Matrimonial Arbitration is a form of alternate dispute resolution (ADR). ADR seeks to resolve disputes utilizing a facilitator or tribunal who is not a judge. Sometimes, cases are submitted to ADR without a court action even being filed, in which case, it operates outside of the system and wholly on its own. When the parties resort to ADR during the pendency of the case, while the courts have some control and responsibilities, the process itself takes place in an ancillary fashion to the system.

                Let’s define terms.

1.            On one end of the spectrum of ADR is mediation, that is, where a third-party attempts to facilitate an agreement between the parties. Nothing is binding if and until an agreement is reached and (usually) reduced to writing and signed by the parties.

2.            On the other end of the spectrum is binding arbitration. This is a process of dispute resolution involving a “rent-a-judge” who is appointed by the parties to hear the matter (much as if the parties were in court) and render a binding determination (as distinguished from a decision by a trial court). While the parties can tailor the choice of the arbitrator to the circumstances of the case, only in limited circumstances is an action of the arbitrator appealable.

3.            In the center between the two is non-binding arbitration, that is, where a third-party makes a recommendation for settlement which is not binding. The parties can accept it; reject it; or use it as a basis for further negotiation. In New Jersey, this is essentially the function of Early Settlement Programs established in each county to aid in the settlement of matrimonial actions.

                Note, then, the differences:

                         Type of ADR                               Type of Result

                         Mediation                                            Negotiation

                         Non-binding arbitration                 Recommendation

                         Binding arbitration                          Determination

          

 Now, a little about the history of ADR in the family courts of New Jersey. In 1977, the Morris County Bar Association started the first Matrimonial Early Settlement Program (MESP) in New Jersey, and possibly, in the country. It worked so well that in 1981, the New Jersey Supreme Court Committee on Matrimonial Litigation recommended to the Court (and the Court embraced that recommendation) that all counties have MESPs.

In 1984, the Supreme Court of New Jersey rendered its decision in Faherty v. Faherty, in which it posited that arbitration of non-custodial issues in matrimonial cases was perfectly permissible. Being the first decision of its kind in the country from a major court, for a long time, it fell on deaf ears.

Based on the further recommendation of the Supreme Court Family Part Practice Committee, in 1985, the Court promulgated a rule mandating the bar associations in each county to establish and run an MESP.

While binding arbitration had not yet taken hold (and in fact, was still at that point almost non-existent), by the 1990’s, MESPs were an integral part of the system. To further aid in the resolution of cases without the necessity of trial, the Supreme Court mandated establishment of matrimonial mediation programs in each county.

By the late 2000’s, both mediation and MESP programs were on a roll. Keeping in mind that something like 99% of matrimonial cases settle, both of these programs have been (not just instrumental but) vital in the settlement of a huge percentage of these cases.

So, in this context, in 2008, Justice Long, speaking for the Supreme Court in Fawzy, expanded the permissible role of arbitration of matrimonial matter to now include custody issues which, under Faherty, had not then been sanctioned. Again, our Supreme Court was in the forefront across the country in this endeavor. In Fawzy, the Court established various specific procedures for the arbitration of custody issues. It further charged its Family Part Practice Committee with drafting an arbitration agreement consistent with Fawzy requirements. The Committee will be reporting to the Court on this issue later this spring.

Now enter Manger v. Manger, rendered by the Appellate Division about a week ago. In that case, the arbitrator made a determination which encompassed equitable distribution of a business, alimony, and counsel fees, but without expert testimony and coupled with the exclusion of various proffered documentation. The Wife appealed to the Appellate Division from an order of the trial court which confirmed the custody determination of the arbitrator. The gravamen of the Wife’s claim was that the arbitrator had committed misconduct by refusing to allow the documents proffered by her, and by rendering the determination without the benefit of expert testimony as to the business. Before proceeding on to discuss the merits of the matter (which were not at all unusual or exciting), the opinion of the appellate court first focused on the technical issue of which statute was applicable to this case — the Uniform Arbitration Act or the Alternative Procedure for Dispute Resolution Act — resolving the issue in favor of the former.

Except for the importance of the issue of the applicable statute, this case was not particularly enlightening. That makes it all the more curious as to why the rendered opinion fell in the “published” category, thus becoming binding precedence in our law. It can only be reasoned that the appellate court, following on the lead of our Supreme Court, is signaling that matrimonial arbitration is now being mainstreamed as an effective tool of ADR.

The future development of matrimonial arbitration will be an interesting and dynamic process. Stay tuned.
 

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