Family Offices

Family Office Dispute Resolution

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What legal mechanisms can we use to resolve family disputes?

Family disputes—particularly in the context of high-net-worth (HNW) and ultra-high-net-worth (UHNW) families—can arise from disagreements over wealth, succession, governance, or personal relationships. These conflicts can jeopardize both family harmony and the long-term stability of family businesses or trusts. Fortunately, a variety of legal mechanisms exist to resolve family disputes discreetly, efficiently, and with minimal public exposure. These can include mediation, arbitration, family meetings, family constitution or governance agreements, and litigation.

Mediation is a confidential, non-binding process where a neutral third party helps the family reach a mutually acceptable resolution. It is often used to resolve inheritance disputes, and divorce settlements, succession disagreements, and shareholder conflicts in family businesses. When properly deployed, mediation can have the benefit of preserving family relationships and upholding privacy and discretion at a reduced expense compared to litigation.

Arbitration offers a more formal, binding alternative to court litigation, often governed by rules agreed upon in advance (e.g., ICC, LCIA). It is well-suited for disputes involving family offices or trusts, cross-border business disagreements, or contractual conflicts within family-owned entities. Benefits of a robust arbitration process pursued through an international law firm like Curtis includes an increased likelihood of enforceable outcomes, confidentiality in the course of the proceedings, and international recognition of arbitral awards.

Proactively establishing a family constitution, shareholder agreement, or governance charter can help prevent disputes by defining roles and responsibilities, clarifying succession plans, and outlining dispute resolution procedures (e.g., mandatory mediation or arbitration). These legal documents act as a framework for long-term cohesion. Curtis also encourages families to hold family meetings and engage in goal-setting to ensure that these family documents are being maintained and upheld.

Finally, in high-stakes or deadlocked cases, litigation in civil court may be necessary. Common scenarios where litigation may come into play include contested wills or trusts, enforcement of a breach of fiduciary duty claim against trustees or directors, or divorce and custody disputes with cross-border elements. While litigation can be time-consuming and public, it may be the only path to enforce legal rights in some situations, and a robust family office practice will be cognizant of its value as a potential problem-solving mechanism.