Resolving family disputes for business owners in a pandemic
15th December 2020
This blog builds on an earlier post which introduced readers to the benefits of various non-court dispute resolution approaches (referred to in this blog as ‘DR’) which can be utilised by warring family business members.
At the time that blog was published no one in the family justice world knew what laid in store for 2020. For those forward thinking organisations and practitioners who already worked innovatively, offered the full spectrum of DR options, and had the embedded infrastructure to do so, they were much more able to adapt to ongoing challenges with reduced impact on those requiring legal and practical guidance from them. For others, in particular the court service (and those who predominantly rely on it) with its archaic IT infrastructure and over reliance on court users appearing in person, the pandemic has had a much greater negative effect. Business owners who earlier in the year needed decisions to be made in their private lives to allow them to focus again on their business may still be finding themselves in flux and without a resolution.
The current state of the courts
As referred to above, the court system was not well placed to respond to Covid-19. Backlogs of cases have considerably worsened given:
- A huge reduction in hearings to maintain social distancing in courts, and virtual hearings being at a reduced level due to a lack of administrative support.
- The prioritisation of urgent matters only; for example where social services are involved, or injunctions are required to keep vulnerable people safe. Financial cases have taken a back seat, even where time-critical business decisions need to be made and stalemate persists with their shareholder/director spouse.
- Delays in following up hearings and progressing matters as court officers self-isolate. One court in the summer noted 5 month delay in processing divorce paperwork.
- Adjourning a greater number of final hearings where the judge felt that justice could not be done if the hearing was dealt with remotely and/or the IT equipment was simply not available, particularly in provincial courts.
Although some solicitors have seen the great benefits of working remotely, often for the first time, the same cannot be said for a great number of court users. The Nuffield Family Justice Observatory in October reported that 66% of parents involved in remote hearings felt that their case had not been dealt with well and 40% said they had not understood what had happened at the hearing. The report also noted that the court system has been unable to provide an empathetic and supportive environment for some of the most challenging and personal cases, and the focus has unfortunately become far too focused on ‘administration adjudication’. Although DR has also been mainly online, the processes involve fewer people and with less formality which is likely to support and bind those people in to the process to a much greater extent.
Taking account of the above, it is therefore not surprising that the courts are wanting and needing to get people back in to court rooms and this has included the setting up of 18 ‘nightingale’ courts around the country to reduce backlog, including at Salford’s Lowry Theatre, and the York Hilton Hotel.
It should be noted, and the justice system commended, that the pandemic has turbo charged further modernisation plans in the courts including the continued roll out of the cloud video platform for virtual hearings, expanding online divorce processes to solicitors, and from August requiring all solicitors to file financial consent orders through a virtual portal, meaning orders are received back in hours or days, not months. There has also been greater emphasis on better case management and allocation of files, and requirement of solicitors to work together to agree directions and avoid hearings. It is hoped that sense of co-working is not lost in the future.
How has non-court dispute resolution faired in comparison?
The utilisation and importance of DR for many practitioners and their clients has rapidly increased over the course of 2020. In some cases there has been little option not to, with pleas from some in the judiciary to still consider DR at all stages of court proceedings.
The Family Mediation Standard Board as early as 19 March provided practical guidance to mediators and relaxed aspects of its code of practice to ensure that those without access to a smart phone or computer could still access information they needed by telephone. As was common place before lockdown, mediators and collaborative practitioners have been able to quickly and easily set up video calls, and hold meetings with clients at times which reduce disruption on the working day. Some face to face meetings have also been taking place, with it sometimes being easier and safer to accommodate them in offices and external venues than in large court buildings.
For those families / cases where a firmer steer to negotiations and discussions is required, or an enforceable decision to be made, it is possible to mimic stages of court proceedings, and retain many of the benefits of DR such as cost savings, confidentiality, and speed. Two examples are:
- Virtual private financial dispute resolution (FDR) hearing, where a selected ‘judge’ (most likely an experienced solicitor or practising barrister with the right background and skills for the case) provides an indication of what order they would expect a final hearing judge to make and act as a useful catalyst for settlement.
- Arbitration, akin to private judging, is a process familiar to many in the business world and useful for those cases where compromise is out of reach and an outcome needs to be imposed.
Key actions and conclusions:
- Despite the pandemic, the key actions and conclusions from the last blog remain unchanged.
- The courts are backlogged, will be for some time, and should remain a last resort.
- DR options are likely to be far more beneficial for you and your business.
- Research the DR processes further and decide which approach will best support you, your family, and business. More can be found here: https://www.divorce.co.uk/
This article was written by Andrew Moore, Mills & Reeve LLP.