Alternatives to Court: Mediation and Arbitration

A divorce or legal separation doesn’t require a court hearing to decide how to divide the property, who gets custody of the kids, and how often visitation can happen. In fact, litigating a divorce in court is a last resort and the least common way to resolve the logistics of a permanent separation.

Options for alternative dispute resolution (ADR), such as mediation and arbitration, can help both partners reach solutions they can live with in a private and less acrimonious way. In some states, ADR is required before you can get a hearing in family court.

What Is Mediation?

Mediation is a process in which an impartial professional helps both parties reach mutually agreeable solutions to the issues in their divorce or separation. Mediators help both parties discuss their preferred outcomes but do not make decisions. You can try to resolve matters such as division of assets, division of debts, child custody, child support, and alimony through mediation. Any issues that you agree on in mediation will be memorialized in a nonbinding memorandum of understanding that your mediator draws up.

Besides a do-it-yourself divorce, mediation is the least expensive way to end a marriage, because the only person who you have to hire is the mediator. However, even though you don’t have to hire legal counsel for mediation, you may want to do so. The mediator must be impartial, which means that they can’t offer either party any advice. 

You can always try mediation first and potentially resolve certain issues there, then take your remaining issues to an arbitrator.

What Is Arbitration?

If you and your partner can’t agree on outcomes, arbitration may be your next best option. While mediation is nonbinding, arbitration allows for judgments. You and your partner will first need to agree on the choice of an arbitrator, who will act as a private judge. An arbitrator needn’t be an actual judge; they could be an attorney or accountant, among other options.

During arbitration, each partner may present evidence and employ witnesses to support their position, making it feel similar to a trial and more contentious than mediation. The arbitration agreement must carefully follow detailed requirements. Ultimately, a public judge must approve your arbitration agreement to make it legally binding.

Pros of Mediation and Arbitration

• They can save time and money. Litigating your divorce in court could draw out proceedings over a year. Alternative dispute resolution could wrap up your divorce within weeks. Even if you hire legal counsel, avoiding trial can help preserve assets, as your legal bills for appearing in court can be substantial.
• They help keep family matters private. Litigation becomes a matter of public record. Mediation and arbitration are more likely to maintain your family’s confidentiality.
• They can be less stressful for children. Taking child custody issues to court means leaving decisions up to a judge. The outcome may not be what the children or parents would prefer. A trial is also usually more acrimonious and can leave children feeling caught in the middle or hostile toward both parents.
• They allow both partners to retain control over outcomes. In litigation, a judge may resolve your issues in ways that neither you nor your partner like. Mediation and arbitration give you more control.
• They’re not all-or-nothing. You don’t have to resolve 100% of your issues outside of court for mediation or arbitration to make your divorce or separation easier.
• They don’t preclude going to court later. If you can’t work out certain issues in mediation or arbitration, you can take the unresolved matters to court. 

Cons of Mediation and Arbitration

• You may still want to hire a lawyer for advice. While ADR may be less expensive than going to trial, you may still want to hire legal representation to help you get the best outcomes. Hiring a lawyer at an hourly rate may save you money over paying them a retainer.
• They won’t succeed if both partners aren’t willing to work toward solutions. Mediation and arbitration require compromise.
• You can’t appeal an arbitrator’s decision. The courts will generally uphold the arbitrator’s decision, even if one spouse is unhappy about it.
• It may be easier to hide assets and liabilities. If either partner is concerned about hidden income, assets, or liabilities resulting in an unfair settlement, then going to court may be a better solution because financial records can be subpoenaed.
• They may not be appropriate when abuse is involved. If physical violence, emotional abuse, or substance abuse play a role in the divorce, then a judge’s orders may be the best option for protection.
• The outcome of mediation is not legally binding. You must get a consent order from a judge for your agreement to be enforceable.

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