Legal Guides

We use plain and simple English to give you an overview of the most common areas of law.

Arbitration in a nutshell

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Arbitration is the most formal form of Alternative Dispute Resolution (ADR). It’s where you and the other party agree to put forward your case to an independent third party who is experienced in the area, and most importantly, whose decision each of you will agree to be legally bound by. It’s sounding very formal already.

An arbitrator will usually be a member of the Chartered Institute of Arbitrators. They will come to a decision based on written evidence supplied by both you and the other party.

If it turns out that you and the other party can’t even agree on an arbitrator, it’s possible to ask the President of the Law Society to appoint an independent arbitrator.

There can be both benefits and risks in using any Alternative Dispute Resolution, or ADRs (as we like to call them):

The benefits:

Unlike other forms of ADR, Arbitration is legally binding on you and the other party. The arbitrator will make a formal legally binding judgment. This is serious stuff.

Arbitration on a large scale is not too dissimilar from court proceedings and is therefore primarily constructive in resolving disputes multi-nationally. You and the other party contractually agree to refer disputes to Arbitration for a legally binding decision.

Held privately, Arbitrations can follow set procedures governed by the arbitrator when an agreement between you and the other party has been reached, or alternatively can follow rules set by official bodies such as the International Chamber of Commerce.

The risks:

Arbitration will result in a legally binding decision that cannot be rejected, so there is no ability to take the matter to court if you don’t like the outcome.

The cost; the arbitrator and solicitor – which can be an unknown amount when setting off along this path.

How much does it cost exactly?

Most Arbitration schemes charge a fee. These range from a relatively low cost of £108 to a very high cost for an experienced arbitrator relating to commercial disputes. Don’t forget, you will also have the fees of your solicitor to consider.

What next?

Let’s start at the beginning. It’s important that you don’t simply choose the first, or the cheapest solicitor you can find. Choose one who will truly look after you and act in your best interests.

A good place to start is by asking friends, colleagues and family for personal recommendations. Settle on a lawyer who you feel totally comfortable with.

Most important of all, go and meet them face-to-face. Tell them your circumstances and listen to what they have to say. There are a good number of excellent lawyers specialising in Arbitration who will give you sound, realistic advice.

DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances. This article is merely a general comment on the relevant topic.

Published on 25th January 2013
(Last updated 14th July 2023)