How to save tens of thousands on the cost of your divorce
Australia's Family Court is facing huge backlogs and a lack of funding, causing delays of up to three years for separating couples.
To deal with this growing problem, some are now turning to the concept of a private court room to fast-track their financial settlements.
According to the latest figures from the Australian Bureau of Statistics, Australia's divorce rate is increasing, with 48,517 divorces granted in 2015 - up 4.3% on 2014. The median age of divorcing males is 45 and the median age of females is 42.
Australian marriages last an average of 12 years. The largest proportion of divorce applications in 2015 was from joint applications, accounting for 43.3% of divorces. Females accounted for 31.6% of applications while males accounted for 25.1%.
With a rising divorce rate and increasing court delays, the outsourcing of financial settlements to private arbitrators will be the next big trend in family law.
Arbitration in divorce cases is far more common in the UK and, while growing, it is yet to fully take off in Australia.
The Family Law Act allows for the determination of financial disputes between separating couples by way of arbitration as an alternative to court litigation.
Family law arbitrators are qualified family law professionals who have undertaken specialist arbitration training. They may include retired judges and barristers.
Matters determined by an arbitrator relate specifically to financial disputes and do not include parenting matters or child maintenance.
The current delays in the court system are seeing waiting times upwards of three years for financial disputes to be resolved.
In that time business valuations change, property markets fluctuate and the financial cost of waiting three years with ongoing legal correspondence can be tremendously costly.
With arbitration, disputes have the ability to be resolved quickly, in some instances within a six-month timeframe, allowing both parties to move on with their lives and potentially save thousands of dollars.
The average cost of litigation can be anywhere between $50,000 and $100,000, and sometimes more.
On the other hand, the cost of a private arbitrator starts from $4000 to $8000 a day, depending on qualifications, and could potentially offer savings of up to 20%-30% at least compared with traditional litigation.
But it's not only the financial cost. The emotional burden of a protracted legal battle, time out from work and the pressure on family and relationships is something that you can't put a monetary figure on.
One of the greatest advantages of arbitration is that it allows for a more tailored approach to dispute resolution. If there is a specific issue you and your partner cannot agree on, such as an inheritance, and everything else is agreed, then you can go to arbitration to decide on the inheritance issue alone.
At the end of the day when it comes to divorce and separation, fighting over principles in court is one of the most expensive things you can do.
Remember to take advice early, be willing to compromise and be open to other avenues of dispute resolution, such as arbitration.
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