How to Choose an Arbitrator.

Posted on 29/03/2016 · Posted in Arbitration

Arbitration is a form of alternative dispute resolution, often chosen over litigation as a faster, more flexible and cost effective route to resolving disputes. Arbitration is an increasingly popular choice in the modern dispute resolution landscape as businesses and individuals seek to save time and money that they would otherwise incur going down the more expensive and protracted formal litigation route. Arbitration is also becoming a more popular alternative to formal litigation because it offers more flexibility – parties can agree on the venue and timing of the arbitration and even have some influence over the choice of arbitrator used. It is also a confidential process which appeals to parties who do not wish to have their disputes aired in the public domain, and because the arbitrator’s decision is final and legally binding, there is limited room for appeal.

As arbitration becomes an increasingly attractive alternative way of resolving disputes, arbitrators are ever more in demand and their roles increasingly important.

An arbitrator’s role bears similarities to that of a judge’s in a court proceeding, in so far as he or she is an independent third party who carefully considers and analyses the evidence put before him or her, drawing on knowledge of relevant laws and policies in order to weigh up each party’s case and make a resulting ruling. But, unlike a judge, an arbitrator resolves disputes outside the courts and is most likely to be a subject matter expert in their own right. An arbitrator will come to an informed, carefully considered decision upon hearing all the evidence presented by each party at a hearing, drawing on their legal and professional knowledge.

While arbitration usually takes place in a more informal setting than a court of law, nevertheless it is a formal and binding process, so the arbitrator’s ruling (or ‘award’ as it is known in arbitration proceedings) is final and can only be appealed in certain circumstances. Because the right of appeal against an arbitral award is so rare, ensuring the arbitrator is capable of understanding the issues at hand in order to reach the appropriate ruling is of vital importance. Choosing the right arbitrator is fundamental to the outcome of the dispute, and both disputing parties must have absolute faith in their chosen arbitrator from the start of the process.

The opportunity to participate in the selection of your own arbitrator is a key feature of arbitration, and another contributing factor to why arbitration is becoming ever more popular as a means of dispute resolution. The process of choosing an arbitrator should not fill the selecting party with trepidation, but instead it should be one of the most positive phases of the process, in which parties feel that they have trust and confidence in their chosen arbitrator.

By law, arbitrators are required to be both ‘impartial’ and ‘independent’ but the law does not impose restrictions on who can become an arbitrator, and an arbitrator does not need to have formal legal training. In fact, where disputes revolve around a specific industry the disputing parties may seek to appoint an arbitrator who has experience in that sector and therefore is better able to understand its complexities. For example, a dispute involving financial regulation will mean an arbitrator who has experience in that specific sector will be more familiar with the issues being discussed and will not need basic industry concepts and terms explained to them.

It doesn’t matter which side of the fence you get off on sometimes. What matters most is getting off. You cannot make progress without making decisions”
Jim Rohn

Arbitrators also have a number of procedural rules they are bound by, so it is not just their subject matter expertise that should be considered, but also their softer people-handling skills. Section 33 of The Arbitration Act 1996 states that an arbitrator must “adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.” Another of the recognised advantages of arbitration as a dispute resolution tool is the flexibility of the process, but this also means that it must be very carefully and expertly managed. The way an arbitration is managed can have a real impact on the length, efficiency and ultimate success of the process. A badly managed arbitration can lead to protracted disagreements and delay, resulting in unnecessary time, cost and stress for all participants.

When choosing an arbitrator, parties should therefore not only take into account the arbitrator’s professional knowledge and expertise but also, just as importantly, their practical experience as a successful arbitrator and manager of the arbitration process. Determining an arbitrator’s practical experience may involve looking past their impressive business credentials and into what makes them a balanced human being. The process of choosing an arbitrator can be likened to a business interview in which the employer would consider factors such as the employee’s interest in and ability to discuss a wide number of important topics, a natural inquisitiveness and evidence of empathy. These qualities whilst important in the business world may prove even more fundamental for a confident and controlled dispute practitioner.

Choosing an arbitrator can be done through word of mouth, following recommendations from legal professionals, or by accessing accredited lists of arbitrators often provided by professional networks for dispute resolution, such as the Chartered Institute of Arbitrators. If parties cannot agree on an arbitrator within a specified time period, then the courts may select the arbitrator.

Given the arbitrator’s crucial role at the heart of the arbitration proceedings, and his or her final authority in deciding the outcome of the dispute, nothing could be more fundamental to a positive process and mutually acceptable outcome than finding the right arbitrator for the job.

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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.

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