AAML HOT TIPS. Matrimonial Arbitration. Lynn P. Burleson Tharrington Smith, L.L.P. Raleigh, North Carolina

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1 AAML HOT TIPS Matrimonial Arbitration Lynn P. Burleson Tharrington Smith, L.L.P. Raleigh, North Carolina I. Enact your own state matrimonial law arbitration act. On October 1, 1999, North Carolina joined at least nine other states with specific legislation authorizing arbitration of matrimonial cases and became the first state to adopt an arbitration statute specifically designed for such cases. The North Carolina statute is unique among the nine states because it provides comprehensive authority and guidance to the parties by statute embodied within the matrimonial law chapters and by model forms and rules archived with the North Carolina Bar Association. While the project was technically conducted under the auspices of the North Carolina Bar Association for political reasons, all of the non-academic committee members were AAML fellows. The North Carolina Family Law Arbitration Act permits all issues incident to a marriage or breakup of a marriage, except for the absolute divorce itself, to be submitted to binding arbitration, if a husband and wife agree to it. Guidance in formulating the Act and the ancillary rules and forms came from the Uniform Arbitration Act, the Revised Uniform Arbitration Act, the International Commercial Arbitration and Conciliation Act as well as rules and forms of established arbitration institutions. A joint committee of the North Carolina Bar Association s Family Law and Dispute Resolution sections drafted the Act and the ancillary forms and rules. The initiative for this Act came from the 1982 case of Crutchley v. Crutchley, 306 N.C. 518, 293 S.E.2d 793 (1982). That case not only prohibited arbitration in child custody and child support cases, but also suggested that all family law arbitrations were void ab initio if the parties attempted to take their case to arbitration after a civil action was filed. The North Carolina Act preserves modifiability of child custody, child support, postseparation support and alimony to the extent that modifiability rights exist under North Carolina law. The arbitrator has significant authority to order interim relief measures. Unless the parties agree otherwise, one arbitrator will hear the case instead of three and a reasoned award is required. Parties cannot be bound to binding arbitration on child custody and child support issues by a premarital agreement. A party may appeal a child custody or child support award to the trial court if the award is not in the best interest of the child, but the burden will be upon the moving party. In his Chapter President s Message that appears as a forward to the manuscript for North Carolina s regional AAML arbitration workshops, Mark Sullivan writes:

2 The passage of the Family Law Arbitration Act in 1999 has set the stage for one of the most exciting and significant changes in the practice of family law in North Carolina. Family lawyers now have the opportunity to have cases involving custody, visitation, child support, postseparation support, alimony and equitable distribution resolved by an experienced family law expert trained and certified by the American Academy of Matrimonial Lawyers to arbitrate all issues from the simplest to the most complicated. In arbitration the parties control the process and select their judge. The family law arbitrator chosen by the parties will hear and decide their case on the merits and prepare an award that will become binding and non-appealable. The attorneys and the arbitrator agree upon a time and a place for the hearings that is most convenient to the parties and their attorneys and the hearing will be confidential. The arbitrator may be retained to resolve a single issue or all issues of a case and may be brought into the case early on to monitor and oversee discovery or to hear pre-trial motions. Family law arbitration is an efficient, effective and economical dispute resolution alternative that can assure your client the highest level of judicial competence. Just as mediation has become a popular and successful means of alternate dispute resolution, arbitration will soon become the method of choice to adjudicate family law issues. Does binding arbitration have a place on the menu of matrimonial law dispute resolution alternatives in your state? As one of the matrimonial leaders in your state, consider developing a state matrimonial law arbitration statute. A well-conceived statute along with suggested ancillary forms and rules are important because most matrimonial lawyers have little understanding of arbitration unless they have past experience in employment or construction law. This statute can be relatively easy to navigate through a state legislature because (a) there is no requirement for a related appropriations bill and (b) it becomes operative only when the parties consent in writing to the process. Arbitration is not only a client-friendly process but it is also an attorney-friendly process although it is much more similar to litigation than to any other ADR procedure. Attorneys exercise far more control over the discovery and hearing timetable and, therefore, their lives. Arbitration also creates another role for the experienced matrimonial attorney. The attorney-arbitrator, like the attorneys for the litigants, provides a valuable service, presumably at his or her full hourly rate. Arbitration is not an exclusive ADR option. It can be used in conjunction with mediation and collaborative law when the parties reach an impasse on one or more of the contested issues. The process can be built into executory provisions on which disputes might arise in pre-marital agreements and in separation agreements and property settlements.

3 If you would like to have more information on the North Carolina statute and the related rules and forms, feel free to contact me at (919) My address is The statute, rules and forms, included within Arbitrating Family Law Cases by Agreement: Handbook for the North Carolina Family Law Arbitration Act, written by Professor George K. Walker of the Wake Forest University School of Law for the North Carolina Bar Association, can be found at II. Promote matrimonial arbitration through regional workshops conducted by state AAML chapter fellows and position AAML fellows as the arbitrators of choice. Shortly after passage of the North Carolina Family Law Arbitration Act, the North Carolina Chapter of the American Academy of Matrimonial Lawyers developed a workshop entitled, Arbitrating Family Law Cases: A Practical Course for the Matrimonial Law Practitioner. This is a four hour regional workshop approved for continuing legal education credit by the North Carolina State Bar Association and conducted by fellows of the American Academy of Matrimonial Lawyers. The workshop is scripted with PowerPoint so that regional fellows can easily conduct the workshop. The objectives of these workshops are to raise the comfort level of family law practitioners across the state with the arbitration process and to position AAML fellows as the primary arbitrators of matrimonial law cases in the region and state. A typical workshop program agenda is as follows: 8:30 a.m. - 8:45 a.m.- Welcome- Chief District Court Judge 8:45 a.m. - 9:15 a.m.- The Problem, The Solution, The Opportunity 9:15 a.m.- 9:45 a.m.- Statute, Rules, Forms 9:45 a.m.- 10:30 a.m.- Ethical Issues in Arbitration 10:30 a.m.- 11:15 a.m.- Arbitration Demonstration 11:15 a.m.- 11:30 a.m.- Break 11:30 a.m.- 12:00 p.m.- Arbitration Decision and Award 12:00 p.m.- 12:30 p.m.- Questions and Answers III. Use two separate agreements in arbitration matters- an Agreement to Arbitrate and an Agreement for Arbitration Rules. Under the North Carolina Family Law Arbitration Act, once the parties have entered into an agreement or consent order to arbitrate, the court must relinquish jurisdiction to the arbitrator. All that is required is a consent order or agreement to arbitrate signed by the parties referencing the North Carolina Family Law Arbitration Act and listing the specific issues to be arbitrated. While most such orders or agreements designate the arbitrator, that is not essential. It is also not essential for the initial order/agreement to designate the rules for arbitration. The Act provides that once the parties have signed a consent order or agreement to arbitrate, the court will designate an arbitrator if they cannot agree upon an appropriate arbitrator and the arbitrator will select the rules for arbitration if the parties are unable to agree upon the rules to govern the

4 arbitration. The hot tip is to have the parties agree to arbitration in the initial agreement and later embark upon the negotiations of the rules to govern the arbitration so that rules negotiations do not undo the parties agreement to resolve their dispute through arbitration. IV. Involve your arbitrator in drafting the agreement for arbitration rules. If the arbitrator has more experience with arbitration than the attorneys for the litigants, the parties may want to sign a consent order or agreement to arbitrate and, once the arbitrator is selected, involve the arbitrator in the process of negotiating the rules to govern the arbitration. A great deal of time and confusion can be avoided if potential problem issues can be addressed in a well-crafted arbitration rules agreement. An experienced arbitrator will raise issues to be decided and addressed in a rules agreement that less experienced attorneys may not anticipate. V. When serving as an arbitrator, make 90% of your decisions within 48 hours of closing the arbitration hearing. This is not only an arbitrator hot tip but also a judge hot tip. Being a good arbitrator is comparable to being an excellent judge. The difference is that an arbitrator will be out of work if he or she does not enter a well-reasoned and just award in full compliance with the arbitration agreements and does not do so in a relatively short period of time. Time is money and a quick turnaround on an arbitration decision can be critical. VI. Arbitrate preliminary matters by . is a wonderful tool for arbitrating matrimonial cases. Attorneys inexperienced with arbitration will often stumble into an ex parte discussion with the arbitrator about the case in the beginning. This is understandable since most attorneys have far more experience with mediations than with arbitrations and ex parte communications are less problematic in mediations. is a great way to handle conflicts of interests checks and other matters preliminary to the actual arbitration session. Every communication to and from the arbitrator is copied simultaneously to all attorneys. VII. Summarize contentions of parties issue-by-issue and circulate these contentions for a response before finalizing the award. Arbitration is a client friendly process. While a party may be unhappy with the final arbitration decision and award, he or she is almost always happy with the process. One reason class=section3> for the increased comfort level is the relative informality of the process. Another reason is the client perception that he and she have been heard and their concerns addressed. Include a section in the arbitration award and decision for Contentions of the Parties. Take each issue and summarize each party s contentions on that issue. Provide copies of the contentions to the parties through their attorneys before the final award is entered and invite comment on the contentions. While it is likely that at least one of the parties will be unhappy with the final decision, neither should feel that his or her respective contentions were misunderstood by the arbitrator.

5 VIII. Arbitrate your appeals. The default provision under the North Carolina Family Law Arbitration Act is that the parties waive their rights to appeal the arbitration decision and award. Finality attracts many litigants to the arbitration process. Some parties are uncomfortable with vesting this much authority in an arbitrator and choose to provide that all or some issues may be appealed to the state appellate courts. As an appellate safety net, the parties may choose to arbitrate any appeal. One or three arbitrators can be designated to consider any appeal of the substantive determinations in the arbitration decision and award.

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