Arbitration Advantages

• Legally Binding

  The Arbitrator’s powers come from the Arbitration Act 1996 and any decision they make is binding in law. Therefore, it gives a finality about the decision which both parties must stick to, unlike most other forms of ADR. If this has been done in error, appeals can be made but only where there was a ‘Serious Irregularity’. Appeals to the High Court for review under s.68 and s.69 of the Arbitration Act 1996 will aim to deal with any issues with the Arbitrators decision.
• Specialist Knowledge

  Arbitrator has specialist knowledge of the type of dispute which allows fair and speedy decisions. For example, the arbitrator in a building dispute would be a surveyor. This means that the arbitrator can deal with technical issues without the need for expert evidence. The proceedings are also conducted in private and the arbitrator will not allow the media into a hearing. This means that the parties can keep their business private.
• Cost-Effective

  Although there may be a cost for the Arbitrator (eg around £100 for an ABTA Arbitration used in disputes between customers and travel agents), this is significantly cheaper than civil litigation as there are no court fees and the use of lawyers is discouraged so no legal fees. The use of arbitration also represents a cost saving to the state as it frees the courts from dealing with many types of disputes; for example, holiday claims or employment disputes.
• Time

  Some contracts contain a Scott v Avery clause which guarantees Arbitration will be the method used to resolve any dispute if one arises. This makes it quicker as the parties do no need to discuss what method to use. There are two ways arbitration can take place, one way is ‘paper’ arbitration. In particular this method is quicker as the parties simply need to complete documentation to outline their side of the dispute and send it to the Arbitrator. Witnesses too will not need to attend in person but can fill in a witness statement This make the process quicker and simpler. If a physical Arbitration meeting occurs then it will usually be scheduled a lot soon than a court hearing (which usually takes many months) and it will usually only take a day if not less. This is advantageous as the decision reached by the Arbitrator is legally binding and so will resolve the dispute sooner.