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By Law Office of August J. Landi |March 16, 2022

If disputes can be resolved via mediation, they should be. Where mediation has not worked or will not work, arbitration is deserving of serious consideration. The legal community has yet to fully embrace arbitration. Lawyers inexperienced with Arbitration express concern that they will be blamed for recommending Arbitration if the outcome to their client is not favorable. (Reciprocally if fully litigated they are subject to criticism for the high cost of litigation; and complaints that: "The judge never listened to us, you should have recommended Arbitration.")

What does "arbitration" look like? First the word itself is off putting - its sounds like an "arbitrary" process. A thought experiment will put to rest this point of resistance:

(a) Partners agree that their relationship is no longer viable. They sit around the kitchen table and recognize they have issues involving the children, finances, when the family home should be sold and payment of debts. They rapidly reach an impasse.

(b) They each seek legal counsel. A conference is set up with the parties and counsel to resolve the issues. The meeting becomes oppositional and goes no where.

(c) Counsel recommends an attempt at mediation be made. That too is unsuccessful.

(d) The Court becomes triangulated into the dispute and orders "Mandatory Economic Mediation" with a trained court-approved mediator; and a "Custody Neutral Assessment" to determine whether this is a true custody dispute.

(e) If child issues remain unresolved, a referral is made to a forensic expert to make findings and recommendations as to what custody and parenting arrangement are in the children's best interests. This takes upwards of one year- with the issues unresolved and flaring up.

(f) If the case does not settle, trial follows. Trial can be spread over days or weeks; leading to the prospect of an Appeal if either party is sufficiently aggrieved by the result.

One-hundred and fifty years ago, Charles Dickens called court litigation "the grinder". It is extremely costly in time, expense and emotional wear and tear on the parties, counsel, the Court, and especially the children- who's voices often are not heard. Judges have the option of deciding custody cases without ever meeting the children. Some where along this process, preferably at the outset, either counsel for the parties, the Trial Judge assigned, or the parties themselves should say: " Wait a minute. There must be another way." And there is- a better way.

In Arbitration there is no requirement that agreement be reached on the issues, but simply on agreement to Arbitrate. Counsel and the parties discuss and agree upon a retired family court judge, or experienced matrimonial attorney to decide the unresolved issues in the case. A detailed "Referral to arbitration" is crafted and the arbitrator is engaged to resolve the pending issues. The New Jersey Supreme Court vetted August Landi's Referral to Arbitration finding the Referral he crafted to be "extremely thorough." Johnson v. Johnson, 204 N.J. 529 (2010)

Arbitration proceedings take place outside of the court house, thus avoiding the intimidating trappings of the Court. Counsel prepare pre-hearing statements outlining the issues and positions of their clients. Arbitration proceedings can be as relaxed and informal as the arbitrator directs. Rules of Evidence are relaxed. The Arbitrator can frame the issues, elicit information from the parties, and generally structure and streamline the proceedings.

Following arbitration, the arbitrator issues an "award", setting out findings of fact and conclusions of law. This Award is provided to the Trial Judge who then confirms, modifies, corrects or vacates the award. When confirmed the Arbitration Award is enforced by the Court to the same extent as though the Court had decided the issues after trial.

The key difference between court trial proceedings and arbitration proceedings should not be "lost in translation". The formal atmosphere of the Court room results in a degree of rigidity that slows down the process and amps up tensions and disputes. Arbitration proceedings are user friendly. Issues are addressed, generally without the posturing, oratory and objections taking place in a courtroom. What may take an hour of time at arbitration could take four hours of time in a court trial. Judges have limitations and constraints on what they can do to control the proceedings. They do not have the luxury of presiding over a trial from start to finish; and then spending a day mulling over a decision. The press of court business causes trials to be heard over multiple days- with interruptions for emergent applications or other scheduled events. And at the conclusion of the court trial, the trial judge is confronted by a blizzard of other scheduled events on the following day. At times it may take months for the court to carve out the time necessary to prepare a decision. Occasionally in some vicinages (counties) a moratorium will be placed on the scheduling of contested divorce litigation- as the court simply does not have the time. What adequate response can be provided by counsel to a client, who has paid for a contested divorce trial- canceled without a new date by the court? By contrast, arbitrators typically deal with only a handful of arbitrations at a time and are thus able to render Arbitration Awards promptly after the hearing concludes.

To recap: Arbitration is an appropriate dispute resolution process in instances where:

(a) One or more issues are intractable, resulting in the parties being entrenched in their positions; and unable to negotiate or mediate through the issue; requiring some one knowledgeable to make the decision for them.

(b)The parties are in an unequal bargaining position. There is a family business solely owned and operated by one of the marital partners: how much is it worth? What is the cash flow generated by the business? What are the excess earnings generated annually by the business? If each of the parties have retained business valuation experts who differ widely in their opinions, there may be no basis to resolve these issues without testimony from the accountants or business appraisers before a family court judge or an arbitrator. cf Brown v. Brown, 348 N.J. Super 467 (App.Div.2002); Stenken v Stenken, 367 N.J. Super 427 (App.Div.2004); Stern v. Stern, 66 N.J. 340 (1975); Lavene v Lavene, 162 N.J. Super. 198 (App. Div. 1978). Forensic accountants and business appraisers are called to testify and frequently come to widely divergent opinions as to business value.

(c) The parties wish to keep their business affairs and net worth private from public view. Court records and documents filed with the Court are open to public scrutiny, unless the court "seals" the records- something that occasionally happens for good cause shown. Documents filed with an Arbitrator are not open to public scrutiny.

Arbitration proceedings are informal versions of trials and hearings at the Court house. Testimony is taken in the presence of the parties and counsel. The parties may elect to record the proceedings or engage the services of a Court reporter to transcribe the proceedings. They will likely do so, or at least record the proceedings, where there are allegations of risk of harm to children. Rules of Evidence are relaxed. Documents are offered into Evidence. At the conclusion of the Arbitration proceedings, the Arbitrator prepares and renders an Arbitration Award.

The Arbitrator is empowered by the parties to resolve their dispute, in the "Referral to Arbitration". Proper crafting of the Referral to Arbitration is critically important; as this is the authorizing and enabling document empowering arbitration.

The Arbitrator's charge may be limited to one issue: as example, whether the Marital home should be sold now, or maintained for several years until one or more of the children graduate from High School? Parents may take opposite positions on this issue.

Testimony relevant to this limited issue may include: the ages and scholastic abilities of the children; special needs of the children; the cost of maintaining the marital home over several years or whether a smaller home is equally suitable; the savings if any to be achieved by selling and obtaining a less expensive residence; the anticipated charge in the value of the home over the next several years; the income and other assets of the parties; the simple arithmetic demonstrating whether there is a current ability to continuing carrying this expense- is the home affordable post-divorce; the fairness to the non-resident spouse of withholding their share of the Net equity for years; whether the value of the home should be fixed, and a Gemignani Mortgage filed to protect the non-resident owner's interest in the home. Gemignani v. Gemignani, 146 N.J. 278 (App.Div.1977). An alternative would be to maintain title to the property in both names, with each party's interest being subject to market forces at the time of sale or buyout.

Once a decision is rendered in the form of an Arbitration Award, the case then transfers back to the Trial Court to determine whether the Award will be subject to confirmation, modification or vacation by the Court.

There are two differing statutes in this State relevant to Arbitration proceedings and rules governing such proceedings, as well as a number of applicable cases and Court Rules. Any attorney referring a dispute to alternate dispute resolution should be conversant with the differences in the Statutes, and applicable case law. cf NJSA 2A:23B-1 et. seq. the standard "binding" Arbitration statute and N.J.S.A. 2A:23A-1 et. seq. the Alternative Procedures Dispute Resolution Statute which authorizes a trial review of the ADR Award in the event of a mistake of law.

Implementation: Acceptance of arbitration as a viable option began in 1984 when the New Jersey Supreme Court approved this form of ADR to resolve family disputes.Faherty v. Faherty, 97 NJ 99 (1984). In 1989 at a cost of $16,000 this law firm created a dedicated courtroom large enough to accommodate an Arbitration Panel of five persons, counsel tables for the parties and their attorneys, with additional seating for interested third parties. This facility was offered to members of the family bar and their clients at no cost to facilitate utilization of Arbitration by family lawyers.

Over thirty years have now past since the Faherty decision. Arbitration has found increasing acceptance by the family bar, often with clients leading the path forward as public awareness has increased. The acceptance process has sped up since the Supreme Court in Johnson adopted the position fostering Arbitration advanced by August Landi.

The Arbitration Process

(a) First Step- Recognizing the need to Arbitrate.

Arbitration is useful in a limited subset of cases- where all other attempts to resolve issues have either failed or it is recognized early on that trying other approaches will protract and further polarize the dispute, resulting by default in out of control, chronic and conflicted litigation. Rather than take a resigned position that "trial" is inevitable, parties and counsel should be proactive and give serious consideration to resolving the dispute through Arbitration. Arbitration now provides a streamlined efficient and effective approach to resolving family and custody disputes. Arbitration has the full backing and encouragement of the New Jersey Supreme Court. Early adopters in the profession are utilizing arbitration. However the culture of the legal community remains unduly wedded to showing up at the court house, hanging around and expecting judges to resolve the case. As you become more conversant with the arbitration process, your attorney may need some nudging to discuss this alternative.

(b) Second Step- Identifying the Issues to be Arbitrated.

[Example of a limited issue preventing settlement]: "Should the marital home be sold now or kept until a child completes High School." Often this is the turning issue in a case and the only disputed issue. If the marital home is kept, the shelter expenses and other monthly expenses are known to the parties and it becomes a question of arithmetic to determine how much money is required to maintain the status quo pending sale. If the marital home is sold, expenses going forward are often murky and disputed. The issue of sale now or later may turn on the cost of maintaining the home, the net equity to be achieved upon sale, the likelihood of the house being sold for a reasonable amount; whether the home can be maintained or is "under water"; the effect on the children of a relocating move at the time their parents are divorcing. Where the parties are locked up on a financial issue (such as sale or maintenance of the family home), they have the constitutional right to refer such issues to Arbitration for decision.

If financial issues are not in controversy but parents are disputing the issue of parenting time, residential custody of children, or a relocation move such limited issue also can be referred to an experienced psychologist or other credentialed mental health professional for decision. cf Johnson v. Johnson, 204 N.J. 529 (2010)

[Example of a case where everything is contested]: Can Arbitration be invoked where nothing is agreed and everything is disputed? YES. In complex multi-faceted disputes a combination of such experts can selected. As example, where there is a small business with cash flow and valuation at issue, as well as custody dispute, a psychologist may serve in the role of "judge" to determine where the children will live and what parenting time arrangements are appropriate. An Accountant can be engaged to serve as Judge and resolve business related equitable distribution issues. California is a community property state where marital assets are shared equally. New Jersey is an equitable distribution state where marital assets are to be shared fairly and equitably.

(c) Third Step- Choosing the Arbitrator(s).

An experienced divorce attorney, retired family court judge, forensic psychologist, or forensic accountant is engaged to serve as "Judge" and resolve all of the issues in dispute or certain identified issues referred to arbitration. Generally counsel for the parties will recommend a noted expert in the field of law, accounting, or psychology to serve as Arbitrator depending on the issues to be resolved. As example: If a case involved collapse of a bridge, a structural engineer would have the expertise necessary to resolve the issue, as opposed to a Superior Court Judge who would have to be brought up to speed on the issues involved. So too, in a custody case involving a parent with Borderline personality disorder and allegations of parental alienation, a psychologist having in depth training in this field, comes to the decisional process without the necessity of being educated in this area of family dynamics.

(d) Forth Step- The "Referral to Arbitration".

Counsel for the parties prepare a comprehensive "Referral to Arbitration" which defines the Arbitrator's authority and the issues to be determined. The parties may elect to invoke the provisions of the Alternate Procedures Dispute Resolution Act- referred to either as [APDRA] or the [NJ ADR Act], which provides for Court overview of mistakes of law alleged to have occurred within the Arbitration proceedings. In the alternative, the parties may elect "binding" (i.e essentially non-reviewable) Arbitration pursuant to NJSA 2A:23B-1 et seq.

The Referral to Arbitration document invests the Arbitrator with the authority to decide on the dispute; how the Arbitration proceedings are to take place; and the limits of the Arbitrator's power and authority. Both parties must formally consent in writing for the Arbitration to take place. Once on board, neither can opt out unless they both agree to do so.

(e) Fifth Step- The Arbitration Proceeding.

The Arbitrator and counsel agree upon a date certain for the Arbitration to begin. Generally arbitration proceedings take place at an attorney's office, rules of evidence are somewhat relaxed and the atmospherics are more relaxed than a formal court trial. At or before the hearing, the Arbitrator receives and reviews documents, takes testimony of the parties, and hears positions staked out by counsel for the parties. Arbitration proceedings may include a transcript and appear very much like a Court trial; or may take place very informally.

In Johnson, the New Jersey Supreme Court approved an Arbitration Award involving parenting issues where counsel for the parties only met with the Arbitrator at the initial meeting, and then left the Arbitrator, a noted forensic psychologist, to meet with the parties hear what they had to say, visit at each parent's home, meet the children and then render a report.

(f) Sixth Step- The Arbitration Award.

Following conclusion of Arbitration, the Arbitrator issues a written decision with "Findings or Fact and Conclusions of Law"- the "Arbitration Award". One or both counsel may move for "Reconsideration" of the Arbitration Award- claiming that the Arbitrator made factual errors or wrongly applied the law to the factual findings. Thereafter, the Arbitrator may opt to modify the Arbitration Award, or simply conclude in writing that a modification is not warranted.

(g) Seventh Step- Court Review of the Arbitration Award.

The Arbitration Award is then subject to being "confirmed, vacated or modified" by the Trial Court. Where the parties have proceeded under the terms of the APDRA, the family Court judge assigned reviews the ADR Award to assure the Arbitrator followed the laws of the State of New Jersey in rendering the Arbitration Award. Where there has been a failure to do so, the Trial Court has the remedy of vacating or modifying the award; or remanding the dispute back to the Arbitrator for further proceedings, or clarification of the Award. When the Trial Court's confirm an Arbitration Award it becomes "an Order of the Court"; enforceable to the same extent as though the Court had rendered the decision after a contested trial.

(h) Eighth Step- The Trial Court Enforces the Award.

If a party fails to comply with the Arbitration Award following confirmation by the Trial Court, the court in subsequent proceedings has full authority to enforce the previously "confirmed" Arbitration Award to the same extent as any court order following trial.


The dispute resolution selected and choice of attorneys, should not be blindly entered into or determined without consideration. Often when marriages are no longer viable, people seeking legal counsel abdicate the responsibility they owe to themselves to craft a dispute resolution process that works for them. They see no alternative other than to throw up their hands in the belief that only a trial will resolve the dispute. They seek the most expensive legal representation, assuming the more they pay the better the representation; and off-load decisional responsibility for the conduct and resolution of their case onto their attorney's lap. Paying a retainer and then leaving life changing decisions to professionals generally is not the best way to proceed. Your future life is involved. You should participate in making informed decisions. Funding protracted litigation guarantees legal warfare. Divorce litigation is not family friendly and should generally be avoided. Judges of the Family Court say as much everyday to litigants going through the process on Court event days when efforts are made by Court to end the disputes on Early Settlement Panel [ESP] days at the courthouse.

The attorney- client relationship works best when there is a collaborative process with the client understanding the route being taken to resolve their case. The more you know about your case, the more in control you will likely feel; and the greater your understanding of how your case ended; and the resulting consequences to you.

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