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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.

 

High-Low Agreements: Mitigating Finality Anxiety In Family Law Arbitration

Wednesday, September 18, 2013

One of the most prevalent fears that lawyers have in using divorce and other family law arbitration is that under the Massachusetts version of the Uniform Arbitration Act, the parties waive the right to appeal an adverse award for abuse of discretion or errors of law. This is largely true for property and alimony matters, less clearly so for custody and child support.

One way of cutting the sense of risk is to borrow a practice from the commercial litigation world, by entering to a high-low agreement. As examples only, the parties can agree that:

  1. The overall percentage division shall be no broader than 60-40.
  2. The value of the house will be no more than $750,000 and no less than $600,000.
  3. The alimony sum shall be no less than $30,000 and no more that $50,000; and it shall run for a minimum term of 60 months but not longer than 84 months.

The parties may disclose the agreement to the arbitrator or not, as they see fit.

In most cases most of the time, the parties can agree on a reasonable range of outcome but can’t zero in on a final result. Why give up an expedited, cost-effective, flexible and private remedy for fear of lost appellate rights, when a high-low understanding can essentially rule out any motivation to appeal in advance? The costs, delays and high bar for successful appeal make it impractical anyway for all but a very few people in an exceedingly small number of instances.

 



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