Family Law Arbitration Act Passes General Assembly.
The news out of Harrisburg is that both chambers of the General Assembly have passed what is termed House Bill 917, formally the Uniform Family Law Arbitration Act. This comes almost five years after the Revised Uniform Arbitration Act went into effect for non family cases. The family law version is, of course, targeted to family law cases.
Arbitration has been around since the Divorce Code was amended in 1980. It’s an alternative to the slow and sometimes unsteady judicial process found in your local courthouse. Rather than rely upon your state and county paid courts to decide your divorce, you can agree to hire a private arbitrator who will decide your case. That person is paid by the parties and with rare exceptions the determination is final and unappealable. The one thing an arbitrator can’t do is divorce you, but the typical arbitration has a companion “official” court case and number. The arbitration ruling is attached to a request for a court decree of divorce which only state commissioned judges can issue.
The new act also references that fact you are welcome to send your support and custody cases to arbitration as well. But, where you do bind yourself to an arbitrator’s decision on your property and income, you can’t do that when it comes to the best interests of your kids regarding custodial arrangements and their support. A court is free to overrule kid decisions which makes arbitration a little unwieldy when parties are seeking finality. While almost all litigants profess to like prompt dispositions and finality in litigation at the outset, those affections diminish fast when the decisions aren’t consistent with client expectations.
The new law clarifies a lot of matters related to arbitration. In practical terms one of the most common complaints related to pre-trial discovery. In ordinary cases if you need the records of a bank or a physician or the credit card company, you just issue a subpoena. The subpoena power in arbitration was very murky because the power to subpoena people and documents is a state authorized power and private individuals (e.g., arbitrators) don’t have it. The new act seeks to coordinate powers so that arbitrations can secure compliance with court-based discovery. The new act also clarifies when arbitrators have conflicts of interest and when arbitration rulings are subject to being vacated because the proceedings have been corrupted in some way.
The BIG issue in arbitration is finality for good or bad. If you read this blog earlier this month we saw a woman cited for harassing her neighbors by banging on pots with a spoon. Convicted at the local district judge she appealed first the Common Pleas Court and then the state Superior Court. The 2019 “incident” was not fully resolved until April 2024. It demonstrates how slow courts can be and how even trivial occurrences can produce endless litigation. Arbitration takes care of that issue because essentially, there are no appeals. But no appeal for the bad guys (your opponents) means no appeal for the good guys (you). The finality can be a little scary.
The other concerns we see has to do with matters of disclosure and a carve-out allowing judges to get involved in arbitrated matters on a temporary basis. Under Section 3505(d) of the Divorce Code, where a party fails to disclose assets in accordance with the general rules of the courts about disclosure, that asset, once uncovered, can be placed in a constructive trust that allows a court to distribute it. When you make a disclosure to a court or testify in a court, you do so under the penalties of perjury. But, if you don’t file disclosures under oath and don’t testify under oath, what remedy is there when you find out six months after the divorce is concluded that your ex “forgot” to disclose the cryptocurrency or the partial interest he had in the stadium license that got him his Phillies tix? Also, a mild bit concerning is the coordination between arbitrators and judges. The act attempts to say that if an arbitrator is not available to rule on something on a timely basis, the parties can ask the state court to intervene to provide that relief. That makes sense because courts are open every business day with regular hours and have authority to act at all times, day or night. But if your spouse wants an injunction and appointment of a receiver over your business while your friendly arbitrator is attending Wrestlemania 2025 in LasVegas, does the court have that kind of power? Can the arbitrator overrule it once he or she returns to town. Is the judicial order appealable to an appellate court? All not clear as I write this. Even the location of 2025 Wrestlemania remains “undecided.”
Here’s the bill as it will arrive on Governor Shapiro’s desk for him to wrestle with it.
