The recently published Arbitration (Scotland) Bill attempts to:
- clarify and consolidate Scottish arbitration law, filling in any gaps that exist
- provide a statutory default framework for arbitrations
- ensure fairness and impartiality in the process
- minimise expense and increase efficiency
Arbitration is a procedure where parties agree to submit a dispute between them to a third party, who often has special expertise or knowledge, who then acts as a private tribunal to produce a final and binding determination of the dispute (which is a difference between arbitration and mediation).
By agreeing to go to arbitration, the parties voluntarily deny themselves recourse to the courts or to another method of alternative dispute resolution. The agreement to go to arbitration is often contained in a contract concluded between the parties possibly years before they come into dispute. It is expected that arbitration will continue to be mainly used in the commercial sphere.
Businesses may prefer to pay for an arbitrator to resolve a dispute (over money or standard of goods or service) due to commercial pressures or they may not want to wait for resolution in the courts due to the expense but also the delay that may involve. The confidentiality of proceedings offered by arbitration may be another reason to use arbitration, rather than the public forum of court.
The expertise of the arbitrator (who may be a technical expert) and the flexibility of the process are also cited as advantages of arbitration over dispute resolution in court.
Arbitration is often the method of dispute resolution of choice in property disputes, and is often cited as the method in commercial leases. There may be scope for more use of arbitration in other areas such as the maintenance of property, the management of blocks of flats and service charges. |
