There’s a movement afoot in Scottish arbitration, and the mood is spreading south of the border. The demands are simple: total arbitration revolution

This LinkedIn, Twitter, Facebook thingy is huge, ask anyone: Jemima Khan, President Gaddafi, Assad, Mubarak, Scotland. Scotland? Oh yes. The constructors and dispute-o-folk are stirring up a Scottish Arbitration Spring. My LinkedIn inbox is bursting with enthusiastic campaigners, street marchers, placard-wavers. Scotland has a new Arbitration Act. And Scotland’s constructors are stamping their feet; they want to use it. But …

I have plucked some of the “buts” from the LinkedIn message board. “Arbitration clauses have been omitted from building contract documents as the next step from adjudication.” “The punters lost confidence in arbitration.” “Arbitration becomes litigation in suits.” “Confidence in arbitration collapsed because the old arbitration acts were inadequate.” “Too expensive”. “Arbitration needs mouth-to-mouth resuscitation.”

Now then, the number of people I am willing to give mouth-to-mouth to is severely limited. And far be it from me to point a well-aimed toe at my Scottish friends. I can tell them something about what we are doing in the southern part of the United Kingdom. We too are revolting (as in making revolution). Our tool is the 1996 Arbitration Act.
Our first protest placard shouts at the contract document compilers - the JCT folk and others. Put the arbitration clause back in the document. There are umpteen types of building construction disputes that ought not be adjudicated, ought not be litigated, ought not be mediated, ought to be arbitrated.

Second placard shouts at the lawyers: stop trying to litigate when the mechanism is arbitration. When you litigate it’s damn expensive. When you inject all your training, your mentality, your habits and rigmarole of litigation into arbitration, you spend masses of money needlessly.

Third placard shouts at arbitrators: stop being wimps. Start using the Arbitration Act to do it differently. Arbitration is not litigation. Stand up to the lawyers who will bully you to adopt litigation procedures.

Fourth placard shouts at the institutions, such as the Chartered Institute of Arbitrators, to support and encourage the innovative arbitrators. Stop putting the arbiters in fear of institutional heavy-handedness.

Fifth placard. Make arbitration cheap, fast and commercial. Put the running of the arbitration into construction hands. Come on, lawyers, don’t make a mountain out of
a molehill.

Here is an up-and-running arbitration system. I like it. It is for those damned awkward small disputes of no more than £25,000 a row.

  • The arbitrator’s fixed fee is £4,000.
  • The appointing body is the Arbitration Board. There is no fee charged to appoint an abitrator.
  • Neither party may be represented by lawyers nor any other person. Only the parties themselves may take part.
  • The arbitrator’s fee is payable 50/50 in advance. There will be no allocation of fee nor award of any other costs.
  • The arbitrator will be the master of procedure.
  • The arbitrator will decide his own jurisdiction and scope of arbitration.
  • The arbitrator may make a provisional award of any relief that he would have the power to grant in the final award, such as interim payment on account.
  • The arbitrator will reach binding and non-appealable decisions.
  • The arbitrator’s decisions will not contain reasons.
  • The Arbitration Act 1996 will apply.

OK, OK, some of you lawyers and dispute consultants will bridle at being shut out.

The English Arbitration Act 1996 allows that to happen. The point, of course, is proportionality of costs. Moreover, the process is intended at this level to be for the arbitrator simply to listen to the arguing parties and decide their case. As to the arbiter, yes this person has to be robust and fear free. And if you dare suggest that my Scottish arbiter friends are not robust and fear free, well I shall eat my Tam o’Shanter.


Source: Simone Lea

Tony Bingham is a barrister and arbitrator at 3 Paper Buildings Temple.

Follow Tony on Twitter @TonyBingham2