A survey out this week shows that half of the multinational companies that use arbitration to settle disputes have been disappointed by the arbitrator’s performance.
The faults cited in the research, by Queen Mary University of London, included bad decisions, lack of independence, bias, delays and excessive fees. Clearly client satisfaction is not all it could be.
But these international arbitrators – often lawyers and judges but sometimes construction professionals - are experts in their field. Only last week our regular legal columnist Tony Bingham was singing their praises and calling for standard forms of contract to bring back arbitration clauses so it becomes the main “forum” for resolving disputes.
The reasons so many companies opt for arbitration are that it’s perceived as quicker and cheaper than going to court, and crucially disputes can be resolved in private. The survey found 62% said confidentiality is very important to them. Of course, you need to have confidentiality clause to ensure privacy and that ceases if a decision is appealed.
So what’s to be done? Clearly there’s a demand for arbitration and the users of the system have backed an interesting idea in the survey: parties should be able to assess their arbitrator. And if that feedback was made public, as 30% of respondents thought it should, we might see arbitrators up their game and the satisfaction levels among businesses rise.
Whatever the solution, the debate over when arbitration is most appropriate to resolve disputes is sure to continue. And you’ll find the debate in full swing in the legal pages of Building magazine – check out the 5th November edition in which Olswang’s Nick Lane argues against Tony Bingham’s call to put back arbitration clauses in standard forms.