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Arbitration after COVID-19: Have we found a vaccine for arbitration?

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Posted by Philip Harris on 04 May 2020

Philip Harris Partner & Solicitor-Advocate

The question supposes that arbitration is sick. In the case of Domestic English Arbitration, it has been ailing for some time. The Arbitration 1996 (“the Act”) is a good statute.  It was meant to cure arbitration in England and Wales. It didn’t.

The Act could not have been clearer and simpler.  Section 1 states the principles of the Act.

Section 1(a) states that the object of arbitration is to obtain a fair resolution of disputes by an impartial tribunal without unnecessary delay or expense.

Section 1(b) states that the parties should be free to agree how their disputes are resolved, subject to such safeguards as are necessary in the public interest. 

So, Section 1 was the cure that the practice or process of arbitration required.

Arbitrations were to be conducted without unnecessary delay or expense and the parties were free to agree how to resolve their disputes.

Putting these principles into practice has not proved easy.

Arbitration had, before the Act, become too much like litigation and too close to Court procedures.

So, when the Act came into force, the existing establishment which practised arbitration previously, interpreted the Act to mean:

“Make the existing practices and procedures a bit faster, reduce some of the huge costs of arbitration and give the parties some choice – except where the arbitration clause and the rules it requires prevents this”.

That was not enough.  It was never going to be enough to save domestic arbitration from public disaffection.  And so domestic arbitration fell into the doldrums.

Then came the Coronavirus.

It is too early to say whether it will change the old order, or whether it is a temporary hiatus, after which we slip back into old ways.

But it is likely to create a lot of issues and problems and differences which will need to be resolved. 

These differences could be resolved quickly and efficiently by a new order of really swift, fast-track dispute resolution through arbitration, as it was meant to be.  That is possible because of the flexibility inherent in the general principles stated in the Act.

So, there is no reason why parties could not agree to arbitrate a whole dispute in a month or, in simple cases in a fortnight.

The process can be done entirely in writing, with an additional telephone hearing, or  a Teams meeting or other form of social media.

The parties could agree that the Award is limited to four pages of A4 paper, with or without reasons, as they prefer.  They could agree that there is no right of appeal or challenge to the Award.  They could agree a limit on the recoverable cost.

They could agree that more than that one dispute is referred to the arbitrator at the same time.

They could agree these things because arbitration gives them that choice.

Even if there is a no arbitration agreement or clause in place, the parties can agree in writing to arbitrate and choose a fast-track procedure.

All that they need is an arbitrator who will be proactive and effective in this brave new world of arbitrations.  The arbitrator can be requested to commit to this approach.

It is not unheard of that one disease is used to cure another.

Let us hope that Covid-19 will provide a vaccine and cure for modern English arbitration.

About the author

Philip Harris

Partner & Solicitor-Advocate

Philip has 30 years’ experience as a construction solicitor and advises on all aspects of construction law.

Philip Harris

Philip has 30 years’ experience as a construction solicitor and advises on all aspects of construction law.

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