Tag Archive for: Mediator

Will an Arbitration Clause Protect You?

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When clients come to me wanting a prenuptial or postnuptial agreement, they are typically the party initiating and driving the process because they have assets to protect and want to minimize or completely contain their exposure. These same clients also tend to be litigation averse and view the entire litigation arena as a threatening, menacing process that will invade their privacy, wear them down, diminish their wealth, and possibly compromise their integrity.

As a mediator/litigator, I am in favor of mediation-arbitration clauses for certain clients and this genre of clients fit the bill.

Because they have money and assets, these clients may be the ones responsible for their spouse’s attorneys’ fees during a divorce (under Domestic Relations Law Sections 237 and 238) and they may also be subjected to the rather taxing plight of having to pay numerous expert’s hefty retainer fees to assess their many assets.

Conversely, when clients come in wanting me to be their review attorney for an agreement that has been drafted and prepared by their significant other, they are typically the party with less, who may benefit more from having the court-litigation card to pull out and not cornering themselves into a mandatory resolution through mediation and/or arbitration. On the one hand, I’d be woe to call it the litigation trump card; but essentially, that’s what it is.

Because they have less, they often end up being more dependent on their partner and may need additional oversight, so you want to ensure that their agreement will not bar them from seeking judicial intervention should it be necessary.

What exactly is arbitration and will it offer the first category of clients the protection they seek?

Mediation is a completely voluntary process and non-binding, whereas arbitration is binding. This means that if arbitration is written into the agreement, both parties must participate and submit to the arbitrator. Agreements that contain arbitration clauses usually state that the parties will first try to resolve their case through mediation, and if that is unsuccessful then they will submit to arbitration. Best practice is to include a mechanism for selecting a mutually agreed upon arbitrator so the parties are not left in a situation where they have to attend arbitration and cannot agree on an arbitrator.

Unlike litigation, arbitration decisions are not published. Because it is a more private process, many of the arbitrators are retired judges, and the arbitration meetings take place in comfortable offices, as opposed to courtrooms with court officers and a more authoritative, bureaucratic, and austere milieu. The arbitrator’s decision is also not the final step in the process.

The arbitrator’s decision is also not the final step in the process. Each arbitration decision needs to be signed off on by a judge and formalized by the court. As parens patriae (legal protector of citizens unable to protect themselves, such as unemancipated children), the court also has the ultimate decision-making authority with regards to custody and visitation issues.

There are notable differences between the courts.

The first department (New York County, namely Manhattan, is in the first department), will uphold an arbitrator’s decision, including custody and visitation issues — being that they believe that because a judge ultimately signs off on it, the parens patriae principle is actualized.

The second department (Kings County, namely Brooklyn, is in the second department) will not necessarily uphold an arbitrator’s decision with regards to custody and visitation issues.

New York and Kings counties are my backyard, so I’ve highlighted them to point out the differences between the court’s viewpoints regarding arbitration. These discrepancies carry over into other counties and judicial departments as well, which is why it’s important for clients to have realistic expectations regarding the enforceability of an arbitrator’s decision, particularly if they are planning to include an arbitration clause in their agreements.

While a prenuptial agreement cannot address parenting issues, such as custody and child support, it can state that the parties agree to submit to arbitration to resolve all issues in their divorce. Based on the above discrepancies between the judicial departments, if the parties have a prenuptial agreement with such an arbitration clause and they have children and live in New York County at the time of a divorce, this would mean the arbitrator can determine the custody and parenting issues, it would be binding, and the court just rubber stamps the arbitrator’s decision. However, if the parties live in Kings County at the time of the divorce, they cannot be assured the judge will uphold the arbitrator’s decision on parenting issues.

The relief and clarity for those who want to include an arbitration clause in their agreements is that while they cannot guarantee it will render the arbitrator’s parenting-related decisions enforceable, the courts across the board uphold the arbitrators’ financial-related decisions, including equitable distribution, maintenance/spousal support, and child support.

I recently had a case where opposing counsel initially objected to including an arbitration clause, which was important to my client, because she did not know the law and whether it was enforceable.

Knowledge is power and when I sent opposing counsel the law indicating the degrees and nuances of its enforceability, she acquiesced on the point and my client was relieved knowing that the financial matters, which are most important to him will be resolved through arbitration and not litigation, which he fiercely opposes. He also felt assured knowing that if they reside in New York County with their children at the time of a divorce, even the arbitrator’s custody-related decision will be upheld.

Educate both clients and opposing counsel, when warranted, of all the potential issues and limitations that could come up when they want to include mediation-arbitration clauses or straight up arbitration clauses in their agreements.

Feel free to contact me if you are considering an arbitration clause in your agreement.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

How Camera Shy Are You?

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Courtrooms are, for the most part, open to the public, and if you spend a day in a Supreme Court matrimonial part or Family Court courtroom, you will probably learn who is (allegedly) abusive, a dead beat, a drug addict or an alcoholic as the cases on the calendar are called one by one.

Many of the divorcing parties come to court dressed in their finest for the formal occasion, but as their case details unfold, they cannot clothe themselves enough to cover their vulnerabilities and deficiencies.

These people are usually in a difficult predicament and need bystanders to know what’s going in their lives like a hole in the head. They are not celebrities, who knew well beforehand what they were signing up for. They are ordinary people who often conduct their life with an expectation of privacy.

A group of seasoned matrimonial lawyers posed this dilemma to a panel comprised of some of the New York County Supreme Court and Family Court judges, and the judges conceded that the courtroom and minute books are open availing little privacy in that regard. However, they stated that they publish few decisions, and while this is primarily due to lack of time and resources, they also do so to protect identifying information from being revealed. They further stated that their concern for maintaining anonymity more heavily revolves around protecting the children involved in divorces.

Mediation is more of a foolproof solution toward maintaining the divorcing family’s privacy. In the mediation process, the parties meet with a mediator often in a private comfortable office meant to elicit a more relaxed vibe, and take the edge off (a very different ambience than the often imposing, sterile and cold courtrooms). Many of these offices are discreet and the conversations themselves are between three people – the mediator and the two parties – with no observers. The parties sign a confidentiality agreement to further boost their confidence in the confidentiality of the process (although, arguably, an agreement is only as good as the paper it’s written on, and once signed, requires that the parties respect and maintain its integrity by following its terms). However, mediation is not always a viable option and can only be exercised when both parties are willing participants, so there are inherent limitations.

There is a cost benefit analysis to maintaining open courtrooms and revealing details. The bystanders are most typically attorneys sitting next to their client — other litigants waiting for their cases to be called. While waiting, they often learn how a specific judge navigates and reacts to different case scenarios. This sort of educational process and exposure may often be faster and more efficient, accurate and compelling, than spending hours pouring over case law and general legal research for other litigants and their attorneys to determine how their assigned judge will lean in their case.

Regarding case law research, case law reference and citation is a large part of motion practice. With published cases, surnames are often used (and some of the names are very unusual and uncommon). To add a layer of protection, initials are sometimes used.

It is a very attractive concept to be learning from the details of other cases. The question is, do you want your case to be used as such a platform. While you may appreciate it, in theory, you may want it to be other people’s cases who you and your attorney are learning from to bolster your case and not your case that is being used as an example for others.

So, the question remains and is open-ended: Are there further steps that can or should be taken to better maintain a litigant’s privacy while still maintaining the valuable educational benefits that often flow from the open courtroom and revealing case law.

Feel free to contact The Law & Mediation Offices of Cheryl Stein with any questions.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
745 Fifth Avenue, Suite 500
New York, NY 10151
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com

There’s No Such Thing as a Gentlemen’s Agreement…and Then Some!

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Often when couples first begin talking about divorce, they come up with their own agreement: “I’ll take this, and you’ll take that…I’ll be responsible for this, and you’ll be responsible for that.” Sometimes, they recruit a mutual friend to play makeshift mediator, and then somewhat live under the terms of the agreement they contrive. However, this agreement is unenforceable, as it is usually either a gentleman’s agreement or one written, but not signed, notarized, and acknowledged in the manner required by the courts to deem an agreement enforceable. Ironically, divorcing parties are often “stuck on” this initial “home-baked” agreement. Fast forward a bit to one of the parties becoming disgruntled enough to commence a litigation action. Within the litigation context, they often keep referring to that initial agreement, which bears no weight.

An analogous situation can occur in mediation. Mediators typically have each party sign a waiver stating that anything said in mediation is private, confidential, and cannot be used in litigation. The parties often strike agreements on various issues and start planning their future and making arrangements based on their agreements. If mediation falls apart and litigation begins, what the parties agreed to during mediation is meaningless. Nevertheless, the parties are often so stuck on what happened in mediation, where they were an active participant, able to get many concessions they were satisfied with, that four years later they are still reminiscing about it with nostalgia. It wasn’t successful—why be fixated on something that didn’t work.

In one extreme example of a mediation case gone sour and turning into a bitter litigation battle, the husband broke into the mediator’s office at night to steal the records from his case, which he thought would highlight the concessions his wife agreed to make during mediation. Besides being a criminal act and downright meshuga, to what end? What was to be gained? The deals struck in mediation stayed there and are bootless.

When divorcing parties start to live under the terms of the agreement before it’s actually drafted, it can be like a house of cards that falls apart. It is important that adequate protections are in place and that things happen in a sequential order.

A good practice is to have “interim agreements” or “stipulations.” In litigation, parties typically enter into stipulations along the way as they settle and resolve select issues and can then move forward to tackle the outstanding issues. For example, there may be a custody trial or settlement with a parenting agreement executed, on the heels of which follow the financial aspects of the case. It is wise to engage in a similar practice in mediation. The parties should each have consulting attorneys, and valid interim agreements can be entered into as the mediation progresses.

In almost every case, there are the pressing, time-sensitive or “elephant in the room” issues that need to be tackled first, which often include but are not limited to:

•Custody, visitation, and parenting issues.

•Interim support plan.

•One spouse moving out of the marital residence.

•Closing joint accounts and devising a plan to pay off marital debt.

•Deciding whether to file tax returns jointly or separately and who claims the children as dependents.

•Removing one spouse’s name from investments they know nothing about and feel they may need immediate protection from.

With the guidance of consulting attorneys, valid agreements can be entered into, settling each of the situations the parties are most concerned about along the way.

Often, when parties resolve the matters they are most anxious about, the rest falls into place more easily.

Whether parties choose to litigate or mediate, it is important to consult with an experienced attorney at the very beginning, when they start thinking about divorce or discussing it with a spouse, to ensure they are adequately protected.

Feel free to contact me with any questions.

Cheryl Stein, Esq.
The Law and Mediation Offices of Cheryl Stein
Offices in Manhattan and Brooklyn
Phone: (646) 884-2324
E-mail: cheryl@cherylsteinesq.com