Arbitration

Settling a dispute by using a referee.

Settling a dispute by using a referee. If a dispute goes to arbitration it is settled by an independent referee. It avoids having to use the courts to settle the dispute.

This is where the parties involved in the dispute agree to refer their dispute to an independent arbitrator. The Arbitration Act 1996 governs written arbitration agreements.  Arbitrators are experts in their particular field, whereas a judge is only an expert as to the law.  Therefore arbitration hearings are shorter as there may be no need for the arbitrator to hear lengthy and complex evidence from expert witnesses as they themselves will be familiar with the forms of contract and nature of disputes that can arise in say building or civil engineering contracts etc:

The argument to refer a matter to arbitration can be made at any time.  Although it is common to include such an agreement to arbitrate in the event of a dispute as part of commercial contracts.  These are known as Scott v Avery clauses.

The courts and parliament acknowledge arbitration as a valuable means of resolving disputes.  The Arbitration Act 1996 provides that where there is a binding agreement to arbitrate then the matter must go to arbitration and the court will not normally intervene.  The decision of the arbitrator, known as an award, is binding and can be enforced through the courts if necessary.  The courts will only overturn the award if there has been some serious irregularity or a breach of principles of natural justice or on a point of law.

There is a growing expertise in the field of arbitration with the development of such organisations as the Centre for Effective Dispute Resolution and the Chartered Institute of Arbitrators, which provides training for arbitrators. Arbitration can still be complex, but it can usually be dealt with more quickly and cheaply than through the courts.

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