New divorce service will 'spark a sea-change' in how separation is handled

The first fixed-fee arbitration service, designed to appeal to middle-income divorcing couples, has been launched by Hodge Jones & Allen (HJA).

The new service is the latest offering from HJA's 'Continuous Innovation Programme' and follows the green light given by the president of the Family Division, earlier this year, for financial settlements in divorce to be arbitrated.

In January, Sir James Munby confirmed in S v S [2014] that a settlement reached through private arbitration would stand in a court of law and could not be appealed.

The family team at HJA has been the first to take advantage of this guidance and has launched its arbitration service, which is aimed at providing a cheaper, faster alternative to court proceedings while ensuring a legally binding outcome for both married partners and cohabiting couples.

Toby Hales, a partner and head of the family team at HJA, said: "It is clear that the court system just doesn't work for middle-income families. The impact of the delays and inflated legal fees associated with agreeing a financial settlement in divorce proceedings leads either to financial hardship or an avoidance of the judicial process altogether, which results in unsatisfactory financial settlements."

'Appalling profligacy'

Earlier this year, High Court judge Mr Justice Holman issued a critical rebuke over the conduct of the two parties in Seagrove v Sullivan [2014] EWHC 4110 (Fam) who had spent £1.3m between them on legal fees.

Holman J described "the appalling profligacy of their legal expenditure" in dealing with the issues that related to the breakdown of a 20-year relationship between an unmarried couple with three children. The main stumbling block between the parties was whether the woman had a 50 per cent stake in the former home.

Scolding the parties at the time, the judge said: "What are they arguing about? They are arguing about a claimed half share in an asset that may be worth around £1m. So they are arguing about £500,000. What they have incurred in costs is not far short of three times the amount in dispute."

Both solicitors act on the same fee in fixed-fee arbitration, so there is no incentive to engage in a drawn out fashion. HJA is hoping that such a behavioural change along with the benefits of a neutral setting, such as a hotel, will make for a less aggressive and more conciliatory separation.

"Our clients needed an alternative to the court process which was taking its toll both financially and emotionally and so we have listened to their requirements and have developed a practical service that is both swift and economically predictable," said Hales.

"For 'Mr and Mrs Sensible' who are not up for a court battle it is an optimal solution providing access to a binding legal agreement with a fixed-fee and a time promise. We hope that other family law practices will sign up to offer arbitration for financial settlements to divorcing clients and that this will spark a sea-change in how separation is handled."

John van der Luit-Drummond is legal reporter for Solicitors Journal

john.vanderluit@solicitorsjournal.co.uk