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.