Describe arbitration as a means of civil dispute resolution.

Arbitration is a way of resolving a dispute using an independent and impartial third party who will listen to both sides of the dispute and then decide the best way to resolve it.

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There are a range of different methods of resolving disputes without going to court. These alternative methods are referred to as ‘ADR’ i.e. Alternative Dispute Resolution. They differ and range from informal negotiations between the parties and more formal arbitration hearings which are often applied in business or commercial transactions.


Arbitration as a means of resolving civil disputes is where the parties involved in the dispute agree to refer their dispute to an independent and impartial arbitrator. The Arbitration Act 1996 governs written arbitration agreements. Arbitrators are experts in their particular field whereas a judge is only an expert in the law. Therefore arbitration hearings are shorter as there may be no need for the arbitrator to hear lengthy and complex evidence from expert witnesses as they themselves will be familiar with the forms of contract and nature of disputes that can arise in, for instance, building or civil engineering contracts etc. Arbitration is well established as a means of resolving disputes outside of the civil court system and is the oldest form of ADR.


Arbitration is often used in employment disputes and these are dealt with by the Advisory, Conciliation and Arbitration Service (ACAS).

With arbitration the parties voluntarily submit their dispute to be decided by an independent arbitrator. The arbitrator can be chosen by the parties in dispute, meaning that someone with appropriate specialist technical knowledge can be appointed. If the disputing parties can not agree on an arbitrator, an independent body such as the Chartered Institute of Arbitrators will choose one. Sometimes the dispute is dealt with by a panel of arbitrators.


The agreement to refer a matter to arbitration can be made at any time. Once the decision is made to use arbitration, and the process has started, both parties usually give up their right to resolve the dispute in court or at a tribunal. It is common practice to include an agreement to arbitrate in the event of a dispute as part of commercial contracts. These are known as Scott v Avery clauses after the name of the case in which the principle was established.


The agreement between the parties will nominate the arbitrator or specify the method whereby an arbitrator is appointed. In the event that the parties fail to agree who to use the court can appoint one under the provisions of the Arbitration Act 1996.


The 'arbitration' experience can be argued to be different from other forms of ADR such as mediation and conciliation in that the process can, in some cases, be 'court like' and very formal. The arbitration hearing itself is private and, as a result, such hearings are not reported or made public. This can be a determining factor in deciding whether to agree to submit a dispute to arbitration.



A business organisation may prefer to avoid the risk of adverse publicity about its commercial activities or manufacturing processes which may be extremely damaging to its reputation and business relationships for the future. Court proceedings are, of course, held in open court and are public.


Arbitration is acknowledged by the courts and parliament as a valuable means of resolving disputes. The Arbitration Act 1996 provides that where there is a binding agreement to arbitrate then the matter must go to arbitration and the court will not normally intervene.


The decision of the arbitrator, known as an award, is binding and can be enforced through the courts if necessary. The award is not only based on the law, but also on good practice and reasonableness. The reasons for the decision will generally be given with the award but one disadvantage to arbitration is that it is not easy to appeal against the award, with little scope to do so.


The courts will only overturn the award if there has been some serious irregularity or a breach of principles of natural justice or on a point of law.


There is a growing expertise in the field of arbitration with the development of such organisations as the Centre for Dispute Resolution and the Institute of Arbitrators, which provides training for arbitrators, as arbitration can still be complex although it can usually be dealt with more quickly and cheaply than through the courts.


It is often argued that arbitration has many advantages over the use of the civil courts to resolve a dispute and these include the matter of cost and speed as well as flexibility in that the parties have some say in where and when the arbitration hearing will take place. However it does not always follow that arbitration is necessarily cheaper and faster in all cases and this will depend upon the complexity of the case in question.


One criticism of the arbitration process is that, as the arbitrator is an expert in their field, (as opposed to a judge who is both legally qualified and experienced in the workings of the law), arbitration is not seen as an appropriate forum for resolving legal issues. Whereas in civil proceedings the trial judge is the sole arbiter in legal issues and this is seen as an important part of the work of any judge. It can obviously have a large bearing upon the issues brought out in the trial and the length and cost of the trial itself.


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As always the essay lends itself to expansion and further research using the additional resources and links provided.


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