitration in family law is confined to property, financial and maintenance disputes. Parenting arrangements and child support remain matters for agreement or for the court.
The arbitrator’s fees for preparation, the hearing and the award are shared equally between the parties unless they agree in writing to something different. That is a cost the court process does not carry, offset by a shorter run of legal costs, because the timetable is streamlined and the hearing does not move.
That depends on how much preparation and evidence gathering the matter needs, but the timetable is set by the parties rather than by a court list. Most matters run from agreement to award in a matter of months.
Where a court refers a matter to arbitration, it must be concluded within six months of the referral. A privately arranged arbitration is not subject to that limit, but should aim for the same timeframe if not faster. The real constraint is how fast the parties can get ready.
Yes. Once registered with the court the award operates as an order of that court. It is enforceable in the same way as any order.
There is no rehearing because a party is unhappy with the result. A court can review a registered award, but only on a question of law. It can also set an award aside where the award was obtained by fraud or non-disclosure, where it is unenforceable, where changed circumstances make it impossible to carry out, or where the arbitration was affected by bias or a lack of procedural fairness.
Get legal advice promptly if you are considering an application.
Arbitration depends on both parties being able to participate freely and instruct their lawyers. Where family violence or a significant imbalance of power makes that unsafe, arbitration is not appropriate, and this should be raised before any agreement is signed.
It is also not appropriate where a party does not understand what arbitration involves or what it may lead to. Where any of this applies the arbitrator must stop the arbitration. It is not a discretion.
Yes. The Federal Circuit and Family Court of Australia maintains a National Arbitration List, managed by a judge, which deals with applications about arbitrations and about awards. If something goes wrong during an arbitration, either party can go to the Court. And once an award is registered, it can be reviewed by a judge on limited grounds. Arbitration is private, but it is not outside the legal system.