NJ Family Legal Blog : New Jersey Divorce and Family Lawyer & Attorney : Fox Rothschild Law Firm : Domestic Violence, Prenuptial Agreements, Child Custody

Today I came across a blog entry by a divorce mediator which was nothing short of an attack on "best lawyers."  It appeared as though the ills of the divorce world were placed at the feet of the best divorce lawyers. Lawyers were castigated for such sins as discovery (obtaining financial documents) and seeking court assistance when you want temporary support or time with the children. He said that any lawyer can get the same result and that hiring a good lawyer sets the client up for a racket that is in the lawyer's best interests, but not the client's.

Unfortunately, this is not the first time that I have seen attacks on lawyers from the mediation community.  There appears to be a turf war.  Either you are mediation friendly, or you are not.    Rather than recognizing that some cases are more amenable to mediation than others, the followers would rather attack the "non believers."  

While I agree that most cases will settle, many cases take a fair amount of discovery and litigation to get there. To believe otherwise is simply naive. 

Further, while mediation is not for everyone, it is a useful tool in many cases, Then again, just as not all attorneys are alike, neither are all mediators.  In fact, I suspect that the author of the blog that I read would agree that not every mediator can get the same result - though he says that any lawyer can. 

In a prior blog from May 2009, I wondered whether the mediator's goal was a fair settlement or just a settlement.  To see another blog post on mediation that I authored, click here.  Are parties, often the woman being protected from the imbalance of power that permeated the marriage?  Are people being told of their rights when they appear at mediation without lawyers?  What efforts are made to ensure full and accurate disclosure?  Are the appropriate appraisals being done at all, and when done, are they being challenged and scrutinized to make sure that they are fair and accurate? 

There is no doubt that mediation and other methods of alternate dispute resolution can be a good thing. That said, I have often seen mediations result in a "settlement", but one where the disadvantaged spouse got a "deal" that was neither fair nor reasonable, if not unconscionable. The problem in these cases is that often, once there is an "agreement", the person that got the great deal refuses to concede anything. Thus, a method meant to avoid litigation can often create litigation.  Many of these deals came from the "best mediators." 

That said, rather than attacking lawyers, mediators should recognize that there is a place for the best attorneys and the best mediators.  I posit that the best and most fair mediated settlements will result from the attorneys and mediators working together rather than attacking each other.  I am sure that we can all agree that a fully informed settlement, where both parties interests are fully protected, is optimum. 

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Previously both Jennifer Millner Weisberg and I blogged on a highly publicized New Jersey family law case, Fawzy v. Fawzy.  To read my prior post on this case, click here.  To read Jennifer's post, click here. 

For those of you who may not be familiar with Fawzy, this matter involves parties who opted to participate in binding arbitration as to all outstanding issues in their matter, including a determination of custody and parenting time, as opposed to proceeding with a trial.

Alternate dispute resolution is another method by which parties who have outstanding legal issues between them can select a mutually agreeable individual to serve as a mediator and decide the issues, rather than sit through and bare the expense of an expensive and often lengthy trial.  Alternate dispute resolution methods, such as arbitration, are available in nearly every area of the law and not limited to family law matters. People prefer arbitration because it may resolve issues more expeditiously than otherwise having a trial.  In addition, the arbitration process can be more informal than deciding issues in a courtroom before a judge.  Our courts encourage arbitration as a substitute for litigation.  Arbitration conducted by an individual of the parties' own choosing is often less antagonistic than litigation and may minimize the harmful effects of divorce litigation on a family.

In Faherty v. Faherty, 477 A.2d. 1257 (1984), the New Jersey courts approved the arbitration of alimony and child support issues.  So when the Fawzy's decided to arbitrate the issues of custody and parenting time- what was the problem?

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Previously I blogged on the issue of mediation and my skepticism of the process under certain circumstances.  This week there was a spirited discussion regarding the issue of mediation on the New Jersey State Bar Association Family Law Section listserve.  As a result, I thought it would be wise to highlight some of the issues again.

To frame the issue, the bigger debate surrounded the practice where a couple goes directly to a divorce mediator or some other trained mediator, without attorneys.  Some of the things that raised concern were as follows:

1. Some mediators are concerned not whether the mediation is fair, but rather, simply that the parties reached a settlement
2. Number 1 would be less troubling, except that many mediators are not telling the party receiving an unfair deal that it is unfair
3. Rather, apparently, for many mediator's, the phrase, "I think you should discuss this issue with a lawyer" is code for the resolution of this issue or this case is unfair.  However, people go to mediators to avoid lawyers and/or there is an undercurrent among mediators that divorce lawyers really are not looking out for the parties' interests.  Moreover, some parties think that if a mediator is not putting a stop to the mediation when something is unfair, that it must be fair.

There was also a concern that the imbalance of power in the marriage that naturally is creeping into the mediation is being ignored.  A perfect example is in a case where alimony, perhaps permanent alimony is a no brainer, yet the wife is willing to waive it in mediation.  Is anyone asking why?  Did the husband vow to never pay alimony?  Was there a threat to "go after custody" if a spouse sought alimony?  Did one spouse say "I spoke to a lawyer who said you weren't entitled to alimony" as a means to deter the other spouse from seeking it?  Was the other spouse given access to money to consult their own attorney?  I once represented a woman in a post-judgment matter whose husband would not give her money for the attorneys she wanted to see, only for mediation and then an attorney he hand selected for her to draft the Agreement.  It was not shocking that the "mediated agreement" included a waiver of alimony and the child going to school where the husband lives, when the child was of school age, despite the fact that the wife was the primary caregiver. 

I have also seen many a  complex matter where one party is pushing for mediation and there hasn't even been the most basic exchange of information at that time, much less formal discovery. I have even seen cases where the party with the documents will not provide them in advance of mediation and will only bring them to mediation and take them with him at the end. The better practice, and the better mediators require, parties to have attorneys involved from the start of the mediation so that both parties are fully informed about the law and the process and so that any imbalance of power can be rectified with an attorney protecting the weaker party.

There is no doubt that mediation and other methods of alternate dispute resolution can be a good thing.  That said, I have often seen mediations result in a "settlement", but one where the disadvantaged spouse got a "deal" that was neither fair nor reasonable, if not unconscionable. The problem in these cases is that often, once there is an "agreement", the person that got the great deal refuses to concede anything. Thus, a method meant to avoid litigation can often create litigation.

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Mark Ashton, a partner in our Exton, Pennsylvania office, and the editor of the firm's Pennsylvania Family Law blog, wrote an interesting post on that blog entitled Mediate, Arbitrate, Negotiate:  What's a Client to Do?" To read the post, click here.

Mark's blog entry goes through the options of alternate dispute resolution.  Like Pennsylvania, in New Jersey, there is very limited review of an arbitrator's decision.  However, parties can agree to an appeals type process.  However, that appeal would be to a trial court, not the Appellate Division as we recently learned in the reported case of Hoogoboom.  Moreover, in New Jersey, you can mediate, but you cannot arbitrate custody and parenting time disputes.

Also, in my experience, arbitrations are very much like trials with the arbitrator serving as the judge.  While you can agree to relax the rules of evidence and the arbitrator, under the arbitration act can choose to relax the rules, most often unless people agree to proceed in some kind of summary format, an arbitration proceeds in the same manner as a trial in a Court would.

That said, the benefits of an arbitration noted in Mark's post are the same.

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On Tuesday, February 3, the New Jersey Supreme Court heard arguments on the Family Law case of Fawzy v. Fawzy. This case was originally reported by Sandra Fava of our Roseland office this past summer when the Appellate Division determined that a court did not have the ability to permit parents to submit to binding arbitration on the issue of custody. To read Sandra's original post, click here.  To read the full text of the Appellate Division's decision in the case, click here. 

The Supreme Court granted certification. Both sides offered excellent arguments for and against the issues.

In this case, Mr. and Mrs. Fawzy agreed, in the courthouse, and in front of a judge, to submit the issue of custody to an arbitrator.  As Sandra mentioned, the parties were scheduled for a trial date in early 2007.  When they appeared in Court on this date, they agreed to submit all issues in contest to an arbitrator for binding, final, non-appealable arbitration pursuant to this state's statute governing arbitration (N.J.S.A. 2A:23B1 to 32).  They, along with their respective attorneys appeared before the judge that same day and placed this agreement on the record.  The judge clearly advised them that the arbitrator's decision would be final and could not be changed.  The parties agreed and went forward. They went to a well respected arbitrator who specializes in family law. Subsequently, Mr. Fawzy, who did not like the way things were going, moved to vacate the arbitrator’s decision, contending that issues such as the custody of children could not be subject to arbitration. The Appellate Division agreed. 

But what of the future? Arbitration can proceed with the same formality as a court trial or in some cases, with a more relaxed structure. However, the process is something that is agreed to by the parties in advance order to insure fairness. In a nutshell, the strong public policy in New Jersey is such that the Courts favor settlements between parties through alternative dispute resolution, of which arbitration is one example. In arbitration, the parties agree to have an arbitrator, rather than a judge, decide issues. There are many instances other than the matrimonial context in which arbitration is utilized and has been for many years in New Jersey. There are laws concerning the use of arbitration. However, it is only in the relatively recent past that arbitration has been commonly used to resolve matrimonial issues. This is obviously due to the sensitive nature of family proceedings. At the current time, there is no statute which specifically governs arbitration in family cases.  Utilizing arbitration for custody seems to be the next logical step in alternative dispute resolution for matrimonial cases.

The central issue is whether a judge, who stand in a parens patriae, or protective role, can in effect delegate his or duty to make a determination as to custody to an arbitrator. There have been previous cases in which the courts have been prohibited from allowing a parenting coordinator from making decisions as to custody and parenting time. Is it right for  litigants to be able to agree to allow a third party other than a judge the authority to make a custody determination on these issues? There are certainly arguments for and against.

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This week in an opinion published by the Appellate Division, the Court  held that parties in a matrimonial action cannot agree to binding, non-appealable arbitration of child custody and parenting time issues.  Any such agreement would violate the Court's parens patriae obligation to protect the best interests of the children.

In the matter of Fawzy v. Fawzy,  the parties were scheduled for a trial date in early 2007.  When they appeared in Court on this date, after several hours of discussion, they agreed to submit all issues in contest to an arbitrator for binding, final, non-appealable arbitration pursuant to this state's statute governing arbitration (N.J.S.A. 2A:23B1 to 32).  They went before the judge that same day and placed this agreement on the record.  The judge advised them that the arbitrator's decision would be final and could not be changed.  The parties agreed and went forward.

The parties selected an arbitrator and began the process.  After several days into the proceeding, Mr. Fawzy sensed things were not going well for him and filed an emergent application with the Court to restrain the arbitrator from making a custody and parenting time award.  His argument was that these issues could not be arbitrated as a matter of law.  The trial judge denied his application.

Shortly thereafter the arbitrator issued a custody and parenting time award in Ms. Fawzy's favor.  Mr. Fawzy retained new counsel and filed a second emergent application seeking to vacate the arbitration award, disqualify the arbitrator, restrain the arbitrator from any further participation, require a de novo review of the reward and stay the award pending appeal.  The trial judge once again denied his application and entered an amended judgment of divorce confirming the arbitrator's award.  Mr. Fawzy then filed his appeal.

On appeal, Mr. Fawzy argued that as a matter of law, parties cannot bargain away the Court's obligation to review the best interests of the children by agreeing to binding arbitration of custody issues.  The Court noted that it was troubled by the fact that Mr. Fawzy did not make any claims that the award would cause harm to his children or in any way endanger their health, safety or welfare.  Despite that concern, the Court agrees that parties to a matrimonial matter cannot enter into an agreement to submit custody issues to final, binding, non-appealable arbitration.

While our courts have endorsed arbitration as a favored remedy and have encouraged the use of various alternative dispute resolution devices, the question of whether child custody could be submitted to final, binding arbitration has not before been addressed by the Court.  The Court has favored the use of final, binding arbitration for alimony disputes as seen in the 1984 opinion of Faherty v. Faherty, however they did not address the issue of custody directly at that time.

In conclusion, the opinion notes that while the development of a more workable custody arbitration process may be more beneficial to both the parties and the children involved in a matrimonial action, the Court ultimately must defer to their traditional parens patriae role.  That role requires the trial court to determine the best interests of the children regardless of any agreement for arbitration as to custody and parenting time.

While binding arbitration is a viable and useful alternative to litigation for the purpose of resolving financial issues related to equitable distribution and alimony, issues concerning and relating to the best interests of a child cannot be submitted to binding, final arbitration.  When considering arbitration as an alternative to traditional litigation, make mental note of its restrictions.

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Some times, despite all of the parties' best efforts - or in other cases, where one or both parties have no desire to settle, a case has to be litigated.  Trials are costly, for reasons you would think of, and also, for reasons that most people don't consider.  A good rule of thumb is that for each day of trial, there will be one or two days of time for preparation.  When you consider that both parties have to testify, as well as accountants, business appraisers, custody evaluators, real estate appraisers, employability experts, as well as a whole host of lay witnesses depending on the issues involved in a case, the actual known costs can be substantial. 

The hidden costs are the time spent waiting around.  Often times, you may be in the Courthouse from 8:30 a.m. to 4:30 p.m., and with interruptions, other matters and breaks, you only get a 3 or 4 hours per day of trial time.  Additionally, it is not uncommon for trial dates to not only be non-consecutive, and sometimes, there are several weeks if not months between dates.  I am currently in the midst of a trial where we had one half day in October 2007, another half day or less in January 2008 and another date scheduled for April.  Each time you go back, you have to re-prepare. 

While some cases that require a decision need to be arbitrated because the parties may not want to present certain issues to a Court, other cases that require a decision may be good candidates to avoid the above delays.  Often with arbitration, you can select days if not weeks in blocks thus condensing the time that the process takes.  In addition, without the interruptions that you will inevitably have in a court, the time spent at the arbitration can actually be spent arbitrating.

In advance of the arbitration, the parties can decide whether they want it to be binding (i.e. essentially, what the arbitrator decides goes) or whether there is a right of appeal.  The parties can decide whether then want a court reporter present or not.  The parties can even designate the scope of an appeal.  While the arbitration act provides a very limited scope of review, parties can agree that the decision can be appealed for the same reasons as could a judicial decision be appealed.  However, in what was made clear in a 2007 reported decision, the parties cannot confer jurisdiction to hear the appeal on the Appellate Division. Rather, the matter would have to be decided by the trial judge.  Click here for a copy of the case.

I recently completed a more than 10 day arbitration and the experience was extremely positive, for all of the reason expressed in this post. 

In any event, while there could be added costs associated with paying an arbitrator and court reporter, if the arbitration can be done more efficiently, if not more quickly, than a trial, it is a viable option in the right case. 

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