When someone has a dispute with someone else they can try to resolve the matter via negotiation.
No need for a neutral third party.
Very quick and cheapest option due to no need for paying legal costs.
If can't be decided between them, solicitors can be used to try to negotiate.
CAN go through court but behind closed doors.
This is more expensive - outward labour costs, legal costs.
takes more time. time = money.
can go on for years and then be settled on the day of the hearing.
Other forms of ADR try to avoid this.
A neutral third party mediator comes in to help settle dispute.
Their role is to consult with both parties and find out how much common ground there is between parties.
Mediator wont tell party personal views but will suggest resolutions.
Can be asked for opinion of merits.
Mediation only useful if both parties willing to co-operate. The parties are in charge of this type of ADR; they make the decisions.
FORMALISED SETTLEMENT CONFERENCE - mini trial - both sides state cases to neutral party. After, decision made. If cant be made neutral advisor acts as mediator.
Mediation services - Many companies set up providing mediators for hire. expensive (£1,200 - £3000 a day)
Adv. - not strictly lawful, faster that court, cheap.
Disadv. - no knowledge if dispute will be resolved, parties in control can pull out anytime.
third party plays ACTIVE role, suggesting solutions.
as with mediation; may not lead to certain resolution.
Maybe be necessary to continue with court.
Parties agree to let third party make a BINDING decision without need for court.
Private arbitration governed by Arbitration Act 1996.
Way in which it is carried out is entirely left to the parties.
Parties give cases to third party, after the arbitrator makes a decision that is binding. Think of it as a trial in court procedure with the arbitrator being the judge.
Agreement To Arbitrate
This can be made at anytime between parties.
SCOTT V AVERY CLAUSE - Parties in their original contract agree that in the event of a dispute rising, it will be resolved via arbitration.
When there is such an agreement in contract the Arbitration Act 1996 states that court will not deal with the case. The dispute must be resolved via arbitration.
Certain companies supply trained arbitrators for hire.
Adv.- Flexible, cheaper than court, quicker, dealt in private.
Disadv. - arbitrators can have high fees, rights of appeal are limited, delays are possible.
Section 15 Arbitration Act 1996 - Parties can decide on number of arbitrators to use. If undecided only ONE is used.
Institute of Arbitrators - Provide trained, experienced in the field of the dispute.
Last resort if can agree the court can be asked to appoint a lawyer.
The Arbitration Hearing
Parties decide what type of hearing they would wish.
Paper arbitration - Both parties right down their cases and then send to arbitrator. Arbitrator then makes a decision.
Formal arbitration - Both parties attend the hearing where witnesses can be used as evidence. (Arbitration ACT 1996 allows court procedures to ensure attendance of witnesses) after all evidence and cases heard, arbitrator makes decision.
Date, Time, and Place all decided by the parties.
Allows for flexibility.
This is the decision made by the arbitrator and is binding to the parties.
Can be enforced through courts if necessary.
Decision is final, but can be challenged in courts. (s68 Arbitration ACT 1996)
ADV. & DISADV.
ADV.- Parties can choose the arbitrator.
Private and no publicity.
Quicker resolution than court.
Much cheaper than court.
Award is final and can be challenged.
DISADV.- Unexpected legal point may arise not suitable for arbitrator to decide.
pro. arbitrator = expensive
formal hearings = expensive also.
rights of appeal = limited
delays for commercial and international arbitration can be massive.