WHY PENNSYLVANIA NEEDS TO ADOPT THE UNIFORM FAMILY LAW ARBITRATION ACT (“UFLAA”)

by Carolyn Moran Zack and Robb D. Bunde

            On Friday, November 20, 2020, the Pennsylvania Bar Association House of Delegates voted to approve the PBA Family Law Section’s Resolution to support a modified version of the Uniform Family Law Arbitration Act (“UFLAA”). State Representative Kate Klunk will be the prime sponsor of the bill and it is anticipated that bill will be introduced in this year’s legislative session.  This article will provide an overview of the proposed UFLAA and summarize the benefits that will flow from adoption of this legislation for family law litigants, their advocates, and the family court system in general.

1. History of the UFLAA. Family law arbitration has been around for many years but efforts to provide procedural and statutory guidance are relatively new. The Uniform Law Commission appointed a Family Law Arbitration Study Committee in 2012 and, after considering the feasibility and desirability of a uniform or model act on family law arbitration for several months, the Study Committee unanimously recommended that a drafting committee be appointed to develop an act on family law arbitration.[1] The proposed model act was intended to contain the features of arbitration law that are essential for family law arbitration but are not typically addressed in commercial arbitration statutes.[2] The drafters concluded that a free-standing act would repeat much existing arbitration law and, therefore, the model Uniform Family Law Arbitration Act (“UFLAA”) incorporates by reference a state’s existing arbitration law (e.g., the UAA or the RUAA) for many steps in the arbitration process.[3] The ULC noted that while the use of arbitration is “on the rise” in the United States, state law has generally not kept up with this trend, and the UFLAA was drafted with the intent to promote the fairness and efficiency of the process and to protect the interests of vulnerable family members.[4] The UFLAA was approved by the American Bar Association in 2017 and, to date, has been enacted in three states: Arizona, Hawaii and North Dakota.[5]
2. Development of Pennsylvania’s UFLAA. This draft legislation is based on the recommendations of the Family Law Section’s UFLAA Task Force, which the authors co-founded in spring 2020. The Task Force consists of 17 members, including several members of the PBA ADR Committee. The Task Force has worked closely with Frederick Cabell Jr., the PBA’s Legislative Director, Ashley P. Murphy, the PBA’s Legislative Counsel, and Vince Deliberato, Director of the Pennsylvania Legislative Reference Bureau, in drafting the proposed legislation. The Task Force has obtained support for the proposed legislation from various stakeholders including the PBA Board of Governors and House of Delegates, the PBA Family Law Section, the Pennsylvania Chapter of the American Academy of Matrimonial Lawyers, the PBA Children’s Rights Committee and the PBA ADR Committee.
3. Why Now? The UFLAA is timely for several reasons. COVID-19 related shutdowns have caused the courts to have severe backlogs, especially in counties with a high number of pro se litigants. There is a demonstrated need for alternatives to court adjudication, and binding arbitration is an attractive ADR option for many reasons. In addition, Pennsylvania’s arbitration statute was amended July 1, 2019 to prohibit common law arbitration going forward. As of that date, arbitrations can only be conducted under the Revised Uniform Arbitration Act (RUAA) which is a commercial arbitration statute not tailored to family law issues. In the absence of a family law specific arbitration statute, there are many open questions about how these unique family law issues will be handled. Another compelling reason is that, without family law arbitration legislation in place, the concept is not well known in all parts of the state and is therefore underutilized. We hope that the adoption of the UFLAA will educate the bench, bar and public about the benefits of arbitration, promote its more widespread use, and instill confidence in the fairness and efficiency of the process. The use of binding arbitration under the UFLAA is completely voluntary. The court may not impose this process on the parties, but rather it is a process they choose freely by entering a written agreement to arbitrate.
4. What Does the UFLAA Provide? The UFLAA permits arbitration of issues that would arise under the Pennsylvania’s domestic relations statute, such as equitable distribution of property and debt, spousal support, alimony pendente lite and alimony, counsel fees, and interpretation of marital agreements.[6] The UFLAA excludes from arbitration status determinations such as the termination of parental rights, the approval of an adoption or guardianship, the entry of a divorce or annulment decree, and the dependency or delinquency of a child.[7] The UFLAA supplements the law of arbitration as provided in Pennsylvania’s RUAA, and in the event of a conflict between the two, the UFLAA controls.[8] In determining the merits of a dispute, the arbitrator shall apply the law of the Commonwealth, including its choice of law rules.[9] All arbitration awards must be confirmed by the court before they are enforceable as a judgment.[10] Such arbitration awards are modifiable as provided by law; if a party requests such modification, the parties may proceed under the dispute resolution process designated in the award or judgment or, in the absence of such a provision, agree to arbitrate the modification before the same or a different arbitrator or proceed in court as provided by statute and procedural rules.[11]
5. Arbitration Awards Are Generally Binding. Except for child-related awards (which are subject to judicial review as explained in more detail below), arbitration awards of family law claims are generally binding on the parties. There is no right of substantive appeal to the trial court or appellate courts. The UFLAA does ensure, however, that the process by which the arbitrator issued the award comports with principles of fairness and due process.

Prior to confirmation of an award, the arbitrator may correct the award on motion of a party made not later than 20 days after issuance of the award if it has an evident mathematical miscalculation or an evident mistake in the description of a person, thing or property, or to clarify the award.[12]

The court may also correct an unconfirmed award on motion of a party within 30 days of issuance of an award, if the award has an evident mathematical miscalculation or an evident mistake in the description of a person, thing or property, or the arbitrator made an award on a family law dispute not submitted to the arbitrator, and the award may be corrected without affecting the merits of the issues submitted.[13] Alternatively, the court shall vacate an award if the moving party establishes that (1) the award was procured by corruption, fraud or other undue means; (2)  there was: (i) evident partiality by the arbitrator; (ii)  corruption by the arbitrator; or (iii)  misconduct by the arbitrator substantially prejudicing the rights of a party; (3) the arbitrator refused to postpone a hearing on showing of sufficient cause for postponement, refused to consider evidence material to the controversy or otherwise conducted the hearing contrary to the designated powers and duties of arbitrator, so as to prejudice substantially the rights of a party; (4)  the arbitrator exceeded the arbitrator’s powers; (5)  no arbitration agreement exists, unless the moving party participated in the arbitration without making a motion for judicial relief before the beginning of the first arbitration hearing; or (6)  the arbitration was conducted without proper notice so as to prejudice substantially the rights of a party.[14]

A motion to amend or vacate the award must be made within thirty days of issuance of the award, except on the grounds of corruption, fraud or other undue means, in which case the motion must be filed within thirty days that the ground is known or, by the exercise of reasonable care, should be known to the party filing the motion.[15] Other than where vacation is for want of an enforceable arbitration agreement, the court may order a rehearing before an arbitrator; the rehearing shall be before another arbitrator if the award is vacated on account of the arbitrator’s corruption, fraud, or other misconduct.[16]

1. Child Support and Child Custody Awards Are Subject to Judicial Review. In Pennsylvania, arbitration of custody disputes is permitted, but is subject to close scrutiny by the court.[17] Because the court will not be bound by such an award, it may be set aside.[18]  Parties may also arbitrate child support, but may not agree to less child support than is required for the best interests of the child.[19]  The UFLAA permits the arbitration of child custody and child support issues subject to judicial review, consistent with state law. In addition, the UFLAA includes special provisions in such child-related arbitrations to ensure that the children’s best interests are being served.

For example, if the parties agree to arbitrate a future child-related dispute, the agreement is not enforceable unless they affirm the agreement in a record after the dispute arises, or the agreement was entered in a family court proceeding, and incorporated in or approved by the court in an order issued in that proceeding.[20] The arbitrator must make written findings supporting an award on a child-related issue.[21] The arbitrator must state the reasons on which a child-related arbitration award is based as required by the domestic relations statute.[22] The UFLAA preserves the parens patriae power of the court by requiring that, before it confirms a child-related award, the court must ensure that the arbitrator stated the reasons for the award, and that the award complies with the substantive domestic relations law and is in the best interests of the child.[23]

In addition, the UFLAA gives the court the ability to vacate the child-related award on motion of a party who establishes that the award does not comply with the substantive domestic relations law or is contrary to the best interests of the child, or that the arbitrator’s statement of reasons for the award are inadequate to enable the court to review the award, in addition to the other traditional bases (as set forth above) for vacating the award.[24] The court may determine a motion to vacate or amend a child-related award based on the record of the arbitration hearing if it was recorded and any facts occurring after the hearing, or, if the hearing was not recorded, de novo.[25] The UFLAA gives the court the authority to amend the child-related arbitration award, if amending rather than vacating it is in the best interests of the child.[26]

1. Protection of Party or Child. The UFLAA also includes provisions to protect vulnerable family members. For example, if the parties are not both represented, and a party is subject to a protection order or the arbitrator determines that there is a reasonable basis to believe that a party’s safety or ability to participate effectively in arbitration is at risk, the arbitrator shall stay the arbitration and refer the parties to court.[27] The arbitration may not proceed unless the party at risk affirms the arbitration agreement in a record and the court determines: (i) the affirmation is informed and voluntary; (ii)  arbitration is not inconsistent with the protection order; and (iii)  reasonable procedures are in place to protect the party from risk of harm, harassment or intimidation.[28]

            In addition, if all parties are not represented and the arbitrator determines that there is a reasonable basis to believe a child who is the subject of a child custody dispute is abused or neglected, the arbitrator shall terminate the arbitration of the child custody dispute and report the abuse or neglect to the court or to another appropriate authority.[29] The arbitrator is authorized to make a temporary award to protect a party or child from harm, harassment or intimidation.[30] On motion of a party, the court may stay arbitration and review a determination or temporary award under this section.[31] These provisions supplement remedies available under law for protection of victims of domestic violence, family violence, stalking, harassment or similar abuse.[32]

1. Arbitration Starts with A Valid Written Contract. An arbitration agreement must be: in a record signed by the parties; identify the arbitrator, an arbitration organization or a method of selecting an arbitrator; and identify the family law dispute the parties intend to arbitrate.[33] Such an agreement is valid and enforceable as any other contract and irrevocable, except on a ground that exists at law or in equity for the revocation of a contract.[34] If a party objects to arbitration on the ground that the arbitration agreement is unenforceable or that the agreement does not include a family law dispute, the court shall decide whether the agreement is enforceable or includes the family law dispute.[35] On motion of a party, the court may compel arbitration if the parties have entered into a valid arbitration agreement unless the court determines that the arbitration should not proceed due to protection of a party or child.[36]

Even where a valid arbitration agreement exists, the court may intervene in three important ways: termination, consolidation and temporary orders. On motion of a party, the court shall terminate arbitration if it determines that: (1) the agreement to arbitrate is unenforceable; (2) the family law dispute is not subject to arbitration; or (3) the arbitration should not proceed due to protection of a party or child.[37] Unless prohibited by an arbitration agreement, on motion of a party, the court may order consolidation of separate arbitrations involving the same parties and a common issue of law or fact if consolidation is necessary for the fair and expeditious resolution of the family law dispute.[38] Before an arbitrator is selected and able to act, on motion of a party, the court may enter a temporary order pursuant to applicable law; and after an arbitrator is selected, if the matter is urgent and the arbitrator is not able to act in a timely manner or provide an adequate remedy, on motion of a party, the court may enter a temporary order.[39]

1. Process of Arbitration and Powers of Arbitrator. A party may: (1) be represented in an arbitration by counsel; (2) be accompanied by an individual who will not be called as a witness or act as an advocate; and (3) participate in the arbitration to the full extent permitted by the UFLAA.[40] A party or representative of a party may not communicate ex parte with the arbitrator except to the extent allowed in a family law proceeding for communication with a judge.[41] An arbitrator shall conduct an arbitration in a manner the arbitrator considers appropriate for a fair and expeditious disposition of the family law dispute.[42] An arbitrator shall provide each party a right to be heard, to present evidence material to the family law dispute and to cross-examine witnesses.[43]

Unless the parties otherwise agree in a record, an arbitrator may: (1) select the rules for conducting the arbitration; (2) hold a conference with the parties before a hearing; (3) determine the date, time and place of a hearing; (4) require a party to provide: (i) a copy of a relevant court order, (ii)  information required to be disclosed in a family law proceeding under 23 Pa.C.S. (relating to domestic relations) and the applicable Pennsylvania Rules of Civil Procedure, and (iii) a proposed award which addresses each issue in arbitration; (5) interview a child who is the subject of a child custody dispute; (6) appoint a private expert at the expense of the parties; (7) administer an oath or affirmation and issue a subpoena for the attendance of a witness or the production of documents and other evidence at a hearing; (8) permit and compel discovery concerning the family law dispute and determine the date, time and place of discovery; (9)  determine the admissibility and weight of evidence; (10) permit deposition of a witness for use as evidence at a hearing; (11) for good cause, prohibit a party from disclosing information; (12) appoint an attorney, guardian ad litem or other representative for a child at the expense of the parties; (13) impose a procedure to protect a party or child from risk of harm, harassment or intimidation; (14) allocate arbitration fees, attorney fees, expert witness fees and other costs to the parties; and (15) impose a sanction on a party for bad faith or misconduct during the arbitration according to standards governing imposition of a sanction for litigant misconduct in a family law proceeding.[44]

In a child-related proceeding, unless the parties otherwise agree, the arbitrator is empowered to interview a child who is the subject of a child custody dispute; appoint an attorney, guardian ad litem or other representative for a child at the expense of the parties; and impose a procedure to protect a party or child from risk of harm, harassment or intimidation.[45]

An arbitration hearing need not be recorded unless required by the arbitrator, provided by the arbitration agreement or requested by a party.[46] An arbitrator shall issue a written arbitration award, dated and signed by the arbitrator, and shall give notice of the award to each party by a method agreed on by the parties or, if the parties have not agreed on a method, as provided in the UFLAA.[47] Except as the parties may otherwise agree (and for child-related awards which have specific requirements, as stated above), the arbitrator shall state the reasons on which an award is based.[48]

1. Confidentiality of Arbitration Proceedings. Unless the parties otherwise agree, the arbitration proceedings and the arbitration award are confidential.[49] Following issuance of an award, a party may move the court for an order confirming the award or, where applicable, entry of a decree incorporating the award.[50] If either party includes in this motion a request that the arbitration award be filed under seal, the court shall file the award under seal.[51] This provision furthers one of the key advantages of arbitration over litigation: the parties are able to fully resolve their claims out of the public eye.

1. Enforcement and Appeal of Arbitration Awards. Confirmed arbitration awards shall be enforced by a court in the manner and to the same extent as any other order or judgment of a court.[52] A court shall also give full faith and credit to a family law arbitration award confirmed by a court in another state.[53] Appeals may be taken from an order granting or denying a motion to compel arbitration; an order granting or denying a motion to stay arbitration; an order confirming or denying confirmation of an award; an order correcting an award; an order vacating an award without directing a rehearing; and a final judgment.[54] The UFLAA does not provide for expanded, substantive review of the arbitrator’s decision. The standard on appeal is therefore whether the arbitrator or the court erred in applying the UFLAA.
2. Qualifications, Disclosures by and Immunity of the Arbitrator. The parties’ selection of an arbitrator, arbitration organization or method of selection of an arbitrator controls.[55] If an arbitrator is unable or unwilling to act or if the agreed-on method of selecting an arbitrator fails, on motion of a party, the court shall select an arbitrator.[56] If the parties have not designated their arbitrator/method of selection of an arbitrator, unless they waive these requirements in a record, an arbitrator must be: (1) an attorney at law who is trained in domestic violence and child abuse; (2) a former attorney at law on inactive status who is trained in domestic violence and child abuse; or (3) a senior judge who is trained in domestic violence and child abuse.[57]

Before agreeing to serve, the potential arbitrator must make reasonable inquiry and thereafter disclose to all parties any known fact a reasonable person would believe is likely to affect: (1)  the impartiality of the arbitrator in the arbitration, including: (i) bias, (ii) a financial or personal interest in the outcome of the arbitration or (iii) an existing or past relationship with a party, attorney representing a party or witness; or (2) the arbitrator’s ability to make a timely award.[58] An arbitrator, the parties and the attorneys representing the parties have a continuing obligation to disclose to all parties any known fact a reasonable person would believe is likely to affect the impartiality of the arbitrator or the arbitrator’s ability to make a timely award.[59] A party may object to the selection or continued service of an arbitrator and a request a stay of arbitration and disqualification of the arbitrator by filing a motion for judicial relief.[60] If a required disclosure is not made, the court may: on motion of a party not later than 15 days after the failure to disclose is known or, by the exercise of reasonable care, should be known by the party, suspend the arbitration; on timely motion of a party, vacate an unconfirmed award; or if an award has been confirmed, grant other appropriate relief under applicable law.[61] If the parties agree to discharge an arbitrator or the arbitrator is disqualified, the parties by agreement may select a new arbitrator or request the court to select another arbitrator.[62]

An arbitrator or arbitration organization acting in that capacity in a family law dispute is immune from civil liability to the same extent as a judge of a court of this Commonwealth acting in a judicial capacity.[63] The immunity provided by this section supplements immunity under applicable law.[64] An arbitrator’s failure to make a required disclosure does not cause the arbitrator to lose immunity under this section.[65] Generally, an arbitrator is not competent to testify, and may not be required to produce records, in a judicial, administrative or similar proceeding about a statement, conduct, decision or ruling occurring during an arbitration, to the same extent as a judge of a court acting in a judicial capacity.[66] If a person commences a civil action against an arbitrator arising from their  services or seeks to compel the arbitrator to testify or produce records in violation of the UFLAA, and the court determines that the arbitrator is immune from civil liability or is not competent to testify or required to produce the records, the court shall award the arbitrator reasonable attorney fees and costs.[67] An arbitrator may be required to testify or produce records where it is necessary (1) to determine a claim by the arbitrator or arbitration organization against a party to the arbitration, or (2) to a hearing on a motion to vacate an award for corruption, fraud or other undue means; evident partiality by the arbitrator; corruption by the arbitrator; or misconduct by the arbitrator substantially prejudicing the rights of a party, if there is prima facie evidence that a ground for vacating the award exists.[68]

Conclusion

The use of binding arbitration under the UFLAA is completely voluntary. The court may not impose this process on the parties, but rather it is a process they choose freely by entering a written agreement to arbitrate. The UFLAA will aid all participants in the family law arbitration process by providing helpful guidance, including a requirement that the substantive family law be applied to determine the disputes, and that the awards (including alimony, spousal support, alimony pendente lite, child support and child custody) are modifiable as provided under applicable law. The UFLAA makes clear that child-related awards are arbitrable, subject to judicial review. It protects the integrity of the proceedings by requiring due process and disclosures by the arbitrator, parties and attorneys, and by delineating the authority of the court and the arbitrator, and the rights of the participants, from the inception of the arbitration agreement through entry of the award in a judgment. The UFLAA ensures the confidentiality of the proceedings, which is a key advantage of arbitration for family law litigants. The UFLAA protects a party where there is a reasonable basis to believe that a party’s safety or ability to participate effectively in arbitration is at risk, and a child who is the subject of the proceedings who is suspected of being abused or neglected. It discourages delay by imposing short deadlines for requests to correct or overturn the award. Finally, the UFLAA is uniquely tailored to the needs of family law cases and, thus, provides helpful guidance to the litigants, their advocates, and the court regarding the arbitration of family law issues, thus promoting confidence in the fairness and integrity of the process, as well as enhanced consistency and predictability in the outcomes of family law arbitration awards.

[1] Uniform Family Law Arbitration Act, July 8-14, 2016, Prefatory Note at 2.

[2] Id.

[3] Id.

[4] Id at 4.

[5] Uniform Law Commission, A Few Facts About the Uniform Family Law Arbitration Act (2016), (Dec. 2, 2020, 12:00 PM) https://www.uniformlaws.org/HigherLogic/System/DownloadDocumentFile.ashx?DocumentFileKey=74b20a78-c77a-8ebb-be2c-c96b8b30f9e7&forceDialog=0.

[6] UFLAA, §7373(a).

[7] UFLAA §7373(b).

[8] UFLAA §7374(a).

[9] UFLAA §7374(b).

[10] UFLAA §7385(d).

[11] UFLAA §7392(1), (2).

[12] UFLAA §7387.

[13] UFLAA §7388.

[14] UFLAA §7389(a).

[15] UFLAA §7389(e).

[16] UFLAA §7389(f).

[17] Miller v. Miller, 620 A.2d 1161 (Pa. Super. Ct. 1993).

[18] Id.

[19] Knorr v. Knorr, 527 588 A.2d 503 (Pa. 1991).

[20] UFLAA §7375(c)(1), (2).

[21] UFLAA §7384(b).

[22] UFLAA §7385(c).

[23] UFLAA §7386(c)(1), (2).

[24] UFLAA §7389(b)(1)-(3).

[25] UFLAA §7389(d)

[26] UFLAA §7389(c).

[27] UFLAA §7382(b)(1), (2).

[28] UFLAA §7382(b)(2).

[29] UFLAA §7382(c).

[30] UFLAA §7382(d).

[31] UFLAA §7382(e).

[32] UFLAA §7382(f).

[33] UFLAA §7375(a).

[34] UFLAA §7375(b).

[35] UFLAA §7375(d).

[36] UFLAA §7377(b).

[37] UFLAA §7377(c).

[38] UFLAA §7377(d).

[39] UFLAA §7381(a), (b).

[40] UFLAA §7380(a).

[41] UFLAA §7380(b).

[42] UFLAA §7383(a).

[43] UFLAA §7383(b).

[44] UFLAA §7383(c).

[45] UFLAA §7383(c)(5), (12), (13).

[46] UFLAA §7384(a).

[47] UFLAA §7385(a).

[48] UFLAA §7385(b).

[49] UFLAA §7386(e).

[50] UFLAA §7386(a).

[51] UFLAA §7386(e).

[52] UFLAA §7393(a).

[53] UFLAA §7393(b).

[54] UFLAA §7394.

[55] UFLAA §7378(b).

[56] UFLAA §7378(c).

[57] UFLAA §7378(a).

[58] UFLAA §7379(a).

[59] UFLAA §7379(b).

[60] UFLAA §7379(c).

[61] UFLAA §7379(d).

[62] UFLAA §7379(e).

[63] UFLAA §7395(a), (b).

[64] Id.

[65] UFLAA §7395(c).

[66] UFLAA §7395(d).

[67] UFLAA §7395(e).

[68] UFLAA §7395(d)(2).