781.708.4445

info@levinedisputeresolution.com

Divorce Mediation Blog

Mutually Acceptable Solutions can be Reached through Family Mediation

Wednesday, April 04, 2012

Family decision-making can be very difficult, and sometimes situations get out of hand. When perspective becomes scarce and it is hard to see the forest for the trees, whether it be an elder care matter, a dispute over a will, a divorce, attempting to prevent a divorce or difficult parenting situation, it can be the right decision to bring in mediators or arbitrators.

Family mediation means that a neutral, trained professional will work with the parties involved in the family conflict to discuss all of the issues and to explore the possible options for settlement, and to identify solutions that best meet the needs of all persons involved. Facilitated negotiation is the path to resolution.

Mediation is a voluntary, confidential process in which we help both or all parties to identify and discuss issues of mutual concern. Together we will explore various solutions and develop a settlement that is acceptable to all or both of the parties.

Sometimes parties need mediation followed by arbitration, because resolution by agreement proves elusive. We call that Med/Arb. This is a confidential process in which we help both or all parties to identify and discuss issues that of concern. It is our job to help all parties explore various solutions and decide on a settlement with which all concerned can live. If the mediation does not succeed, we “switch hats” and make a decision for the parties, out-of-court an in a timely and cost-effective way.

 

Divorcing Parties Playing Against Type - Don’t Do It

Wednesday, April 04, 2012

Recently, we spent a Sunday evening at a new Easthampton, MA business: a “free movie” venue called “Popcorn Noir”. This creative venture offers gourmet popcorn, snacks, dinner, hot cider; and intimate seating for 20 or so lucky viewers. Members pay a modest annual fee to have access to this storefront treasure with vintage films.

We watched the Billy Wilder-directed Fred McMurray and Barbara Stanwyck classic “Double Indemnity”, from 1944. A film student introduced the show with the comment that one thing that made this noir piece so effective was that every actor played “against type”. For those of us who grew up with McMurray on “My Three Sons” (most of us) knew exactly what she meant. She also described the coming feature as a tale of three people enmeshed in a spiral of events of mutual destruction, leaving them all dead.

This all got me thinking (after the show) about divorce mediation! Divorce lawyers like to tell prospective clients that criminal lawyers see bad people on their best behavior while family law clients are “good people at their worst”. This cliché is largely geared towards providing cover to the upset spouse for out-of-control feelings and decisions, but there is also truth to this stereotype. Many people react to the crucible of stress, worry and fear of impending divorce in ways that lead them to make quick decisions that yield far-reaching and long-term effects on families, sometimes quite negative. As friends and family urge the spouses to “protect” themselves (and their children) from each other, they are often inclined to accept the most aggressive lawyers and advice, and the most assertive processes that they can find..

Sometimes this advice is absolutely on the mark, and there is no good choice but to lawyer up and get to court. But, too often, this just sets a tone of heightened confrontation, crushing costs and lost years of litigation, when calm reflection and facilitated discussion might serve the family more effectively, leaving people in a place where their ability to cooperate is less damaged and sometimes even enhanced. There is a reason that the Massachusetts Supreme Judicial Court requires lawyers to discuss alternative dispute resolution options with clients before filing suit,. But we suspect that this rule is honored far more in the breach that in its careful and enthusiastic observance, as many lawyers perceive litigation as the “only way” to go.

Good people in crisis should not play against type. Beginning divorce with an arms race when unnecessary consigns the family to a spiral of controversy and financial calamity, when reflection and facilitated negotiation are likely to be less expensive, less antagonistic and more constructive than the alternative. Divorce does not have to be all noir. It can be seen as a transition: to be managed and experienced as an honest, direct and personalized process in which people “play” themselves, and not the mythical “worst behavior” caricature.

Mediation is not for everyone. But, almost everyone should at least consider it – seriously.

 

What is Arb-Med?

Wednesday, March 28, 2012

We have discussed arbitration, mediation and the variant, “med/arb”, in previous blog posts. Med/arb is a process in which an impartial party attempts to facilitate negotiations that will hopefully lead to a resolution of disputes between or among them. If the negotiation fails, then the mediator switches “hats” and makes a decision for the parties as an arbitrator, to which the parties are generally bound. Recall that one of the perceived problems with med/arb, is that people worry that information that comes to a mediator in a confidential process that encourages candor and positional risk-taking, may result in an arbitrated result based on information that may not otherwise have come before the arbitrator, had not he/she been privy to the mediation first.

Arb/med solves this problem. First, the disputing parties offer evidence (information) to the neutral acting as arbitrator at whatever level of formality that the parties themselves have agreed to use. The arbitrator makes a decision, but does not disclose it to the parties at this point, and hopefully never will, because the arbitrator puts that arbitration “award” into his/her “pocket” and then changes hats, this time to that of a mediator. He/she then works with the parties in an effort to facilitate agreement between them. The mediator has not been at all influenced by relaxed disclosures before the decision is written, and the award will not change by what occurs in the later mediation.

If the parties then settle their matter, the arbitration decision has no legal significance, and the parties will never know the result, unless they agree for reasons other than legal impact, they agree to have the arbitrator-turned-mediator disclose it. At Levine Dispute Resolution Center LLC, we see this hybrid process having great merit in those cases where the parties either want or need to know that their dispute will end expeditiously, privately and cost-efficiently, even if they cannot settle it themselves; but they are unwilling to do that until that have a good faith and sincere effort to maintain control over their own controversy by making the full effort of negotiated settlement, first.

 

Why don’t we represent individual clients?

Monday, March 26, 2012

As we have transitioned from private law practice (Bill Levine) and as a sitting judge (Chouteau Levine) to doing full-time work as mediators, arbitrators and other neutral roles only with Levine Dispute Resolution Center LLC, many people continue to ask us to take on engagements that are representational in nature. For example, several lawyers and clients from one side of a case have asked us to consult on issues presented by a court-based controversy. For another, we have been asked to represent children in court.

We have declined all of these potential roles.

True, none of these jobs would place us in a position to represent a spouse who is an essential stakeholder to litigation issues. But, by their very nature, these jobs imply something that we are not anymore: practicing lawyers whose job it is to “advocate”. Even a private consultation is a form of advocacy, because we are helping one party or another figure out strengths and weaknesses in his or her case, for the purpose of either honing trial preparations or clarifying/enhancing negotiating positions, to the detriment of another party or parties. Thus, the engagement is neither impartial nor it is neutral. Similarly, representing children is a form of advocacy for a particular point of view, even if the represented party is not “responsible” for causing the conflict.

At LDRC, when we mediate, we see it as our mission to open the minds of the parties to see each other’s points of view, to encourage introspection about one’s own real needs, and to detect where mutual needs and priorities intersect. Then, we try to promote sincere efforts to find creative and efficient ways to make agreements that promote these common areas of interest. When we arbitrate, our job is to make a decision, rather than to promote exploration of interests, but our role is nonetheless one that demands that we remain impartial, or indifferent to who “wins or loses”. We must decide the case strictly based in the facts as we hear them and conclude them to be, and the law to which they relate.

In neither of our roles is there room for advocacy for one side or another; and for us, it is important that our market both see us and understand us to be impartial all of the time. It is equally important or us to maintain this intellectual distinction throughout our workday that helps us to stay “neutral” to the very greatest extent that we possibly can.

Along with skills, experience and judgment, our impartiality it is our calling card.

 

Three Important Massachusetts Valuation Cases

Saturday, March 17, 2012

Bernier v. Bernier (SJC) (448 Mass. 774 (2007)

In this groundbreaking case, the highest court of Massachusetts began the erosion of the “fair market value” standard for privately held businesses in divorce. The case involved two grocery stores on Martha's Vineyard, which the husband owned and operated; and critically, he had no intention to sell either property. The ownership form was and S Corporation, and he was the sole shareholder.

At trial, the husband’s expert witness followed the traditional route and, after deriving a value by using a “income” approach, he applied to discounts of 10% each: one being a “key man” adjustment, and the other for “lack of marketability”. The theory for the first discount was that as owner-operator, the loss of a husband would reduce the value of the business to a third party purchaser; and the second was based upon the reality that there is a limited pool of potential buyers for such a business. The wife's expert did not apply any discounts.

The trial judge accepted the wife’s proposed discounts and the husband appealed. The SJC agreed with the husband, and vacated the trial court valuation. The court's rationale stated, for the first time in our divorce jurisprudence, that the standard of value to be applied was not akin to that which a third party purchaser might pay for the business, but rather, what value was being retained by the owner as its holder, rather than as its seller. The court felt that this was appropriate because:

… where after divorce, the judge must take particular care to treat the parties not as arm’s-length hypothetical buyers and sellers in a theoretical open market, but as fiduciaries entitled to equitable distribution of their marital assets.

Thus, for the first time did a Massachusetts case suggest that the standard of value in divorce could be anything other than fair market value; and based on this premise most experts inferred that the SJC changed the standard of value to “fair value”, the standard applied to withdrawing shareholders in a statutory proceeding. To implement its rationale, the SJC then concluded that where the husband had no intention of selling the business, and where the value of the business to him was not jeopardized by his absence, neither discount should fairly apply, lest the court unfairly penalize the wife.

There were other aspects of this case, notably involving taxation adjustments for an S Corporation, but the trembling ground beneath the feet of divorce lawyers, valuation experts and business owners was caused by this unanticipated departure from the traditional standard of value, and accompanying reduced capacity to discount.

Adams v. Adams (SJC) 459 Mass. 361 (2011)

In this case, the SJC relied upon its previous decision in Bernier, reiterating the fiduciary theory of business property division in divorce, rather than that of the free market. Adams, however, was a far more complicated case involving the valuation of the husband's interest in the Wellington Management Company, LLP. The husband claimed that this partnership interest should be accorded no value in the division of assets, but should be viewed only as a stream of income, which the court might order support. The wife's expert calculated value based on the capitalization of earnings, a result that the trial court (by way of a master) essentially accepted. The husband appealed.

In a complex opinion, the SJC supported the conclusion of the trial court that the husband’s partnership interest was, indeed, a marital asset to be valued and divided. It rejected the notion that because the expected distributions were subject to some degree of uncertainty, that

… a divorcing spouse’s interest in a partnership that produces a consistent stream of profits, and reliably disperses those profits to the partner spouse over a period long enough to appraise the present value of the partnership interest fairly, is, in the discretion of the judge, assignable to the marital estate if it is inclusion would achieve a fair financial settlement.

The SJC then reviewed the valuation methodology advanced by the wife's expert and adopted by the trial court. The “capitalization of income” carried the day below, but not at the appellate level. Rather, the SJC concluded that because the husband’s partnership entitlement to the distributions was limited to a period of years, it was an abuse of discretion to capitalize income, as if it could be received perpetually. The SJC found, instead, that the trial court should have applied “some variant of the “discounted cash flow method”.

Again, there were numerous other aspects of the Adams opinion, but the SJC’s emphasis of its earlier Bernier holding, it’s affirmation of the trial court’s discretion to divide as property a partnership interest that consists of merely expected cash flow (as distinguished from an asset from which one might expect a yield upon liquidation or sale) and its willingness to wade in to the valuation methodology waters, were dramatic.

An important sidebar to this decision was the way in which the SJC handled the expected confidentiality of the information belonging to Wellington. The extreme level of detail regarding closely guarded Wellington financial information was duly noted, and caused the court to withdraw its opinion for several weeks, while it grappled with the fact that the information that it disclosed had been subject to impoundment orders entered by the lower court. After a period of reflection, the SJC decided to retrospectively amend lower court’s confidentiality orders to the extent of the disclosures that they (the SJC) had already made: a surprise, no doubt, to all of the Wellington partners; and a cautionary tale for all who rely upon impoundment orders of the trial court.

Caveney v. Caveney (Appeals Court) _____Mass. App. ____ (2012)

In Caveney, Massachusetts Appeals Court (an intermediate court between the trial court and the SJC) reviewed the first reported Massachusetts appellate divorce decision that involves two experts, both of whom claimed to apply the “fair value” standard instead of “fair market value”, in the wake of Bernier. In this case, the court was addressing a 24.75% non-voting interest that the wife held in three companies that her father had founded, and in which he had transferred equal interests to each of his four daughters (i.e., the father retained “control” despite gifting a 99% economic interest).

The wife's expert urged acceptance of the “assets” or “adjusted net asset method” as the most appropriate methodology for this particular company. Then, despite his purported use of “fair value”, he applied a 15% discount for lack of control because the wife's interest was a distinctly minority one; and he used a 30% discount for “lack of marketability”, presumably reasoning that the market for a quarter interest in the company otherwise held by a father and his remaining three daughters would attract a limited array of investors, at best. The trial judge accepted these opinions and the husband appealed.

The husband argued that the trial judge in this case had run afoul of Bernier, albeit within the application of the posited “fair value” standard. He drew a direct comparison to Bernier, noting that there was no imminent sale of the business contemplated and that, therefore, the lack of control and marketability discounts would unfairly deflate the value for equitable distribution purposes. The wife replied that her minimal interest in the company, and consequent total lack of control, made the interest essentially illiquid to her and thus worthy of the demanded discounts.

The appeals court agreed with the husband on the matter of the discounts, while acknowledging that the wife did not have the same level of control as did the husband in Bernier; but still finding the marketability of her interest to be of “little consequence” here. Noting that a “minority discount” (essentially lack of control) was not specifically at issue in Bernier, the Appeals Court wrote that the SJC had “made clear that such a discount “should not be applied absent extraordinary circumstances.””

The Appeals Court did not disturb the trial court’s acceptance of the net asset methodology, despite the husbands complaint, but without explanation.

Thus, the intermediate appellate court, where the vast preponderance of domestic relations cases are heard and disposed of, appears to have broadened Bernier by extending its “no discount” policy to non-controlling interests, simply because no sale is contemplated. Note: the sale of a closely held company is rarely contemplated in a divorce setting because the asset is generally the most significant source of income to the family. The business owner is often charged with support obligations based upon his or her earnings history from that very company, that most cases, the owner views as his or her optimal earning environment. It is interesting to note that the Caveney court could have, but did not choose to limit it’s holding to the specific facts of this case (as many believe the SJC attempted to do Bernier). The court could have noted that the close identity of interest among the father and his daughters made control irrelevant. And, perhaps, the court could have observed that a piecemeal sale of individual interests was so unlikely as to make marketability marginal as well.

Is Caveney the death knell of discounting business interest values in Massachusetts divorce matters?

 

Why we need a family law arbitration law statute in Massachusetts

Thursday, March 08, 2012

Family law arbitration is a concept whose time is way, way overdue. Arbitration is the private, consensual submission of a dispute to a person whom the parties select and regulate by contract; and that person’s job is almost always to make a final and binding decision for the parties, instead of a judge after a public court trial. The parties pick their decision-maker, accounting for skill, integrity, convenience, cost and subject matter expertise. They choose their place. They set the timing. They define their own rules of procedure – or they may choose to apply traditional courtroom-type rules. They receive their decisions within the time that they direct in their agreement to arbitrate. And, it is all private. So, why isn’t every one doing it?

For one, most people simply do not know that this alternative exists. Its history is mostly in the commercial area of law, and only occasionally have family law attorneys tried arbitration. When they do, they love it. Second, it is not obvious that it makes sense to pay for a decision maker, when taxpayer dollars pay for judges to do that job. At one level this makes sense, but anyone who has spent any significant amount of time in the courts knows that the increased costs of representation by lawyers due to the inevitable inefficiencies of the public system can outweigh the costs of an arbitrator many times, and sometimes many times over.

Third, many lawyers are uncomfortable with the prospect of the process (most have not tried it) because most available arbitrators whom they know well and trust are competing litigators, and selecting a direct business competitor to arbitrate a case when you might be in court against the arbitrator that morning or the next day in another case can be uncomfortable for lawyers and clients alike. Finally, lawyers are leery of the fact that under existing law, all binding arbitration is truly final, and therefore, not subject to appeal, as is a judge-made decision. So, it feels risky to lawyers, as it is the last stop for the client without further litigation recourse.

To address some of the impediments to family law arbitration, several other states have enacting Family Law focused arbitration laws. The American Academy of Matrimonial Lawyers (AAML), of which Bill and Chouteau Levine are both longtime fellows, has created a model act (that is, a format that individual states may modify to meet their local needs and practices) for matrimonial arbitration. In turn, the Massachusetts Chapter of AAML has adapted that model act to Massachusetts’ needs, and is in the process of seeking support for its eventual submission to the Massachusetts legislature. Bill Levine of LDRC is leading that effort on behalf of AAML-MA. You can see the Proposed Family Law Arbitration Act here.

What questions or thoughts do you have about Family Law Arbitration?

 

What Is a Business Worth in Divorce When the Owner Plans to Keep It?

Tuesday, March 06, 2012

When dividing assets at divorce, one of the more challenging jobs is how to divide the value of a business that one or both of the parties owns. Usually, the business is the source of the family’s income, and after divorce, it will become the source of alimony and/or child support. Usually, also, the business owner-spouse does not plan to sell the business, at least not for a long while, because it is the best way for this person to generate income and, therefore, support. Often, this business owner doesn’t think that he or she will ever sell it, and may not even realize that the business is a “marital asset.”

Yet, the law defines the business as a piece of property to be factored into property division, so it has to be considered. How, then, do we figure out the value to be assigned? This generally done by use of what are called “experts”, most often accountants with special training in business valuation. In simplest terms, the expert (s) (either one hired by each spouse separately, or often in mediation for example, one jointly hired person) decide (in very simplified terms) to value the company by estimating the kind of income that the company may generate for the business owner in the future and how much another person or entity would pay for that expected income.

Then, historically, valuation experts would reduce the estimate just described by factors known as “discounts”. These were used to account for such factors as the lack of a large number of others prepared or desiring to buy a small company (called “marketability”), or in situations where the business owner does not own a large enough share of the company to control the company him or herself (called “lack of control”) or the belief that the business owner is personally critical to the success of the business (called “key man”). These discounts often reduced the value of the business owner’s property interest by 15 – 30 per cent.

This all began to change in 2007, when the Massachusetts Supreme Judicial Court (SJC) decided a case that involved a man who owned two grocery stores on Martha’s Vineyard, called Bernier v. Bernier. On appeal from a trial decision, the SJC learned that the business owner-husband had no intention of selling the business. Because of this, the court concluded that it was not fair to the wife to reduce the value by factors related to a sale, when a sale was not expected to occur. The SJC believed the real value that was relevant to the case was the value of the expected income to the husband himself in the future (since he was keeping the stores), and the value to a hypothetical buyer.

Many experts called this change in focus a shift from “fair market value” (what a buyer would pay) – the traditional value in divorce cases -- to “fair value” (what the future income is worth to the spouse keeping the business). Because fair value implies that no discounts should apply, the result is usually a higher value and results in the non-owner spouse receiving more of other property to offset this higher business value.

A very recent case, Caveney v. Caveney, supported this view. A trial judge applied discounts to reduce the value of the business owner-wife’s 24.75 per cent interest in a business run by her father. The husband appealed these discounts and convinced the Massachusetts Appeals Court (an intermediate court that hears many more divorce appeals than the SJC) that because “the sale of the business is not imminent” that the discounts were wrong. The Appeals Court reversed the trial judge’s decision. The Caveney Appeals Court actually referred to the use of the “fair value” approach, confirming in the minds of many that this is actually the value premise to be used in all cases in the future where a sale is not contemplated.

This blog entry is a very simplified discussion of these issues, which tend to be very complex and full of individual judgment. In mediation we discuss these concepts and others that are difficult and important. We also encourage clients to have independent counsel to help them understand and know how apply and respond to these issues. People’s sense of “fairness” is certainly affected by the side of the question the person finds him or herself. What do you think?

 

Same Sex Marriage and Child Custody: An Important Decision

Friday, March 02, 2012

For many years, former husbands and wives on Massachusetts have commonly shared legal custody (major life decision making) of their children. This happens except in unusual cases such those involving domestic abuse, drug or alcohol problems, unavailability or extreme disinterest of one parent. In unmarried parent cases (they out number divorce custody cases now), the rules are different, in that a mother is still presumed to be the custodial parent unless the other parent can prove a clear history of parent cooperation before the start of court involvement. The lack of a marriage is the key difference.

But what about legal custody of children born during same sex marriages? Massachusetts has permitted and facilitated same sex marriage since 2004. This occurred though a Supreme Judicial Court case called Goodridge v. Dept. of Public Health. (Several other states have since followed suit.) The Supreme Judicial Court (SJC) did this because the justices concluded that the state constitution demanded it. The decision was controversial at the time but after nearly eight (8) years, same sex marriage is entrenched and, for the most part, fully accepted here.

But, with marriage comes divorce, and same sex marriages are no exception. So, after that passage of time, same sex marriages have found their way into the divorce courts, and when children are involved, this has resulted in custody matters.

Since the pre-existing law and practice for straight spouses was to encourage joint involvement and decision making for children, why would this not immediately translate to same sex spouse after divorce? The prime reason is biology. To be eligible for joint legal custody, a person has to be a child’s legal parent. Under the law, if a child is born during a marriage of the mother, her husband is presumed to be the child’s legal father, whether or not he, in fact, is the biological the parent. This is because the law wants to encourage “legitimacy” of children where possible,.

When the SJC said that same sex couples could marry in Goodridge, it also commented that certain state statutes should be read in a gender neutral way, that is: “husband” equals “spouse”, regardless of gender. But there are many such statutes, and one of them is the presumption of legitimacy law that we noted above. It says that a child born during a marriage “…shall be considered to be the legitimate child of the mother and such husband”. But the Goodridge case was not about the legitimacy statute. In the very recent case of Della Corte v. Ramirez, this issue arose. The biological mother of a child (Della Corte) claimed that her same sex spouse (Ramirez) could not share legal custody because she was not a legal parent, even though the child was born during their marriage. Della Corte argued that Ramirez could only become the legal parent by adoption since she was not a husband; and she had not adopted the child.

Clearly, Ramirez could not be a biological parent, so unless the legitimacy statute was applied to same sex parents, regardless of gender, Ramirez was out of luck and without custodial rights. Fortunately for Ramirez, the trial judge disagreed with Della Corte. He believed that the Goodridge decision, and its commentary about gender neutrality, required him to rule that Ramirez was accorded the same rights as a husband under the legitimacy law. Therefore, he concluded, she was the child’s legal parent, as that would be the only way to apply the law in a gender neutral way. Since the other facts of the case justified it, he awarded Ramirez joint legal custody, as he would any other parent.

Most lawyers think that this case established, beyond further serious question, that custody matters will be decided by the same rules for all marriages, same sex or otherwise, in Massachusetts, hereafter.

 

What is Arb/Med?

Wednesday, February 22, 2012

Mediation is the facilitated negotiation of agreements between parties to a dispute. In divorce, for example, a mediator sits with the spouses, or the spouses and their lawyers, and works through the issues that are necessary to “settle” the case, and lead to a written and signed agreement. In a will contest or a damages case, the mediator may help the parties come to agreement on a “number” to be paid by one party to another. The parties themselves are the final decision-makers. The lawyers advise. The mediator supplies the environment in which the parties have an enhanced opportunity to speak, listen directly to each other; and the mediator intervenes as appropriate to inquire, to support, to inform, to provide focus and to generate ideas.

Arbitration, by contrast, is a process that is used when the parties cannot reach agreement themselves. They ask the arbitrator to make the decision for them after a “hearing” at which the parties and/or their lawyers give the arbitrator information that is generally called “evidence”. This includes the oral or written statements of witnesses by formal or informal means, and relevant documents. The arbitrator then writes and issues what is known as an “award”. The award is then usually brought to court for confirmation and a concluding court order, generally called a “judgment” or a “decree”.

Both mediation and arbitration are out-of-court processes that Levine Dispute Resolution Center LLC (LDRC) provides.

So, what is “med/arb”? It is a solution that people choose when they really want to try to achieve a negotiated settlement, but are determined to obtain finality in a timely and efficient way, even if their facilitated negotiated does not result in an agreement. People agree at the beginning that the same person will work as a mediator first to attempt to resolve matters by agreement, but if it fails, the mediator will “change hats”, and make a decision. Sometimes, the mediator turned arbitrator simply makes a decision with the information gained in preparation for and during the mediation phase; and at other times, after a follow up hearing.

Two common examples that are similar to this are called “parent coordination” and “discovery master” proceedings. In the former, the PC’s job is to try to stimulate agreement, but will make an ultimate decision, subject to court review, if the disputing parents cannot agree. In the latter, the master tries to get lawyers to settle on how information will be exchanged in litigation, but makes a “recommendation” for a solution if they do not ultimately agree. Then a judge enters an “order” if he or she agrees with the master’s recommendation. Med/arb is broader and is intended to be final (see our earlier blog post about arbitration of child custody and child support matters regarding some limitations.) It can apply to any kind of dispute, large or small. A judge cannot order it without the parties’ consent. It can be quite efficient, though some people worry about the arbitrator’s judgment being swayed by what he or she heard from the parties during the mediation phase, from information that was given less formally and maybe less reliably in the mediation stage than might be required in arbitration. The parties need to consider this and plan their rules and process to provide the protections that they feel they need. Remember, the parties make the rules in these private, consensual forms of dispute resolution.

An interesting variant of med/arb is called “arb/med”. We will talk about this in a subsequent blog post.

 

What is Family Law Arbitration?

Wednesday, February 15, 2012

Family law arbitration is a concept whose time is way, way overdue. But, what is it?

Arbitration is the private, consensual submission of a dispute to a person (the arbitrator) whom the parties select and regulate by contract. The arbitrator’s job is to make a decision (called an “award”) that is usually final, instead of a judge in a public trial in court trial. Arbitration generally is regulated by a state statute called the Massachusetts Uniform Arbitration Act (“MUAA”). The MUAA was created for business. It encourages companies and the people and other companies with whom they do business, to look outside of the courts for cost-efficient, expeditious, private and final resolution of disputes. The business world embraced this approach, and business arbitration is very common.

Over the years, as the Probate and Family Courts have become more difficult, less efficient and more costly to navigate to conclusion, individuals and their divorce lawyers have occasionally looked to arbitration as an alternative to court. As a result of people doing this, a small body of law has developed here. The appellate courts have generally looked favorably on this remedy, which after all, helps to divert cases from an overburdened public court system. The MUAA, which is called a “commercial” law, has been applied to family law in ways that are somewhat oblique. We will discuss this in a later blog entry, when we take up “Why We Need a Family Law Arbitration Statute”.

Here’s how Family Law Arbitration works. The parties pick their arbitrator. Arbitrators are usually experienced lawyers, including retired judges. The parties choose someone whom they and/or their lawyers believe has skills, reputation for integrity and expertise. The ability to pick an arbitrator based on his or her skill sets is unique to arbitration as compared to court, where judges are assigned to cases at random. Every judge has to be a “generalist” because he or she needs to hear every kind of case that finds its way into court.

After selecting the arbitrator, the parties and the lawyers themselves decide what part of their case will go to the arbitrator, which can be any part or all of it. They choose the time of the hearing. They decide the rules and information that will be used. The procedures can be as formal as court, or decidedly more relaxed. The parties direct the arbitrator when they want a decision to be made. They define the scope and kind of decision that the arbitrator will make. Finally, they agree on where the hearing will take place.

When the hearing occurs, the parties have the arbitrator’s sole attention: no emergencies intrude as happens in the courtroom. Even the length of the lunch break is determined by the parties themselves. If the parties want to have a long day, they do; if they prefer a shorter day, that is their decision, too. When the decision comes, it is within the time demanded by the parties.

Why doesn’t everyone who cannot settle by lawyer –to – lawyer negotiation, or mediation, use arbitration instead of public court trial? We will examine that question in a later blog entry.

 



Get e-mail notifications of new blog posts! Enter email address below.:



Delivered by FeedBurner