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The rich are used to choosing private healthcare and private education, but now private divorce is also an option.
Thanks to intense delays waiting for court dates and unwanted publicity once they are granted, couples in England are increasingly turning to private arbitration to help them sort out the details of their divorces, lawyers say – in some cases, with hundreds of millions of pounds at stake.
The process, which takes place in a private location and is simpler than in court, is usually presided over by a senior lawyer or retired judge. The result is binding.
“It’s happening more and more because the court system is completely overwhelmed,” said solicitor Rebecca Cockcroft, a partner at Fladgate.
There were 130 financial settlement arbitrations for divorces in the year to mid-December 2024, up from 89 in all of 2023, according to the Institute of Family Law Arbitrators. Barrister James Roberts KC, president of the Family Law Bar Association, predicts that this number, currently only around 1 per cent of contested divorces, will continue to rise thanks to a change in court rules in April 2024 which means parties must try to reach a settlement first outside court.
London has earned the reputation of being the “divorce capital” of the world. Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai, reached a £550m settlement with Princess Haya bint Al-Hussain at the High Court in 2021, while high-profile divorces such as those of Prince Charles and Diana, Princess of Wales, have been widely covered by media and gained considerable fame for their lawyers.
The advantages of private business are available to anyone who can pay, but are especially attractive to the rich: speed, privacy and the ability to choose an arbitrator.
Private client lawyers have long complained about the poor state of the court system. Although the number of days judges work in the High Court’s family division, where the highest-value divorce cases are heard, has barely changed since 2011, the time allocated to dealing with big-money disputes has shrunk, lawyers say.
“If you issue a financial request, then that’s a good four months. . . for your first meeting,” Cockcroft said, then “a few months” for the settlement negotiation hearing and “a few more” for the final hearing.
A judicial divorce can take up to two years, but in arbitration it can take as little as six months, says barrister Alexis Campbell KC, joint head of chambers at 29 Bedford Row.
Apart from the obvious emotional benefits of a quicker resolution, it can also work out cheaper: although you have to pay for an arbitrator as well as your own lawyers, Campbell estimates that a judicial divorce can “easily” cost £100,000-£2m. By speeding up the process, arbitration reduces the potential for legal letters, lengthy arguments, and expensive asset revaluations.
A greater push for judicial openness means that discussions of finances and relationships in family courts are now more accessible to the press and the public — the kind of attention that most wealthy families would prefer to avoid.
“Ninety-nine per cent of my clients would not want to think that anyone could walk in and hear what’s going on in my divorce,” said barrister Jane Keir, a partner at Kingsley Napley. “[Arbitration] it is absolutely private and no one can enter unless invited.”
Although the choice of arbitrator must be acceptable to both parties, less wealthy spouses may fear that their partner has chosen one that suits them better. Adoption of arbitration has been slower than some expected, according to Keir, perhaps in part because it lacks the perceived grandeur of the court system. It is also an unknown option.
Campbell, who acts as both judge and arbitrator, said there is much less pressure on the latter than on the former: the judge would only find out what their cases were the night before and therefore might have trouble keeping up to date, but as an arbitrator “they have my full attention . . . It’s an immeasurably improved system.”
The government encouraged forms of “out-of-court dispute resolution” such as arbitration to relieve pressure on the court system.
The UK Ministry of Justice said the government wanted to promote arbitration “to help people and businesses avoid the time, cost and stress of court battles”.
