Family arbitration to draft a letter of instruction

15th April 2019 Family Law

Specific issue arbitration is perfectly proper and appropriate even in cases that are proceeding through the court system.„ So said Mr Justice Moor in a short judgement determining a dispute over the wording of a letter of instruction.

What is a letter of instruction?

It is a letter sent to an expert hired to give an opinion in court proceedings on a subject it cannot decide simply by hearing evidence from the parties and other lay witnesses. In financial proceedings connected with divorce we often need assistance from experts such as surveyors to value property or forensic accountants to give an opinion on how much a business is worth.

The letter of instruction gives the expert essential facts and practical information and usually includes a list of questions they will be expected to answer. Although the drafting process can be quite fiddly, it is rarely contentious.

Why did this couple end up in court about it?

Without a letter of instruction, the expert cannot start work on their report. Without a report on a substantial issue (in this case the value of companies owned by the parties) the court cannot make a decision on how to divide the assets on divorce.

One party’s solicitor drafted a letter of instruction that followed the terms of reference for the report set by the judge at the first appointment (a hearing designed to assess what financial information is currently available and what further evidence is needed to the decide the case). The other party’s solicitor substantially amended and added to it and missed a deadline for doing so.

An impasse was reached and both parties applied to the court to resolve the drafting issue.

What did the judge say?

First and foremost the judge was not happy to be asked, effectively, to draft a letter of instruction. He said that he received the applications to the court “with dismay„.

Among many amendments, the applicant had asked to be present at meetings between the independent expert with her legal team. The judge considered this “thoroughly inappropriate„ but, recognising her lack of trust in the process, allowed one of her solicitors to be present with “observer status„ only. Other than that, the judge approved the letter of instruction as drafted by the respondent’s solicitors in the first place.

How should issues like this be dealt with in other cases?

The judge was pretty scathing of the application and felt that there really was no genuine issue between the parties. He had already determined the experts’ terms of reference at an earlier hearing. However, if there was a “genuine issue as to drafting„ the judge said this was “exactly the sort of matter that should be referred to an arbitrator„.

What is an arbitrator?

Arbitration is a form of non-court dispute resolution in which the parties to a legal dispute agree that instead of being decided by the courts, one, some or all of the issues between them will be resolved by an arbitrator. That arbitrator can make legally binding determinations that will, almost always, be upheld by the courts.

Although it is not right for every case, arbitration can offer more control over the process and a potentially faster outcome than if the dispute were to be decided by a court. Even simple applications to court can take a long time to be dealt with.. True, arbitrators do not give their time for free but if a legal dispute drags on for additional months while various issues are being decided this can be a source of expense in itself.

It will be interesting to see whether news of this decision will influence the profession and other judges’ approach to defined disputes like this. This is a strong endorsement of arbitration and one that could see more issues being handled this way.

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Grace Matthews is an Associate Solicitor located in Manchesterin our Family department

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