Decisional Processes - Arbitration & Adjudication

Nature of Arbitration

Arbitration (sometimes called “Adjudication”), is a private, trial-like process that can be commenced by any two or more parties who agree to arbitrate — either under a contract, by legislation, or by simple written agreement.  A properly designed, well managed arbitration process can be completed quickly and is a highly efficient means of resolving many types of dispute.

The Arbitrator is usually an expert in the area of the dispute, eg: an accountant for a financial/commercial dispute; a doctor for a medical dispute etc.  If the issues are mainly legal in nature, the Arbitrator may be a legal expert, eg: a solicitor, barrister or even a retired judge. 

All properly qualified arbitrators have been trained and tested in both law and arbitration process, in addition to their own professional/technical training.  Experienced arbitrators can therefore deal very efficiently with both difficult legal and technical issues. 

The main advantage of appointing an Arbitrator to determine a technical dispute lies in their dual qualification in law and their own discipline.  This substantially reduces the time otherwise required to educate the Arbitrator in the technicalities of the dispute.

In large cases a panel of (usually) three Arbitrators may be appointed to cover all likely technical and legal aspects of the dispute (eg: engineer + lawyer + accountant).   Each arbitrator is briefed to take the lead in their respective areas of technical expertise.

Arbitrations are conducted under the Commercial Arbitration Acts.  The Acts give Arbitrators most of the power and authority of Supreme Court judges.  The Acts encourage Arbitrators to use this power to make the process quick, fair, pragmatic, tightly managed and, above all, cost-effective.

The Arbitration Process

In effect, an Arbitrator is appointed to be a “private judge”, and is required to manage a confidential, “private trial”. 

The process is adversarial, like conventional litigation, although the parties and the Arbitrator can determine the degree of formality required.  This decision should be based on trying to achieve the most time and cost-efficient process, above all other considerations.  Inevitably, the more formal the process, the lengthier and more expensive it becomes.

Depending on the issues and the parties, the whole process can be based solely on documents.  However, most arbitrations involve hearings where, under the watchful eye and control of the Arbitrator, the parties have an opportunity to present and promote their arguments and to have them tested by their opponents.

After all information and arguments have been presented and tested, the Arbitrator evaluates everything he or she has heard or seen and produces a written decision, called the "award".  The award is legally binding on the parties and is enforceable through the courts, like a court judgment.  It provides finality because it can only be appealed, directly to Court, on very restricted grounds - and even these can be excluded by agreement!

Benefits of Arbitration

Well-managed arbitrations can deal efficiently with a vast range of disputes.  Small, non-complex disputes can usually be resolved within weeks, while even the largest and most complex disputes should only require a few months to resolve – an attractive proposition compared to the years such disputes take in the courts.

Well-managed arbitrations are much cheaper and quicker than conventional litigation.  Parties are generally more satisfied with the outcomes as they are more involved in the process and gain a better understanding of what is happening.

Confidentiality is another advantage of this process - both the problem and its solution remain confidential - often a critical factor in sensitive commercial and family business disputes.