Divorce Mediation Blog

A Shout-out for Bullet Arbitration

Wednesday, December 18, 2013

Recently, we handled a case where the parties had been engaged in divorce mediation with a really great mediator, after litigating hotly, but inconclusively, for some time. They were progressing in the new process, but kept running into a stubborn problem: the value of the husband's business, and the level of compensation from it, were widely contested; so much so, that they could not reach closure on either asset distribution or support.

The lawyers for the parties called, with their mediator, and inquired about family law arbitration (an out-of-court adjudication to which they would agree to be bound, under rules and conditions that they themselves negotiated and set). We, of course, said "yes".

Within the week, a deal on the rules was struck: each expert would give a narrative presentation of his valuation analysis, subject to a defined period of cross-examination by opposing counsel and questioning by the arbitrator, followed by re-direct examination by proponent's counsel. The rules of evidence applied to cross and re-direct exams. The experts were sequestered. The arbitrator's (who also served as a master, facts final by appointment of the court) work product would be a report/award of the valuation, with a brief rationale. The parties waived findings of fact and closing arguments.

These were the rules that they chose, and that worked for them. The proceedings could have been less formal, or completely court-like, if they preferred; but they seized control of their own situation and made it work in the way that made sense to them: a successful negotiation.

Within about three weeks of the initial call, the hearing occurred and 10 days later the parties had their arbitrated result. It included a value for the husband's interest and it explained the income predicate used in the capitalization of cash flows.

A few days after, they returned to mediation and settled their case.

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