ARBITRATION


Arbitration is a legal process, but not court-based. An arbitrator is appointed in agreement by the parties involved, or by other means if they cannot agree, to hear the case put forward by both parties and to make an enforceable legal decision based on the merits of the respective evidence of the parties.

Who are arbitrators?

An arbitrator is generally a lay person with legal training in arbitration. However, anyone can be appointed as an arbitrator, whether trained or not, as long as the disputing parties agree to the choice of individual. But, as the law then says, they get the justice they deserve!

Arbitration has three main advantages over other forms of dispute resolution:

  1. Unlike mediation, it is enforceable through the Courts and, once started, a party cannot withdraw from the process. You can appeal an arbitrator's decision on points of law but not on points of fact.

  2. Unlike going to Court, the arbitrator is nominated by the parties or by some other mechanism. He/she is generally chosen as someone who is already familiar with the technical field or subject matter that is in dispute, often a practitioner in his/her own right. Knowing either or both parties does not disqualify a person from acting as arbitrator, provided that the parties are agreed and the arbitrator feels able to act without bias. By nominating your own arbitrator, a lot of the delay and cost of bringing in experts and explaining technical matters to the Court can be avoided.

  3. Under the Arbitration Act 1996, "the parties are free to decide" much of the way in which the dispute resolution proceeds - if they agree, the arbitrator will generally endorse their agreement; if they cannot agree, the arbitrator will decide, or default rules contained in the Act will come into play. Even such conveniences as when and where the next meeting will take place are arranged by agreement. A difference of opinion on, for example, the number of expert witnesses to be called by the parties will be resolved by the arbitrator, having heard the views of both sides, and in such a way that spending power is not allowed to dominate the conduct of the arbitration.

Although it is a formal process, it is much less formal in that the parties and the arbitrator discuss the way forward, timings, requirements and so on; at the end of each stage, the arbitrator will write formally to each party in the form of an Order, setting out what happens next and any other points that were agreed.

What are the main benefits of arbitration?

Over 90% of all arbitrations are settled before the actual hearing date. As the process develops, the parties begin to see better the logic of the other side and the relative strengths and weaknesses of their own case - it is cheaper to settle than to fight on and lose more!

Many large organisations stipulate arbitration as the method of dispute resolution and have set up schemes to formalise this. If you ever read the small print, you will find that ABTA (dealing with unsatisfactory holidays) and BT have arbitration schemes, managed by the Chartered Institute of Arbitrators. When dealing with such organisations, there is no point at all in threatening Court action - it is a completely empty threat and the Court will not listen to you.

Arbitrate, not litigate!

DISPUTE RESOLUTION MEDIATION GOING TO COURT