Update from the Family Law Arbitration Drafting Committee

The Family Law Arbitration Act Drafting Committee had a productive meeting in Chicago in March 2016 and a follow-up conference call in early April.  The Act, which will be up for a final reading at the 2016 Annual Meeting, has undergone significant changes in the past year.  As currently drafted, the Act  tracks the Revised Uniform Arbitration Act (RUAA) in many respects but diverges from the RUAA in key areas that distinguish family law arbitration from commercial arbitration.  These include standards for arbitration of child custody and child support, protections for victims of family violence, provisions for temporary awards, and provisions relating to post-decree modifications.

In response to concerns expressed by various commissioners and outside groups, the Committee strengthened the role of the courts in cases involving children and in disputes in which domestic violence is present.  In particular, in order to confirm an arbitration award determining child custody or child support, the act now requires that a court find that the award complies with applicable law and furthers the best interests of the child.  A verbatim record must be created for any part of an arbitration hearing addressing child-related issues, and the arbitrator is required to provide a statement of reasons for the award.  In addition, a bracketed provision is now in the act authorizing discretionary de novo review of awards determining child-related disputes.  Further, if domestic violence is evident between the parties in a dispute that is subject to arbitration, a court must decide whether arbitration may proceed.  Finally, a mechanism for excluding child-related issues from arbitration altogether is available under the act.

The Drafting Committee has also addressed the question of preemption under the Federal Arbitration Act by adopting the language of the FAA and the RUAA regarding the validity of arbitration agreements.  In particular, the Act no longer prohibits pre-dispute agreements except for agreements concerning child-related issues.  As under the FAA and the RUAA, ordinary contract defenses (lack of voluntariness, fraud, duress, etc) remain available to challenge the validity of an arbitration agreement at the time of enforcement.

Other changes include unique provisions for arbitrator qualifications and arbitrator powers.  In the family law world, parties often prefer that a seasoned family law practitioner or retired family court judge serve as arbitrator.  For certain issues, however, parties might seek out a business valuation specialist as arbitrator.  The act provides flexibility in this regard and gives parties the right to waive certain general requirements by agreement.  Also, the act recognizes arbitrator powers particularly relevant to the family law realm, such as the power to appoint a representative for a child.

After three years of drafting, the Committee remains enthusiastic about the project.  We believe the act will provide needed guidance across the United States for this growing form of dispute resolution.

Barbara A. Atwood, Chair, Drafting Committee on Family Law Arbitration Act

 

Update from the Family Law Arbitration Drafting Committee

Update on Family Law Arbitration Act Drafting Committee

The Family Law Arbitration Act Drafting Committee, now in its third year of drafting, remains enthusiastic about the project. The use of arbitration at divorce is on the rise across the U.S., but most states haven’t enacted legislation addressing the unique features of this form of dispute resolution in the family law context. We believe our timely project will fill a real need and will provide beneficial uniformity.

The Drafting Committee is well aware of the hostility that many people hold for “voluntary” binding arbitration when it is misused in consumer contracts, employment contracts, and other contracts of adhesion. Family law arbitration is a different creature altogether, with benefits that may be particularly valuable to disputants in family court: privacy, informality, speed, and the ability to select an expert decision-maker. In contrast to the criticism often aimed at commercial arbitration, there is no built-in bias favoring one party over another in family law arbitration. Still, arbitration does entail a waiver of the right to litigate one’s dispute in court. We need to ensure that any enforceable agreement to arbitrate a family law dispute is based on a truly voluntary and informed decision.

Three primary concerns emerged during the reading of the family law arbitration draft at the 2015 ULC Annual Meeting: the potential preemptive effect of the Federal Arbitration Act, particularly with respect to the draft’s imposition of special requirements on family law arbitration agreements; the resistance to arbitration of child custody and child support that exists in many states, through court decision or legislative enactment; and the failure of the draft at various points to track the Revised Uniform Arbitration Act. Over the course of our most recent drafting committee meeting in early November 2015, the Committee agreed on changes in the draft to address these concerns while also keeping our focus on the over-arching goal of producing an act that is enactable.

Because the general exclusion of pre-dispute arbitration agreements would pose preemption problems and would be inconsistent with existing state law on arbitration, we decided to confine the prohibition of pre-dispute arbitration agreements to agreements concerning custodial responsibility and child support. For purely financial disputes between parties, we concluded it was better policy to provide a mechanism for challenging pre-dispute agreements at the time of enforcement rather than barring such agreements altogether.

In addition, the Committee decided not to retain a list of caveats that would be required in every arbitration agreement but, instead, chose to reframe the caveats as factors that a court may consider in determining whether an arbitration agreement is informed and voluntary. As to child-related awards, we made changes in the draft’s provisions on judicial review of child custody and child support to adopt a formulation of the best interests standard that appears in several states’ arbitration laws. Among other revisions, we also reworded certain procedural sections to more closely conform the draft to the RUAA. We may provide a model family law arbitration agreement in the commentary, building on a new procedural rule and model agreement that the New Jersey courts recently promulgated.

The next drafting committee meeting is scheduled for March 18-19, 2016. We will finalize a new draft several weeks before that meeting date and will post it on the ULC website. We encourage commissioners who have comments or suggestions for the Committee to send them to the Reporter, Professor Linda Elrod, at linda.elrod@washburn.edu or to me at batwood@email.arizona.edu.

Barbara Atwood, Chair, Drafting Committee on Family Law Arbitration

Update on Family Law Arbitration Act Drafting Committee