Arbitration

Question 1

Define arbitration

Answer 1

Private method of ADR, where the parties agree their dispute will be heard and decided by an arbitrator, not a judge.

Question 2

What are the disadvantages of arbitration?

Answer 2

1. Parties choose their own arbitrator, and can therefore decide whether the matter is best dealt with an expert, lawyer or arbitrator.
2. If there’s a question of quality, it can be decided by an expert in that field, which saves expenses and time.
3. Hearing time and place can be arranged to suit both parties.
4. Actual procedure is flexible and parties can choose that which is most suited to the situation. Makes process informal and relaxed.
5. Matter is dealt with in private, no publicity = less stress (good for businesses)
6. Dispute is resolved more quickly than in court.
7. Cheaper than court.
8. Award is normally final and can be enforced through the courts.
9. Paper hearings are available - parties can carry on with their lives.

Question 3

What are the disadvantages of arbitration?

Answer 3

1. No legal aid available.
2. Unexpected legal point may arise which is not suitable for a non-lawyer arbitrator to decide.
3. Fees for a professional arbitrator can be expensive.
4. Expensive if parties opt for a formal hearing, with witnesses giving evidence and lawyers representing both sides.
5. The rights of appeal are limited.
6. Delays for commercial and international arbitration may be nearly as great as those in courts if a professional arbitrator and lawyers are used.