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Divorce Mediation Blog

Matrimonial Arbitration is the Not Credit Card Kind

Wednesday, May 27, 2015

In the May 25th Opinion page of The Boston Globe, Law Professor Jeff Sovern wrote convincingly that arbitration, the kind that appears in the very small print of credit card agreements should be banned as unfair and anti-consumer. Thinking back to law school the term “contract of adhesion” comes to mind, where the commercially powerful victimizes the weak with terms on which the latter has no practical ability to negotiate.

But the piece also brings us back far more recent events, in which one of us attempted, over a period of nearly 10 years, to advance a proposed Family Law Arbitration Act, on behalf of the American Academy of Matrimonial Lawyers, through the pre-legislative stage. In trying to build support among the bar by endorsement of the Massachusetts and Boston Bar Associations, without which legislators will not consider sponsorship, Bill Levine spent parts of 3 separate years successfully obtaining approvals of the associations’ family law sections, only to founder when other sections had interests that viewed family law arbitration as if it emanated from the small print of similarly one-sided transactions. In some frustration, and by an otherwise tactical decision, we backed away from the effort, approval of the broader bar associations being unlikely, to await the Uniform Laws Commission’s (formerly NCCUSL) Model Family Law Arbitration Act that is expected in 2016 or so, when we expect to take another run.

Matrimonial arbitration is not credit card arbitration. Every agreement from which it must arise is one in which that parties have, or have the right, to counsel. In each case, both parties have an absolute right to say “no”. Every agreement to arbitrate future disputes, as part of the divorce agreement is approved by a judge and subject to later objection and review on the basis of contract defenses such as incapacity, duress, coercion or undue influence. Each agreement to arbitrate a present dispute is subject to court approval. Subject matter limitations in the name of parens patraie, such as best interests review and trial de novo of custody matters are policy long established in common law. As a matter of current case law here, all arbitration awards are likely subject to fairness review.

Would some overbearing litigants seek advantage by cutting off opponents’ direct access to court? Most likely, yes. Are there ways to vet and avoid the consummation of such schemes that deny free will? Absolutely. Should this concern throw out legislative promotion of a cost-effective process that merely adds one more optional remedy for parties’ who struggle with a highly public, overloaded and fiscally-hobbled public court system, serving themselves and relieving resource scarcity for the public at the same time? Emphatically, no.

Don’t let banks prey on weak consumers. But, at the same time, see the problem for what it is: overbearing commercial interests reducing their own liability for predatory lending practices; and not an indictment of arbitration per se.

 

When Alimony Meets Federalism

Wednesday, August 14, 2013

Recently, Bill Levine of LDRC taught at the American Academy of Matrimonial Lawyers’ (AAML) 21st Matrimonial Arbitration Institute, a training program for 52 family law specialists from 13 states, in Chicago, Ill. During the program, participants received a fact pattern for a pending divorce case involving property distribution and alimony issues, to be resolved by the student-arbitrators, each in a written “award”, or arbitration decision. The faculty reviewed and critiqued the submissions as the attendees completed their course requirements.

The exercise revealed a fascinating diversity of alimony outcomes. Spousal support, maintenance or alimony (as it is known in different states) is strictly a creature of state law. We in Massachusetts are in the second year of adapting to comprehensive alimony “reform”, just now approaching the first appellate decisions that will shape the 2011 statute (eff. 3/1/12) for years to come. From an outcome perspective, it appears that we fall in the middle of a very broad national range.

Simplified, the fact pattern was: a husband with earnings of $150,000 per year and a wife with a $24,000 annual salary, at the end of a 20-year plus marriage. Both parties were in their mid-40’s. Fairly predictably, in Massachusetts, the Husband would pay alimony of $40-45,000 per year, for 16 years, or for an indefinite durational term. Contrast that with the outer range of outcomes that we saw in Chicago: from $60,000+ per year with no fixed duration to $12,000 annually for a fixed term of five years. We assume, given the nature of this group, that each attendee’s award fairly reflected a sophisticated understanding practice in the writer’s jurisdiction.

We are used to hearing about polarization between “red states” and “blue states” on the gamut of political, economic and social issues in 21st century America, but we don’t hear much about the “alimony gap”. No doubt, this is partly driven by disparate regional costs of living, but there must be more at work here. Federalism produces other stark family law differences such as child support approaches and sums, emancipation ages, mandated or no required participation in college costs and health insurance obligations, but none more dramatic that this apparent spousal support chasm.

One more sign of a Balkanizing America?

 



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