Supported by the courts, carried out in private, decisions of arbitrators are binding and enforceable
With good reason, parties that are finding themselves involved in deadlocked dispute are now turning to Arbitration and Mediation rather than complete their action through the courts. Arbitration and Mediation continue to be two highly effective forms of alternative dispute resolution. Choosing this route, you’ll arrive at a binding conclusion away from the difficulties and public nature of court. It will also be a lot less expensive.
Arbitration V’s Mediation
The main differences between Mediation and Arbitration are that in Mediation the mediator assists the parties to negotiate their way to a mutually agreed settlement, whereas with Arbitration the arbitrator actually makes the decision (called an award). A mediator has no authority to impose a decision on the parties.
In an arbitration, the arbitrator receives evidence and listens to the arguments, much like a judge. He then makes a decision that is binding on the parties and enforceable in the same way as a judgment. This procedure is preferable to mediation in a situation where the parties cannot agree, or there is an outstanding issue which requires a decision from a third party. But see the section on ARB/MED
Arbitration V’s Court
If the matter goes to court the case is likely to take a very long time before judgment is reached – often many months or even years. This is partly because of the amount of preparatory work which has to be done, sometimes involving preliminary hearings before a judge (“case management conference”), and partly because the courts are very busy and it is difficult to find a vacancy for a hearing. An arbitration, with the cooperation of the arbitrator, can take place much earlier, and at a time and place convenient to the parties. They can also choose their own arbitrator. [see below]
In addition court proceedings can be very expensive and can often exceed the amount of money or value involved in the case. The cost of an arbitration should be very much less even though the arbitrator has to be paid. Of course, nowadays it can be expensive to start court proceedings because of the fees payable to the court. Costs of litigation
Another advantage of mediation is that the award of the arbitrator can be made final as well as binding. This means that with rare exceptions there can be no appeal, whereas in a court case the losing party always has the right to ask for permission to appeal, and will be granted permission if an appeal stands a real prospect of success. In such a case a final decision can be postponed for many more months.
All in all, parties are finding that the flexibility found in these services is preferable to the rigidity, formality and drawn out nature found in the court system.
If both sides have agreed to choose a neutral third party in the form of an arbitrator to determine a dispute, the relationship between the parties may even be able to continue successfully afterwards. It is therefore much more likely to end with the issue resolved in a satisfactory manner than a court might deliver.
The benefits of Arbitration
When deciding which route to take in breaking the deadlock in your dispute, it is helpful to have an understanding of the benefits to arbitration:
- The proceedings are private
- Independent third party makes the decision
- Less expensive & fixed fees
- Expert testimony can be heard
- Less time consuming
- A sympathetic and less formal process
- Avoids court backlogs
- Decisions are legally binding
When & How to take action
By taking action now, the process is easy and fast. Very quickly you will gain confidence in the process as you feel the benefits of dealing with an experienced and skilful arbitrator.
You can make your initial enquiry by phone or email and this is free to do.
After that, all work is carried out on a prearranged fixed fee basis, so you will always know exactly where you stand. At an early stage you need to get the other side to agree to arbitration in principle, and then to agree on the arbitrator.
This is because in order to be entirely neutral, both in appearance and in reality, all correspondence with the arbitrator will need to be copied to the other side.
You should make contact straight away if…
- You want a legally binding decision made
- You are stalled into a deadlock
- Communications have largely broken down
- You don’t want ‘legal action’
- You want the process to be kept private
- An issue is dragging on for months or years
- You have a legitimate grievance
- You want an issue resolved quickly
- You want to avoid escalating legal costs
Choosing an arbitrator:
For more information on this topic you can read Choosing an arbitrator
See Stewart being interviewed in depth about arbitration