Cogs 670x270

When to Avoid Arbitration.

Posted on 21/03/2016 · Posted in Arbitration

Arbitration is a form of alternative dispute resolution (‘ADR‘) which is actively encouraged by the courts through the litigation process and is today most commonly used for the resolution of commercial disputes. An arbitrator’s role is similar to a judge’s in so far as they are an independent and entirely neutral third party who reviews all the evidence and makes a resulting judgement; like a judge, an arbitrator’s final decision is also considered legally binding. However an arbitrator resolves disputes outside the courts and is most likely to be a subject matter expert in their own right.

Disputing parties often favour the arbitration route as it offers the privacy and flexibility that formal judicial proceedings usually would not, and the optional use of subject matter experts. Arbitration as a process is usually more time and cost efficient, and can also often offer up more practical solutions than court proceedings.

Arbitration is a good way of levelling the playing field and finding a reasonable mutually acceptable solution in a reasonable time frame; because disputing parties are encouraged to participate fully and even to actively collaborate to find a solution, this means the environment is less hostile and tensions may be less likely to escalate.

No battle is worth fighting except the last one”
Enoch Powell

But when is arbitration best avoided? Being aware of the possible drawbacks of arbitration, and when not to go down this route of alternative dispute resolution, but rather choose mediation or litigation, is important.

  • No going back – An arbitrator’s decision is final and legally binding, so if a party doesn’t like this decision or deems it unfair, there is little they can do to change it. Arbitration decisions are rarely reviewed by the courts.
  • A Closed Book – It is mostly viewed as a positive that arbitration hearings tend to be held in private rather than in an open court and decisions are not shared publicly, however in some cases this lack of transparency is considered as possibly opening the process up to bias.
  • Rising Cost – While it is generally agreed that arbitration is still a more cost efficient route than judicial court proceedings, it is becoming more expensive with arbitrators’ fees and administrative costs all adding up. There is also the potential for an uncooperative party to delay or disrupt proceedings (and thus create more cost all round) more easily than in court litigation.
  • Suitability – Arbitration is not suitable for every dispute and some types of dispute cannot be referred to arbitration; these include criminal cases, divorce, and planning laws, which restrict landowners’ property development rights.

Expert Evidence is a professional firm concentrating on the four main areas of dispute resolution; acting as expert witnesses in financial litigation, mediation, arbitration and adjudication. The firm has a civil, criminal and international practice and has advised in many recent cases. Areas of specialisation include banking, lending, regulation, investment, and tax.

Ask a question about arbitration services. We are here to help!

Contact Us Now

Disclaimer – Please confirm any of the above views with your solicitor. Expert Evidence takes no responsibility or provides any guarantee that the views above are correct for your particular case or jurisdiction.