Divorce Mediation Blog

Important Arbitration Case Pending: May Have Particular Impact on Family Law

Monday, January 18, 2016

We read with interest about the pending case Supreme Judicial Court (SJC) case, Katz Nannis & Solomon, PC v. Levine (no relation), in the October 12, 2015 issue of Massachusetts Lawyers Weekly. Holland & Knight’s Attorney Gordon P. Katz wrote “SJC to Consider Expanded Review of Arbitrators’ Awards”, about the case, a civil action between estranged shareholders of an accounting firm. The question on appeal arises from an arbitration agreement; and specifically whether or not parties can bind each other and the court to rights of review that are broader than those that are set forth in the Massachusetts version of Uniform Arbitration Act.

M.G.L., ch. 251, § 12 limits the right to vacate an arbitral award to the grounds of: corruption or fraud; evident arbitral partiality; exceeded authority; and arbitrator’s refusal to grant a continuance sought with reasonable cause; or failure to admit material evidence. The contract in Katz case added that a court could overturn an award if it were based on “material, gross and flagrant error”, a higher threshold for appeal than provided in civil litigation, but broader, certainly, than §12. The SJC should rule on the matter sometime next year

One of the more frequently cited impediments to the growth of divorce arbitration, despite its manifest opportunities (efficiency, expediency, convenience, privacy, cost and control of selection of decision-maker), is that lawyers are deterred by the general loss of appellate rights. While everyone is well aware that appeals are rare, lengthy, obscenely costly, often inconclusive and always unpredictable, they are slow to relinquish the fail-safe for the true outlier result that they may encounter. We certainly understand the defensive impulse: divorce litigation clients are among the more litigious with their lawyers, post-divorce.

We have long believed that the law should allow people to agree to that level of review that they, as competent contracting parties, feel is appropriate. The American Academy of Matrimonial Lawyers Model Family Law Arbitration Act, includes the right of parties to elect appeal of errors of law to the trial court judge, in the first instance, then to the appellate level. The local AAML has advanced a Massachusetts version of that model act here, without success so far. It, too, contains that right to vary review and appeal provisions.

We hope that the SJC recognizes this important contractual right; and that if they do, divorce lawyers will take another look at matrimonial arbitration.

We’re always happy to talk.

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