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The rich are used to opting for private health care and private education, but now even private divorce is an option.
Thanks to intense delays waiting for court appointments and unwanted publicity once they get them, couples in England are turning to private arbitration in greater numbers to help them sort out the details of their divorces, lawyers say – in some cases, with hundreds of millions of pounds at stake.
The process, which takes place in a private location and is simpler than in a court, is usually presided over by a senior lawyer or retired judge. The result is binding.
“It’s coming up more and more because the court system is completely overwhelmed,” said solicitor Rebecca Cockcroft, partner at Fladgate.
According to the Institute of Family Law Arbitrators, there were 130 financial settlement arbitrations for divorces in the year to mid-December 2024 compared with 89 in the whole of 2023. Barrister James Roberts KC, chairman of the Family Law Bar Association, predicts that that number, currently only about 1 percent of contested divorces, will continue to rise thanks to a change in court rules in April 2024 which means that the parties must try to reach a settlement first out of court.
London has earned a reputation as the “divorce capital” of the world. Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai, reached a £550 million settlement with Princess Haya bint Al-Hussain at the High Court in 2021, while high-profile divorces such as Prince Charles and Diana, Princess of Wales, were widely covered. by the media and gained considerable notoriety for their lawyers.
The advantages of going private are available to anyone who can pay, but are particularly attractive to the wealthy: speed, privacy and choice of referee.
Private client lawyers have long complained about the poor state of the court system. Although the number of days judges sit in the High Court’s family division, which hears the highest-value divorce cases, has barely changed since 2011, the time allocated to resolving big-money disputes has fallen, say the lawyers.
“If you issue a financial application, then it’s a good four months. . . for your first meeting,” Cockcroft said, then “a couple of months” for a session to negotiate the settlement and “a few more” for the final session.
A divorce through the courts can take up to two years, but in arbitration it can be as little as six months, says barrister Alexis Campbell KC, joint head of chambers at 29 Bedford Row.
As well as the obvious emotional advantages of a quicker settlement, it can also work out cheaper: although you have to pay for the arbitrator as well as your own lawyers, Campbell estimates that a litigated divorce can “easily” cost £100,000-£2 min. By speeding up the process, arbitration reduces the opportunities for legal papers, extended arguments and costly revaluations of assets.
A greater push towards judicial openness means that arguments about finances and relationships in family courts are now more accessible to the press and the public – the kind of attention most wealthy families would prefer to avoid.
“Ninety-nine percent of my clients would not want to think that someone could come in and hear what’s going on in my divorce,” said attorney Jane Keir, partner at Kingsley Napley. “(Arbitration) is absolutely private and no one can enter unless invited.”
Although the choice of arbitrator should be agreeable to both parties, less affluent spouses may fear that their partner has chosen one more favorable to them. The uptake of arbitration has been slower than anticipated, according to Keir, perhaps in part because it lacks the perceived grandeur of the court system. It is also an unknown option.
Campbell, who acts as both judge and referee, said there was far less pressure on the latter than on the former: a judge would only learn the night before what their cases were and so could struggle to be fully expedited. , but as a referee “they have my full attention . . . It’s a vastly improved system.”
The government has encouraged forms of “non-judicial dispute resolution” such as arbitration to ease pressure on the court system.
The UK Ministry of Justice said the government wanted to promote arbitration “to help people and businesses avoid the time, cost and stress of court battles”.
