Alternatives to Court, Part 3: Family Law Arbitration
The North Carolina Supreme Court’s Rules for Settlement Procedures in District Court Family Financial Cases provide a framework for various approaches that can be used to settle domestic cases that involve family financial matters. These family financial settlement rules accentuate the precedent of encouraging parties to settle their matters outside of court through one or more means of alternative dispute resolution (ADR).
Family financial matters are civil cases filed in district court in which there is claim regarding a financial issue, such as one or more of the following:
equitable distribution;
child support;
postseparation support and/or alimony; and/or
a claim arising out of a contract between the parties under N.C.G.S. § 50-20(d), 52-10, 52-10.1, or 52B.
Under the stricture of the family financial settlement rules, with few exceptions, parties involved in domestic cases that include family financial matters must participate in an approved method of alternative dispute resolution (ADR). The purpose of this requirement is to ensure that parties take advantage of opportunities and options to settle their disputes outside of court, with going to court being a last option.
Although pre-trial mediation is mandatory in most cases involving child custody and equitable distribution, judges have the authority to order mediation in all domestic cases, including those that involve claims for postseparation support, alimony, and certain marital contracts. As an alternative to participating in mediation, (or in addition to mediation), the parties may participate in other settlement processes, including arbitration, judicial settlement conference, neutral evaluation, and collaborative law.
People outside the legal community sometimes confuse mediation and arbitration, often believing they are the same. Mediation and arbitration are very different concepts, but they are both methods of alternative dispute resolution. In mediation, a mediator works with the parties to resolve the matters in controversy by helping them reach a mutually satisfactory agreement. In arbitration, the parties submit the issues in dispute to an “arbitrator” (sometimes called an “arbiter”) who has the authority to make a decision for the parties, much like a judge.
Arbitrations of family financial matters are governed by the rules set forth in the North Carolina Family Law Arbitration Act. These rules allow the parties to agree to arbitrate any issues that arise out of the marriage, with the exception of child custody and child support. For example, the parties may agree in advance in a prenuptial agreement, postnuptial agreement, or separation agreement to use arbitration in the event there is any dispute that arises from such agreements. The use of arbitration is achieved by adding language to the contracts that states that the parties will use arbitration prior to, or instead of, going to court. Additionally, an absolute divorce (the divorce itself) cannot be arbitrated, but must be granted by a court with jurisdiction.
There are many benefits of using arbitration to settle domestic disputes. The rules promulgated in the North Carolina Family Law Arbitration Act provide the parties with the flexibility to adapt the arbitration process to meet their specific needs. One advantage of arbitration is that the parties may jointly select the person (or persons) who should serve as their arbitrator. Sometimes, parties elect to have a panel of arbitrators, usually a panel of three, to decide their case.
Arbitrators are typically attorneys who have experience and training in conflict resolution. Thus, the parties have the ability to select a knowledgeable, respected, and competent arbitrator who has valuable background experience related to the matters in dispute. Hiring a family law attorney to serve as your arbitrator can be more cost-effective and efficient. Unlike a judge who is often limited by a time constraints and a heavy court calendar, the parties can choose an arbitrator who is more readily available; able to allocate more time to their individual case; and offer more flexibility in scheduling matters for hearing. These advantages of arbitration may result in more rational, fair, and well-reasoned decisions being made in the case. Arbitration also can take place in a private, comfortable office, rather than a public courtroom.
The arbitration process may be similar to the procedure and structure as going to court, but it is typically less formal. An arbitrator has some of the same judicial authority in conducting an arbitration as a judge. The arbitrator may set deadlines and conduct temporary or preliminary hearings. Each party is given the opportunity to testify under oath, present evidence, subpoena witnesses to testify, cross-examine witnesses, and make legal argument, much like they would do if their case was being heard by a judge.
Depending on the rules governing during the parties’ arbitration agreement, the arbitrator’s award may be binding or nonbinding (appealable). In the interest of seeking closure and finality, most parties choose to have binding arbitration. That means the parties agree to accept the arbitrator’s decision as a final determination of the matters in dispute. Thus, only in very limited circumstances, such as fraud or corruption, can an arbitrator’s binding award be appealed to the North Carolina Court of Appeals.
Siemens Family Law Group is a preeminent Western North Carolina family law firm that focuses exclusively on family law and related issues, such as domestic violence. Jim Siemens is a board-certified family financial mediator by the North Carolina Dispute Resolution Commission.
Our dedicated attorneys have successfully represented countless parties in mediation, arbitration and other ADR processes. The expansive knowledge of our family law team enables us to recognize cases that are appropriate for arbitration, as well as potential and preferable solutions to family financial conflicts. Being represented at arbitration by a skilled family law attorney who is well-versed in the law, and knowledgeable of the intricate arbitration process, is one of the most valuable investments that a client can make to ensure a favorable outcome.
In addition to representing parties in the arbitration process, Jim Siemens is also available to serve as an arbitrator in domestic cases that involve family financial matters, including those with complex legal issues and high net worth.
To schedule an appointment to discuss your unique situation and learn more about your options, call Siemens Family Law Group at (828) 252-5080 or contact us online. We serve clients throughout Buncombe County (Asheville) and the surrounding areas in Western North Carolina.
This article is part of a three-part series. Please see our related blog articles entitled Alternatives to Court, Part 1: Informal Settlement Negotiations; and Alternatives to Court, Part 2: Mediation.
This article is for information purposes only and should not be relied upon or substituted as legal advice. The content in this article is based upon North Carolina laws in effect at the time of posting.
Jim Siemens
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