What is arbitration?

Arbitration is a formal DR process.  The parties to a dispute appear before an arbitrator and present their arguments and the arbitrator makes a determination which is legally binding and enforceable.  

 

  WHEN SHOULD ARBITRATION BE CONSIDERED?

 o    When avenues such as negotiation, mediation, collaborative law and conciliation have been explored and have been unsuccessful

  o    The dispute is related to a technical (expert opinion or evidence) and/or legal issues

  o    Parties require defined procedures (like that of the courts) but without the costs and delays associated with litigation. The client is also seeking finality

  o  Usually used for commercial disputes and employment matters


 ADVANTAGES

 o    Flexibility: Parties have greater freedom to agree on procedures they wish to use in resolving disputes which will hopefully result in a more efficient and cost effective option than litigation.

 For example, under s 27D of the Commercial Arbitration Act 2010 (NSW), an arbitrator may adopt the approach, with the authorisation of the parties, of a mediator or conciliator, in order to try and resolve the dispute, provided that the arbitrator continues to observe the principles of natural justice

  o    Decision/determination is binding upon the parties in the same way in which a decision of the courts would be binding

  o    Private and confidential

 o    Parties may choose who is to be their arbitrator thus meaning they can choose an arbitrator with particular expertise within the area of dispute. Arbitrators typically have more expertise in the specific subject mater of the dispute than do judges. 

  

  DISADVANTAGES

X  Rules of discovery does not apply

X  There may be an unknown bias in the arbitrator 

X  The client has to give up their self-determination and control over the proceedings whilst allowing a third party to resolve their dispute (similar to that of litigation and very different to the other DR processes).

X  Difficult to appeal the arbitrator's decision/determination  


 COSTS

o    Low however may be costly if the parties select a very eminent arbitrator who is expensive


      REMEDIES

o  Wide range of remedies that can be customised to meet the individual needs

o  Binding and enforceable


      GOVERNING BODIES: 

  o       Institute of Arbitrators & Mediators Australia (IAMA): http://www.iama.org.au/


      Click here for negotiation, mediation, collaborative law, conciliation and litigation
 

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