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Sanders & Rush: Advantages of arbitration during COVID-19

sanders-mary-roby-col-sigThe world as we know it has been forever changed by the COVID-19 pandemic. Courts have been closed to the public for an unprecedented 10 weeks and counting, and litigants are left with little certainty on when they may get a court date, especially in family law matters.

While the courts are left rescheduling months of cases, family law attorneys and litigants may want to start considering alternatives to litigation – mediation and arbitration.

While mediation is a beneficial process if the parties are able to work together to reach an agreement, not all cases can be mediated; if neither party will budge from their “line in the sand” then mediation provides little solace to an already difficult situation.

rush-nicole-col-sigArbitration, on the other hand, may provide the parties’ with their “day in court” without having to wait a year or more for that day to come.

Arbitration in Maryland is governed by the Maryland Uniform Arbitration Act (“MUAA”). It is codified in the Md. Code, Cts. & Jud. Proc. §§ 3-201 – 3-234. It is a voluntary process that both parties must agree to utilize, but once agreed to, it is binding.

The parties have the ability to choose their own arbitrator, which could be a retired judge or a seasoned attorney as an arbitrator. If the parties have specific issues in their case, they could pick an arbitrator that has knowledge or expertise in that area.

Think of the time savings when you do not have to educate the trier of fact about the process to value a business. You can focus only on the variables that matter, guaranteeing a faster and more effective process.

The parties will need to enter into an arbitration agreement to outline the process and ensure that the arbitrator’s decision will be binding on the parties. The parties can also set their own rules. These rules will be outlined in the arbitration agreement that has been agreed to by both parties. The rules can include the ability to conduct discovery, issue subpoenas, and compel the appearance of witnesses.

The arbitration agreement can also detail the procedures that will be utilized in the arbitration, whether there will be openings and closings, meetings between the arbitrator and individual parties, the rules of evidence that will be utilized, and the deadline for a decision to be reached. The parties, with the agreement of the arbitrator, can conform the process to fit their needs.

Family law issues

In family law cases, the parties can resolve all outstanding issues regarding their separation and divorce, including custody, support, alimony and property distribution. They may also choose to arbitrate limited issues, i.e., the value of a business and a fair property distribution or an alimony award.

In many cases the parties set a budget for the arbitration process, for instance, telling the arbitrator we have $2,500 to decide what income should be imputed to the wife for calculation of alimony and child support. Once this issue is definitively decided, the parties believe they will be able to resolve the rest.

The court treats an arbitration decision akin to a settlement agreement reached by the parties. Except as to matters affecting the best interests of children, a valid settlement agreement may be made part of a judgment for divorce without the chancellor having to make independent findings, provided the agreement is not facially unjust or inequitable. Jackson v. Jackson, 14 Md. App. 263, 269, 286 A.2d 778 (1972).

An arbitrator can make a decision on child custody and child support, but a judge must exercise independent judgment with respect to matters concerning the best interests of children. Kovacs v. Kovacs, 98 Md. App. 289 (1993).  So if the arbitrator is not biased, or a crook, the arbitration decision will stand.

Why would a party risk submitting its matter to arbitration? Other than the ability to select your “judge” and control the rules and scope of the arbitration, in today’s times it may allow you to have a resolution in a relatively cost and time efficient manner.

If your case was prepared to move to trial and was postponed because of the court closure, it will not be reset for months. All the preparation will need to be redone, costing the clients thousands of dollars.

Instead you can opt to arbitrate and have a resolution promptly. Even if some additional work needs to be completed prior to the arbitration, the cost and time savings for a client can be immense.

Finally, since the arbitration is done by the agreement of the parties, it can allow the parties to dictate the time frame for the ruling, so that the parties will know when they will receive a ruling.

For more information about potential family law arbitrators, contact the Maryland Chapter of the American Academy of Matrimonial Lawyers (AAML.org) to obtain a list of their Fellows who are certified arbitrators.

Mary Roby Sanders is a partner at Turnbull, Nicholson & Sanders, P.A., specializing in family law. Nicole E. Rush is an associate at Turnbull, Nicholson & Sanders also focusing on family law.