Pathways to Safety: Improving the Financial Autonomy of Australian Women Leaving Violent Relationships through Accessible Property Settlements

Kaylee Neil, Menzies Foundation Fellow for the UN Commission on the Status of Women

Executive Summary

Family and domestic violence (FDV) is a leading cause of poverty and homelessness among women and their children in Australia (Homelessness Australia, 2024). Obtaining a just and equitable property settlement is often the difference between poverty and financial independence in the immediate aftermath of separation. However, exorbitant legal fees and lengthy family law proceedings dissuade women from seeking settlements. This paper recommends that the Australian Government invite Legal Aid Commissions (LACs) to apply to deliver family law arbitration services over a two-year trial period, with the aim of expediting settlements and alleviating pressure on the Federal Circuit and Family Court of Australia (FCFCOA).

Problem Identification

Gender cannot be overlooked when discussing family and domestic violence (FDV). While it is important to recognise that anyone (regardless of gender) can experience violence, women continue to be disproportionately affected by FDV in Australia and across the globe. The risk of a woman experiencing FDV is also heightened by intersecting factors such as race, sexuality, disability, and mental health (AIHW, 2023). In Australia, over 1 in 4 women have experienced FDV since the age of 15 (ABS, 2023). Between 2022 and 2023, one Australian woman was killed every 11 days by a former or current intimate partner (AIHW, 2023).

Securing financial autonomy for women following separation is crucial for achieving gender equality and preventing the cycle of violence. However, the Australian Council of Trade Unions (ACTU) estimates that it costs an average of $18,000 to leave a violent relationship (ACTU, 2023). Approximately 45% of women seeking assistance for homelessness identify violence as a cause (Homelessness Australia, 2024). When asset division occurs, women who have experienced family and domestic violence are more inclined to accept unfair property settlements and are three times more likely to receive less than 40% of the asset pool (Parliament of Australia, 2017).

The stress and trauma associated with navigating the legal system often takes a significant psychological toll on families. When women fear the legal system will not provide adequate protection or remedies, they are more likely to be discouraged from pursuing a settlement, thus often remaining financially dependent on an ex-partner (Parliament of Australia, 2017).

The cost and duration of finalising a property settlement varies significantly depending on the extent of negotiations required and whether the matter is settled by consent (without the need for judicial intervention). In addition to the cost of legal representation—wherein solicitors and their counsel may charge hundreds or even thousands of dollars an hour for their services—parties must also meet the costs of valuations, dispute resolution services, and Court filing and administrative fees. As highlighted by FCFCOA Chief Justice William Alstergren:

"Costs in family law litigation are often disproportionate to what they are fighting over. It is not unusual for people to spend 20, 30 or 40% of their worldly assets on fees – and they have not even gone to trial." (ABC News 2023)

The demand for cost-effective legal services far exceeds available resources. While 13% of Australians live in poverty, just 8% are currently eligible for legal aid assistance (National Legal Aid, 2023). According to the Justice on the Brink report commissioned by National Legal Aid (NLA), Legal Aid Commissions require an additional $484 million in funding to prevent immediate supply failure and improve means testing.

Context

Family law disputes are inherently complex and unique. Before filing an Initiating Application with the Court, parties must attempt to resolve the dispute through mediation (FCFCOA Rules 2021 (Cth) s 4.1). The requirement to engage with dispute resolution services is designed to encourage settlement outside of the lengthy and costly Court process. However, a lack of engagement with pre-action procedures or refusal to comply with disclosure obligations can prolong settlement, perpetuate financial abuse, and necessitate a costly application to the Court.

Judicial and Policy Landscape

Options for Finalising Property Settlement

To formally finalise a property or financial settlement, parties can:

1. File an Application for Consent Orders and Minutes of Consent with the Federal Circuit and Family Court of Australia.

When both parties agree on Orders relating to their children or property, they can file an Application for Consent Orders and Minutes of Consent with the Court without engaging in litigation (FCFCOA Rules 2021 (Cth) s 4.09). Parties can also file these documents at any time during Court proceedings if they reach an agreement and wish to cease proceedings. If the Court is satisfied that the proposed Orders are just and equitable and in the best interests of any children, an Order will be made to that effect (FCFCOA Rules 2021 (Cth) s 10.07). Between 2022 and 2023, 15,782 separated couples filed an Application for Consent Orders with the Federal Circuit and Family Court of Australia (FCFCOA, 2023).

2. Enter into a private Financial Agreement.

A Financial Agreement (also known as a prenuptial agreement) is a private agreement between two parties about how assets, liabilities, and financial matters should be divided in the event of separation. Parties can enter into a Financial Agreement before marriage, during marriage, or after separation. For a Financial Agreement to be binding, both parties must receive independent legal advice (Family Law Act 1975 (Cth) s 90G). Unlike Consent Orders, there is an increased risk that the Court could set aside a Financial Agreement, such as when a party fails to disclose assets (Family Law Act 1975 (Cth) s 90K). It is difficult to estimate how many separated couples enter into private financial agreements; however, given the increased risk of an agreement being set aside, they are likely much less common than other resolution pathways.

3. Make an Application to the Federal Circuit and Family Court of Australia seeking a Court determination.

The duration of the Court process can vary significantly depending on the complexity of the matter, the nature of the issues involved, the availability of the Court, and whether the parties can reach an agreement during proceedings.

Over 80% of matters that proceed to Court involve allegations of family violence, child abuse or risk, highlighting the level of complexity within the judicial system (FCFCOA, 2023). The volume of disputes before the Court is also cause for concern. Between 2021 and 2022, 13,179 Applications for Final Orders and 20,051 Applications for Interim Orders were filed with the Court (FCFCOA, 2022).

The Federal Circuit and Family Court of Australia currently utilities the following Case Management Pathway:

Figure 1 – Case management pathway used by the Federal Circuit and Family Court of Australia.

4. Attend upon an Arbitrator to prepare an Arbitration award.

Arbitration is a dispute resolution process where a neutral third-party arbitrator is appointed to hear and decide on property division (FCFCOA Rules 2021 (Cth) s 1.2.6). This process is an alternative to traditional litigation, allowing parties to bypass the lengthy and costly Court processes. Unlike other forms of dispute resolution such as mediation where a practitioner attempts to facilitate an agreement between the parties, the decision made by an arbitrator is binding and enforceable.

To date, Legal Aid Queensland (LAQ) is the only Legal Aid Commission (LAC) in Australia that offers family law arbitration services. Under the existing LAQ model, private practitioners are paid by LAQ to conduct arbitration (Legal Aid Queensland, 2023). Once an arbitrator is appointed, representatives for each party present written submissions to the arbitrator. Alternatively, representatives for each party may provide oral submissions by phone. The arbitrator then provides the parties with a binding decision (known as an arbitration award) within 28 days of receiving submissions. The parties can then apply to register this decision with the Federal Circuit and Family Court of Australia.

Between 2020 and 2023, 307 property disputes in Australia were finalised through registration of an arbitration award (FCFCOA, 2023). Although less common than traditional litigation, arbitration is an expeditious process and, by extension, often more cost-effective for the parties involved.

Existing Initiatives 

Since the introduction of the Family Law Act 1975 and the establishment of the Family Court of Australia in 1976, the family law system has been subject to numerous parliamentary inquiries and reforms.

In recent years, several initiatives have been introduced to simplify and streamline existing resolution pathways, including (but not limited to):

1. Property Mediation Program

The property mediation program, conducted by Legal Aid Commissions across Australia, provides cost-effective dispute resolution services to separated couples seeking property division with net assets under $500,000 (AGD, 2018). Initially run as a pilot program and then continued due to its success, the program seeks to improve resolution pathways for separated couples with property pools that might not justify the expenses associated with private mediation or Court proceedings. A 2022 evaluation of the pilot evaluation found that 62% of matters that proceeded to mediation were either partially or fully resolved (AIFS, 2022).

2. The Priority Property Pool Program (PPP)

The Priority Property Pool Program (PPP) is an initiative by the FCFCOA to simplify and streamline the Court process for separated couples with a modest asset pool, specifically those with assets under $500,000 (FCFCOA, 2023). Aimed at reducing Court delays and expanding opportunities for early settlement, the program was expanded nationally in 2023. A 2022 evaluation of the pilot program found that between 12-22% of all disputes filed in the FCFOCA between 2020 and 2022 were eligible for the program, with parties settling on average two and a half months earlier than those not involved in the program (AIFS, 2022).

3. National Arbitration List (NAL)

Established in 2020, the National Arbitration List (NAL) is a specialised list within the FCFCOA that oversees matters Court referred arbitrations (FCFCOA, 2023). It is primarily responsible for facilitating the effective conduct of arbitration and handling applications made in relation to Arbitration Awards. Recent legislative reforms and policy initiatives represent positive steps towards improving Australia's family law system, but ongoing success relies on resource allocation. The family law system has historically struggled with resource constraints, leading to delays and inadequate support for separating couples and their children.

Options

Potential policy solutions are as follows:

1. The Australian Government invites Legal Aid Commissions (LACs), via a closed, noncompetitive process, to apply to deliver a two-year pilot arbitration program.

This proposal involves launching a pilot program in which Legal Aid Commissions would deliver arbitration services as an alternative dispute resolution mechanism. Family law arbitration involves resolving disputes between parties in family law matters through a private, legally binding process, where an independent arbitrator makes a binding decision in relation to property settlement. Arbitration is generally less formal, quicker, and more cost-effective than litigation.

Not all matters may be suitable for arbitration. This option may not address broader systemic funding issues within LACs. LACs may require additional unforeseen resources to deliver an arbitration program effectively. Additionally, it may take time to build public trust and awareness of arbitration as a suitable alternative to litigation.

2. The Australian Government provides an additional $484 million in funding to Legal Aid Commissions (LACs) and Community Legal Centres (CLCs).

This proposal involves additional funding to LACs to address existing supply challenges, expand access to legal assistance, and improve the criteria for means testing. By increasing funding to LACs and CLCs, more people would qualify for legal aid, addressing significant gaps in access to justice for vulnerable populations. It would also help to alleviate the heavy pressures faced by LACs and CLCs, ensuring that legal practitioners can provide quality assistance.

This initiative would require a significant financial investment with potentially uncertain short-term outcomes. Ongoing funding might be necessary to maintain the program’s benefits beyond the initial injection, and it would not directly address delays or underresourcing in the court system.

3. The Australian Government provide funding to appoint additional full-time members to the Federal Circuit and Family Court of Australia.

This measure would directly address delays and backlogs in the court system, improving public trust in the legal system and reduce pressure on lawyers, litigants, and ancillary support services.

This approach primarily addresses the symptoms of delays rather than the root causes, such as the high demand for litigation. Furthermore, judicial appointments involve long-term salaries and associated expenses, and this measure would not directly tackle broader issues related to the resolution of property disputes.

Policy Recommendation

Of the options presented, it is recommended that the Australian Government invite Legal Aid Commissions (LACs) to apply to deliver a two-year pilot arbitration program aimed at improving property settlement outcomes for women leaving violent relationships. Arbitration typically provides a binding and enforceable decision faster than traditional litigation, enabling women to obtain expeditious property settlements—a crucial step in securing financial independence after separation.

While mediation is a powerful tool, there are many matters that cannot be resolved through the negotiation process. Expanding the existing Legal Aid Queensland arbitration model into a national pilot program could help reduce time and costs associated with resolving property settlement matters, helping to break the cycle of poverty and violence.

1. Implementation

The Australian Government could formally invite Legal Aid Commissions through a closed and non-competitive process on GrantConnect to deliver a pilot property arbitration program. Based on the existing Legal Aid Queensland model, the pilot program could initially target separated couples with net asset pools between $20,000 and $500,000 (Legal Aid Queensland, 2023). A consistent approach should be adopted across states and territories to ensure eligibility is applied fairly.

It is recommended that Legal Aid Commissions (LACs) be responsible for implementing the program, ensuring it is consistent with existing guidelines and initiatives. For example, LACs may maintain a panel of private practitioners eligible to conduct arbitration. These practitioners should meet specific criteria and demonstrate expertise in family law. Matters may be referred to arbitration by the Federal Circuit and Family Court of Australia (FCFCOA) or upon application by LACs.

The program should be designed to accommodate the unique needs of vulnerable populations, including culturally and linguistically diverse communities. This could be achieved by ensuring that arbitration practitioners are trained in trauma-informed practice and have a deep understanding of the complexities faced by vulnerable parties.

The Australian Government could provide an initial investment of $10.3 million for the two year pilot program, matching the funding provided to Legal Aid Commissions during the property mediation pilot program (AGD, 2018).

To estimate how this funding may be distributed, the allocation could follow a similar pattern to the expenditure of the Family Law Property Mediation trial program (Figure 2), with amounts varying by state or territory based on factors such as population size, demand for services, and specific regional needs.

Figure 2 – Operating expenditure of two-year Family Law Property Mediation trial program

State/Territory	Expenditure
ACT	$112,648.00
NSW	$1,178,449.00
NT	$361,223.00
QLD	$1,122,727.14
SA	$548,771.05
TAS	$356,415.00
VIC	$960,811.82
WA	$882,352.00
Total	$5,523,397.01

Table adapted from Australian Institute of Family Studies (2022).

2. Outcomes

The pilot program is projected to:

a. Enhance property settlement outcomes for separating couples,

b. Improve financial stability and reduce economic hardship for women post-separation,

c. Minimise delays in the legal system and accelerate resolution of property disputes,

d. Reduce the complexity of navigating the family law system, and

e. Decrease the number of family law matters requiring judicial intervention.

After the pilot program concludes, the Australian Institute of Family Studies (AIFS) could conduct an independent evaluation similar to evaluations of the Priority Property Pool Pilot Program and Property Mediation Program. This assessment could include feedback from participants and stakeholders and data analysis, assessing financial outcomes, resolution timeframes, and participant satisfaction.

The cost of specific AIFS reports is not always publicly disclosed, making it challenging to estimate the funding required to conduct an evaluation. However, it is known that between 2023 and 2024, the total operating revenue for AIFS from government appropriations was $5,050,000, providing an indication of the financial support AIFS receives from the federal government to commission such reports (Australian Institute of Family Studies, 2024).

3. Limitations

The current Legal Aid Queensland model stipulates that not all property disputes are suitable for arbitration, including in matters where there is:

a. A business involved,

b. A third-party claim,

c. Debt, or

d. Outstanding dispute regarding parenting matters.

The program would be limited to those who meet the means and merits test imposed by state and territory Legal Aid Commissions. Legal Aid programs are not free; parties may be required to contribute a nominal fee to cover the arbitrator's costs (Legal Aid Queensland, 2023). Both parties must have legal representation to participate in arbitration, which could create a barrier for those who cannot afford private legal representation. To address this, Legal Aid Commissions could offer subsidised legal representation for eligible individuals to participate in the arbitration program.

Like other forms of dispute resolution, arbitration is voluntary. A party cannot be compelled to participate in arbitration. While the Court can order the parties to attend arbitration, it can only do so with the consent of both parties. If one party refuses to participate in arbitration, the other party may have no choice but apply to Court. While arbitration awards are binding and enforceable, applying to the Court may be necessary if one party refuses to follow directions after receiving the award.

References

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