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?

Well, the answer is nothing, at first. However, after the arbitrator issued his decision, Mr. Fawzy filed an emergent application seeking a review by the trial court of this decision. When the trial court denied his request, he filed an appeal with the Appellate Division. The Appellate Division held that custody and parenting time issues cannot be submitted to binding arbitration. Mrs. Fawzy then filed a petition for certification with the Supreme Court of New Jersey and Mr. Fawzy cross-petitioned. That all occurred last summer. In February the Supreme Court heard oral argument on the matter and on July 1, 2009 their written opinion was published. To read the entire opinion, click here.

It has long been found that the right to parent a child is constitutionally protected and one of the fundamental rights of this country. However, this right is not absolute. Under the parens patriae doctrine, the state has an obligation to intervene when necessary to prevent a child from being harmed. The harm standard is a constitutional imperative that allows the state to intervene in what is otherwise a protected arena of parent-child relations.

In focusing on this fundamental right to parent a child, which includes decision making on behalf of a child, the Supreme Court held that parental autonomy includes the right of parents to choose the form in which to decide their disputes over custody and parenting time issues. This forum includes arbitration. In fact, the majority of states in the US have already addressed this issue and have concluded the parents may submit the issues of custody and parenting time to arbitration in the exercise of their parental autonomy. Just as parents choose to decide day-to-day issues among themselves, they may also decide to sidestep the judicial process by utilizing an arbitrator. This options allows parents to select an individual based on his/her familiarity with the family or understanding of the values that the parents may hold dear and have tried to follow when raising their child.

The right to submit these issues to arbitration is not without boundaries. Fawzy now tells us that: 1) an agreement to arbitrate must be in writing or recorded and must establish that the parties are aware of and have knowingly and voluntarily waived their rights to a trial; 2) a record of documentary evidence adduced during the proceedings must be maintained; 3) testimony must be recorded; and 4) the arbitrator must issue findings of fact and conclusions of law with respect to the award. The arbitrator’s award is subject to review under the Arbitration Act, N.J.S.A. 2A:23B-1 to -32, except that a judicial review is also available if a party can establish that the award threatens harms to the child.

What exactly is the standard of judicial review? Where no harm to the child is threatened, there is no basis to infringe upon the parents’ choice to be bound by the arbitrator’s decision and the parties are limited to the Arbitration Act’s remedies. If a prima facie case of harm is advanced, the court must determine the harm issue. If no finding of harm ensues, the award is only subject to review under the Arbitration Act standard. If the court finds harm, the presumption favoring the parents’ arbitration choice will be overcome and the court must decide what is in the child’s best interests.

To ensure an accurate record is kept, the decision dictates that a verbatim record must be kept of those portions of the arbitration proceedings that relate to custody and parenting time issues only. In addition, the arbitrator must also state in writing or otherwise record findings of fact and conclusions of law with a focus on the best interests standard. An arbitration award regarding custody and parenting time issues that is a result of any other procedure not specifically mentioned herein will be subject to vacation upon motion.

What does Fawzy mean for family law practitioners? It provides another forum to decide issues in what tends to be a more informal, less intimidating, and sometimes faster manner than traditional litigation. Practitioners must be mindful of the specific requirements to the arbitration of family law issues so as to protect the determination.

What does Fawzy mean for litigants? Again, it provides another forum to decide those issues in what may be a more informal, less intimidating and sometimes faster manner than traditional litigation. It also puts mechanisms in place so that the decision of the arbitrator is final and if the rules set forth herein are followed, the decision may be protected assuming there is no harm to the child.
EDITOR’S NOTE:  IT WILL BE INTERESTING TO SEE HOW THIS PLAYS OUT IN PRACTICE.  REQUIRING VERBATIM RECORDINGS AND SPECIFIC AND COMPREHENSIVE FACT FINDINGS WILL ADD A NEW LEVEL OF COST TO THE MATTER. RECENTLY I HANDLED A 10 PLUS DAY ARBITRATION WHERE THE COURT REPORTERS FEES WERE MORE THAN $25,000.  THIS COST IS IN ADDITION TO THE COST OF THE ARBITRATOR WHO WILL PROBABLY CHARGE BETWEEN $325 AND $575 PER HOUR.  MOREOVER, I SUSPECT THAT THE LOSING PARTY WILL SIMPLY ARGUE HARM, ATTEMPTING TO MAKE BINDING ARBITRATION NON-BINDING    ERIC S. SOLOTOFF

One Response to New Development in Family Law Arbitration

Good to know some vital facts on arbitration. I will tray to make use of arbitration process and avoid the courtroom hassles to solve issues.

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