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.

On the one hand, the court system is fraught with delays and scheduling difficulties. Consecutive day trials are in effect non-existent which makes an already painful divorce take a long period of time with it’s stops and starts. Arbitration can offer a faster, more efficient method to resolve issues. As the parties have to pay the arbitrator, it may or may not not be less expensive. However, arbitration, both binding, and with a right to appeal has been successfully utilized by many litigants for the financial aspects of their divorce.

So then, should the ability to utilize arbitration be extended to custody and parenting time issues? There was certainly an acknowledgment that arbitration may be an effective way to resolve these issues. However, I am sure that before arbitration is permitted in this area, there must be safeguards in place to assure that there a mechanism to make sure the children are protected in the event of an arbitration decision which is contrary to the best interests of the child(ren). Litigants currently have a right of appeal from a trial court’s decision, and it seems reasonable that there should be a method to make sure the children’s best interests are protected in the event of an arbitration decision which is may be erroneous. This may be an area where arbitration is appropriate, but binding arbitration may not.

The issue of what is an appropriate requirement for record keeping must be addressed. There may be requirement to have the session recorded so that a reviewing court can later have a way to understand what happened at the arbitration. Is there a basis for requiring special training for an arbitrator who will be involved in these types of cases? Should there be specific requirements of the arbitrator in connection with a decision? Should it be written? Should he or she have to make specific findings as a judge does? These are all questions that the legal community are waiting to be answered. I look forward to reporting back to you once the Supreme Court speaks.