If you are going through a separation or divorce, many of the related issues can be resolved through the use of a Separation Agreement. The Agreement can settle various rights and obligations by addressing issues such as custody and access, child and spousal support, as well as equalization and property division.
Most people dedicate a lot of their attention to these issues when negotiating and drafting the agreement. However, what most people fail to pay close attention to are alternative dispute resolution clauses that can be incorporated into the Separation Agreement, for example, an arbitration clause.
An Arbitration clause is commonly used in Separation Agreements which requires the parties to resolve their disputes through an arbitration process.
Arbitration is a type of Alternative Dispute Resolution that can be used by parties who have decided to separate and/or divorce. In Arbitration, trained arbitrators are authorized by the law with the ability to make binding decisions on issues dealing with custody and access, division of property and spousal and child support. Arbitration closely resembles an actual trial but provides parties with a quicker and sometimes more informal process.
You may think to yourself, great… we have an Arbitration clause but what you need to give serious thought to… is what these types of clauses actually mean, and the future responsibilities you will have as a result.
If there is an arbitration clause in your separation agreement you are basically saying NO to resolving the issue in Court. You must make sure that this is what you want! If you say you are going to arbitrate — that is what both parties agreed to.
Now there are two possible situations in which an arbitration clause can be used in a separation agreement.
In the first instance a specific Arbitrator can be named. In this case the parties have agreed to use a certain specific individual to help resolve the issue. If the Arbitrator says they are not willing to help or they cannot help with the particular issue – then the parties may go to court and the Arbitration clause will have no further force and effect.
In the second instance the Separation Agreement may not name a specific Arbitrator and simply state that the parties will agree upon a mutually acceptable arbitrator if need be. Here the parties are agreeing to Arbitrate and not go to court. When the issue for arbitration arises the parties will need to select an Arbitrator in this situation.
You see… these clauses are extremely important therefore you must give serious thought to what is in your Separation Agreement and the effect it will have if any future disputes may arise.
In May of this year, the Ontario Court of Appeal strengthened this idea by confirming the authority and importance of arbitration clauses in a valid separation agreement. In the case Grosman v. Cookson, the parties had signed a separation agreement which provided that in the case either party wanted to vary, or change, the amount of spousal support this change would be dealt with through arbitration.
The court ruled that it will not change spousal support in situations where the agreement explicitly provides a clause for doing so through arbitration. The judge stated that a Court does NOT have the jurisdiction to vary the amount in a valid separation agreement contrary to an exclusive arbitration provision.
Through this holding the Court reinforced the importance of arbitration clauses in Family Law by not allowing parties to simply run to the Court, try and find loopholes, and ultimately escape a valid agreement between both parties.
At Feldstein Family Law Group our lawyers are qualified to handle all of your family law needs, including drafting comprehensive separation agreements pertaining to all elements of a separation while explaining to you each clause and what it means in its entirety. I also act as a Mediator and an Arbitrator.
Contact Feldstein Family Law Group to consult with a lawyer today.
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