Arbitration - ways of resolving civil disputes.

Lisa Terry

ADR Law Exam – Jan 2001

5a) There are a number of alternative ways of resolving civil disputes other than an action before the civil courts. The range of alternatives available include tribunals, arbitration, mediation and conciliation.

Arbitration is one method to resolve disputes without court action. Both sides voluntarily agree to an independent third party making a decision on their case. Arbitration is an alternative to court action (litigation), and generally, just as final and binding (unlike mediation, negotiation and conciliation which are non-binding). This process is governed by the Arbitration Act 1996.

General principles of arbitration are as follows:

The object of arbitration is to obtain a fair resolution of disputes by an impartial third party without unnecessary expense or delay.
Parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest.
Courts should not interfere.

There are three different classifications of arbitration which are:

Commercial arbitration; this is the most common of disputes. Just as it sounds it is a dispute between two commercial enterprises. The Scott v Avery (1855) case signalled this new approach, so a clause in a contract pre-agreeing arbitration is called a Scott Avery Clause.
Consumer arbitration surrounds disputes between a consumer and a supplier of goods of services. Many organisations involved in the commercial world would have introduced arbitration schemes, examples are the Federation of Master Builders (FMB) and the Association of British Travel Agents (ABTA).
Industrial arbitration; One of the best known organisations working in this area is the Arbitration and Conciliation Advisory Service (ACAS). It often finds itself arbitrating between trade unions and employers in industrial disputes.

Tribunals form the largest part of the civil justice system in England and Wales, they hear about 1 million cases each year. Tribunals are specialised bodies, dealing with very limited areas, and that this specialisation must be contrasted with courts of law which have a much wider jurisdiction and hear many kinds of disputes involving different fields of law. The Government sets up administrative tribunals. Their main function is to enforce citizen’s rights to welfare and other social security entitlements. All decisions made by administrative tribunals can be judicially reviewed. Some examples of administrative tribunals include:

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Social Security Appeals Tribunal
Immigration Appeals Tribunal
Mental Health Review Tribunal

The Legatt Report reviewed the present system of tribunals in August 2001. It revealed that the 70 tribunals dealt with over a million cases per year. The Social Security Tribunal was the largest.

Mediation involves an independent third party attempting to find some common ground between two parties in dispute. The mediator acts as a message carrier between the two. Relate is one well known organisation offering a mediation service. Its services are available to any couple considering a legal divorce, or indeed any couple experiencing difficulties in their relationship.

Conciliation involves a neutral third party helping to solve a dispute. The conciliator raises relevant issues and actively suggests appropriate solutions.

1b) There are many advantages and disadvantages of the alternatives mentioned in part a, compared to a claim through the civil courts.

Advantages of arbitration are:

Parties retain more control over arbitration than over a court case, where the control is effectively exercised by lawyers and the judge.
The proceedings are held in private.
Arbitration is usually quicker and cheaper than court proceedings.
The arbitrator is not usually a lawyer but a specialist in the field concerned, who has been trained as an arbitrator.

Disadvantages of arbitration are:

There is no legal aid.
Opportunity to appeal is limited.
There may be difficulty in enforcing awards.
There may be an imbalance between parties, e.g. consumer against company.

Advantages of Tribunal are:

Speed; tribunal cases come to court fairly quickly and many are dealt with in a day.
Cost; tribunals usually do not charge fees, and each party generally pays its own costs, rather than the loser having to pay all. The simpler procedures of tribunals should mean that legal representation is unnecessary and costs will therefore be reduced.
Informality; the strict rules of evidence do not apply and attempts are made to create an unintimidating atmosphere. This is obviously important when individuals are presenting themselves.
Flexibility; they do not operate strict rules of precedent, so are able to respond more flexibly than courts. Very few of their decisions are formally reported.
Specialisation; tribunal members already have expertise in the relevant subject area.
Reduces pressure on courts; without tribunals all ordinary courts would be completely swamped.
Awareness of policy; tribunal members are likely to understand the policy behind legislation in their area.
Privacy; tribunals may in some circumstances, meet in private, so that individuals are not obliged to have their problems aired in public.

Disadvantages of tribunals

Lack of openness; the fact that some tribunals are held in private can lead to suspicion about the fairness of their decisions.
Unavailability of legal aid; full civil legal aid is available for only a couple of tribunals – the Prison Disciplinary Tribunal and the Mental Health Tribunal.
Involvement of interested parties; members of some tribunals are appointed by the minister on whose decisions they have to adjudicate. Although there is no evidence that this results in bias, clearly it is difficult for such tribunals to achieve the appearance of impartiality.
Too complex; a review of tribunal procedures with a view to simplifying matters so that applicants could represent themselves as far as possible; yet, if anything, tribunal procedures have become more legalistic.
Lack of accessibility; the Franks recommendation that tribunals should be ‘open’ requires more than just a rule that hearings should usually be held in public; it also demands that citizens should be aware of tribunals and their right to use them.

Advantages of mediation are:

Lets you - not a judge or jury -develop your own solutions
May offer you a fast resolution to a dispute
May be less expensive than going to court
May mend your relationship with the other parties
Still allows you to go to court if you cannot reach a mutually-acceptable solution

Disadvantages of mediation are: