ARBITRATION Ad Hoc COMMITTEE REPORT
By Charles F. Vuotto, Jr., Esq.
Formation Of The Ad Hoc Committee
The new and amended rules as well as related forms that are now part of the Appendix to the Rules of Court found their origin in the pronouncements of Justice Virginia Long about six years ago in Fawzy v. Fawzy, 199 N.J. 456, 482 (2009), and the next year in Johnson v. Johnson, 204 N.J. 529 (2010). As a result of Justice Long’s direction, the Supreme Court created the Ad Hoc Committee on the Arbitration of Family Matters (“Ad Hoc Committee”). The Ad Hoc Committee was established to formulate rules, forms and procedures to address arbitration in family law matters. It worked diligently to carry out its task from the time it was created in or about December of 2013 to the date that the Ad Hoc Committee issued its report on February 9, 2015.[i]
As indicated in the Ad Hoc Committee’s report, Fawzy charged the Supreme Court Family Practice Committee with developing forms and procedures for the arbitration of family law matters pursuant to the Uniform Arbitration Act (“UAA”) (to wit: N.J.S.A. 2A:23B-1 to 32) and the Alternative Procedure for Dispute Resolution Act (“APDRA”) (to wit: N.J.S.A. 2A:23A-1 to 9). In the course of complying with their charge, the Ad Hoc committee drafted amendments to existing rules, new rules, a questionnaire for litigants to answer and sign, a disclosure form for the arbitrator/umpire to sign and two form agreements (one under the UAA and one under the APDRA) to “formalize the procedures and to address the concerns that were previously raised through the public comments.”
THE RULES
4:21A-1 was amended to add sub-paragraph (f), which provides that “arbitration in Family Part Matters shall be governed by R. 5:1-5.”
5:1-4 (Differentiated Case Management) was amended to add an “Arbitration Track.” The major aspects of the amended part of the Rule provide that:
The parties may agree to execute a Consent Order or Agreement to arbitrate or resolve the issues pending before the court pursuant to the UAA, APDRA or any other agreed upon framework for arbitration of disputes … except as provided by R.5:1-5(a)(1)[ii].
If the parties elect to arbitrate, the litigation shall be assigned to the Arbitration Track, and the arbitration shall proceed pursuant to R. 5:1-5.
Issues not resolved in arbitration shall be addressed in a separate mediation process or by the court after the disposition of the arbitration.
The court has no discretion under R. 5:1-4(b) to assign a case to a different track that has been assigned to the Arbitration Track.
Further, if it is not clear from an examination of the information provided by the parties as to which track assignment is most appropriate, the court is presently empowered to assign the case to the track that “affords the greatest degree of management.” However, the court may not assign a case to the arbitration track under those circumstances.
Similarly, the authority granted by R. 5:1-4(c) to reassign a case to a track other than that specified in the original notice on the court’s motion or on an application by a party does not apply to assignments to the Arbitration Track.
5:1-4(c) provides that an action assigned to the Arbitration Track may be reassigned to the track assignment most appropriate if the parties mutually elect to opt out of the Arbitration Track by Consent Order or Agreement.
At no time may the court assign a matter to the Arbitration Track without the consent of both parties.
Lastly, the rules do not address what happens if the arbitration is not concluded within the one-year time frame. Perhaps that is covered by the last sentence of Rule 5:1-4(a)(5) (that had not been recommended by the Ad Hoc Committee) that states: “Issues not resolved in arbitration shall be addressed in a separate mediation process of by the court after disposition of the arbitration.”
New Rule: R. 5:1-5 (“Arbitration”) provides the bulk of the new provisions. The major aspects of this new Rule are:
5:1-5 and applies to all Agreements to Arbitrate (“Agreements”) and all Consent Orders to Arbitrate (“Consent Orders”) a family law matter, including but not limited to those entered into pursuant to the UAA, APDRA or any other agreed upon framework.
The following issues cannot be arbitrated:
the entry of the final judgment of annulment or dissolution of relationship;
action involving the Division of Child Protection and Permanency;
Domestic Violence Actions;
Juvenile Delinquency Action; Family Crisis Action; and
Adoption Actions.
5:1-5(b) lists specific prerequisites to arbitrating a family law dispute, as follows:
Prior to the execution of any agreement or entry of a Consent Order, each review and execute the Arbitration Questionnaire, which is now set forth in Appendix XXIX-A. Each party’s questionnaire shall be attached to the Agreement or Consent Order.
The Agreement or Consent Order to Arbitrate must state that:
The parties understand their entitlement to a judicial adjudication of their dispute and are willing to waive the right;
The parties are aware of the limited circumstances under which a challenge to the award may be advanced and agree to those limitations;
The parties have had sufficient time to consider the implications of their decision to arbitrate; and
The parties have entered into the Agreement or Consent Order freely and voluntarily, after due consideration of the consequences of doing so.
In addition to the foregoing, R. 5:1-5(b)(2)(B) provides that in all family proceedings involving child-custody and parenting-time issues, the Agreement or Consent Order shall provide that:
A record of all documentary evidence shall be kept;
All testimony shall be recorded verbatim; and
The award shall state, in writing, findings of fact and conclusions of law with a focus on the best-interest of the child standard.
R. 5:1-5(b)(2)(c) provides that in all family proceedings involving child support issues, the Agreement or Consent Order shall provide that the award shall state, in writing, findings of fact and conclusions of law with a focus on the best-interests standard, and consistent with R. 5:6A and Rules Appendix IX.
5:1-5(c) provides that
Any action pending at the time that an agreement or Consent Order to Arbitrate is reached shall be placed on the Arbitration Track referenced in R. 5:1-4 for no more than one year following Arbitration Track Assignment, which term may be extended by the Court for good cause.
Cases assigned to the Arbitration Track shall be given scheduling consideration when fixing court appearances in other matters.
New Rule R. 5:3-8 (Review and Enforcement of Arbitration Awards), addresses the review and enforcement of arbitration awards. The second new rule is R. 5:3-8 and provides for procedures to review and enforce Arbitration Awards consistent with the UAA and APDRA. The Ad Hoc Committee addressed the procedures to enforce final and interim awards by an arbitrator or umpire. Essentially, this rule relates back to the statutory framework, with some tweaking as to interim awards. The major aspects of this new Rule provide that:
5:3-8(a) addresses the procedure for the confirmation of final or interim economic awards (except for child support awards that are governed by subparagraph(c)).
5:3-8(a) provides that as to such economic awards (other than child support), either party may apply to the court by motion, the return date for which may be shortened by the court pursuant to R. 1:6-3 (a), or summarily pursuant to R. 5:4-1 if no other family action is pending, to confirm a final or interim arbitration award.
This Rule requires the court to confirm and enter a judgment in conformity with the final award of the arbitrator, or confirm or enter a pendente lite order in conformity with an interim award of the arbitrator, unless the court determines to correct, modify or vacate the final or interim arbitration award pursuant to the procedures and standards set forth in the UAA (paragraphs 23 or 24)(unless the parties have expanded the scope of review in accordance with paragraph 4(c)); the APDRA (paragraphs 13 or 14); or any other applicable statute or agreed upon framework under which the parties have agreed to arbitrate their dispute.
5:3-8(b) addresses the procedures for the confirmation of final or interim custody and parenting time awards. The same procedures as detailed under R. 5:3-8(a) are applicable with the added direction that the award should not be entered if the court finds that:
A record of all documentary evidence has not been kept; or
The award does not contain detailed written findings of fact and conclusions of law; or
The verbatim record of the proceeding was not made, in which case any interim or final award shall be subject to vacation and reviewed de novo by the court; or
There is evidential support establishing a prima facie case of harm to a child, in which event the court shall conduct a hearing and if, after that hearing, there is a finding of harm to a child, the parties’ choice of arbitration shall be invalidated, the court shall vacate the interim or final award and determine de novo the child’s best interest. If there is no finding of harm to a child, the court shall confirm and enter a judgment in conformity with the final award of the arbitrator or confirm and enter a pendente lite order in conformity with an interim award of the arbitrator, unless the court determines to correct, modify or vacate the final interim arbitration award pursuant to the procedures set forth under the UAA (unless the parties have expanded them); APDRA; any other applicable statute or any other agreed upon framework.
Under R. 5:3-8(c) the court is given direction regarding the procedures for confirmation of a final or interim child support Again, the same procedures are detailed as referenced above pursuant to R. 5:3-8(a) with direction to confirm the award unless the court finds that there is evidential support establishing a prima facie case of harm to a child with provisions similar to those detailed above with regard to R. 5:3-8(b) (i.e., confirmation of final or interim custody and parenting time awards).
THE FORMS
As previously stated, the Ad Hoc Committee has created various forms to assist litigants and attorneys in resolving family law matters through arbitration or alternative dispute resolution. Inclusive thereof are forms for arbitrating under the UAA and APDRA. These forms are now part of the appendices to the Rules of Court.
Questionnaire Form (Appendix XXIX-A)
The first form is a questionnaire that is to be reviewed and executed by each party prior to execution of an Agreement or Consent Order submitting a family law matter to arbitration/alternate dispute resolution. The questionnaire contains ten specific questions (with an additional four questions if child support, custody and/or parenting time is in issue), as to which each party must either check “yes” or “no.” Each party must certify by signing the questionnaire that he or she has read each and every question contained therein and that the responses are truthful. The purpose of the questionnaire is to verify to the court (in any subsequent proceeding) that the party has read the Agreement or Consent Order, understands its terms, understands that he or she has the right to a trial to resolve whatever issues are being submitted to arbitration/alternate dispute resolution, that he or she is waiving his rights to appeal and has limited ability to challenge the awards of an arbitrator/umpire, has had time to consider the implications of his/her decision to arbitrate, is doing so freely and voluntarily, is not under the influence of any substance, had all of his or her questions answered and agrees to be bound by the arbitration/ADR Agreement or Consent Order.
If child support, custody or parenting time are in issue, each party must also reflect their understanding that an award pertaining to said issues can be vacated if either party can establish that it threatens or poses a risk of harm to the child or children, that a party will not be able to challenge, vacate, modify or amend the award solely because he or she thinks the best interest of the child are better served by a different decision, and understand the requirements regarding maintaining documentary evidence and creating a record.
Agreement to Arbitrate Pursuant to the Uniform Arbitration Act (“UAA”), N.J.S.A. 2A:23B-1 et. seq. (Appendix XXIX-B). The Agreement includes:
“Explanatory Notes” as guides for attorneys and parties who are less familiar with the arbitration/alternative dispute resolution process.
Mandatory and optional sections that incorporate important language from the UAA and the APDRA.
Notice that the form agreements allow the parties to agree on standards of review, except those that cannot be waived by statute, and offer options for parties to consider including: reconsideration, expansion of the scope of judicial review under the UAA and an appeal to an Appellate arbitrator/umpire.
Provisions about enforcing pendente lite awards of the arbitrator/umpire. These option provisions dovetail with the new rule 5:3-8 about enforcing awards.
Notice of certain provisions that are required to assure the enforceability as follows:
Paragraph 1 (relating to a knowing waiver of rights, consent to arbitration, scope of arbitration and entry of a judgment on arbitration award);
Paragraph 2 (delineating the issues to be arbitrated); and
Paragraph 4 (stating that the judgment on the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof).
The explanatory note also advises litigants and their attorneys of provisions that are required in any arbitration involving children, including custody, parenting time or child support issues. These include:
Paragraph 1 (as stated above);
Paragraph 14 (required record keeping);
Paragraph 16 (relating to documentary evidence to be held by the Arbitrator until the issuance of the award); and
Paragraph 17 (regarding the required findings and form of the award).
Lastly, the introductory note advises litigants and counsel of certain paragraphs that should be agreed upon to avoid later disputes (i.e., paragraphs 6, 7, 9, 11, 15, 18, 19, 20, 22 and 29), and refers to the remaining provisions of the form agreement as offered for consideration by the parties and their counsel in planning the arbitration proceeding.
Agreement to Resolve Disputes Pursuant to the New Jersey Alternative Procedure for Dispute Resolution Act (“APDRA”), N.J.S.A. 2A:23A-1, et seq. (Appendix XXIX-C)
The introductory note relative to the form agreement under the APDRA is almost identical to that related to the form agreement for the UAA. However, it bears review as certain paragraph references are different since it refers to a different form.
Arbitrator/Umpire Disclosure Form (Appendix XXIX-D)
In order to verify the independence of the arbitrator or umpire, the Rules of Court require that a disclosure form be reviewed and executed by the arbitrator/umpire prior to execution of an Agreement or Consent Order submitting a family law matter dispute to arbitration or ADR process.
Any past or present relationship with the parties, their counsel, or potential witnesses, direct or indirect, whether financial, professional or social, or of any other kind must be disclosed. Any doubt should be resolved in favor of disclosure.
The form contains 13 separate questions, which must be answered either “yes” or “no” by the arbitrator/umpire. Should the answer to any question be “yes” or if the arbitrator/umpire is aware of any other information that may lead to a justifiable doubt as to his or her impartiality or independence or create an appearance of partiality, then the arbitrator/umpire is required to describe the nature of a potential conflict(s) on an attached page.
The arbitrator/umpire must then sign the disclosure form indicating that he or she understands that the duty to disclose is a continuing duty, which requires him or her to disclose at any stage of the arbitration, any such interests, or relationship that may arise, which are recalled or discovered.
The form further states that his or her failure to do so may be grounds to vacate the award.
CONCLUSION
It is critical for any attorney representing a litigant contemplating entering into an Agreement or Consent Order to arbitrate under the UAA, APDRA or any other agreed upon framework for arbitration or ADR to review the amendments to R. 5:1-4 and the new Rules of Court, to wit: R. 5:1-5 and R. 5:3-8.
Further, it is important to recognize that the form agreements attached as Appendix XXIX-B and XXIX-C are provided to help develop an Arbitration Agreement or Consent Order. These forms, other than mandatory provisions as stated in the Introductory Note to each form must be tailored to the particular facts and circumstances of each case.
[i] Its report can be found on the New Jersey Judiciary website at http://www.judiciary.state.nj.us/reports2015/adhoc_family.pdf. The report was then released for public comment. It was supported by the New Jersey State Bar Association. Ultimately, it was adopted in its entirety in the new rules effective September 1, 2015.
[ii] R. 5:1-5(a) prohibits resolution of the following issues by way of Arbitration or Alternate Dispute Resolution: (A) the entry of the final judgment of annulment or dissolution of relationship; (B) action involving the Division of Child Protection and Permanency; (C) Domestic Violence Actions; (D) Juvenile Delinquency Action; (E) Family Crisis Action; and (F) Adoption Actions.
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