Arbitration is a private procedure for resolving disputes in which the parties agree to be bound by the decision of an independent third party, the arbitrator. The arbitrator’s role is similar to that of a judge, although the procedure can be less formal and the arbitrator is often an expert in the subject matter of the dispute.
In England, Wales and Northern Ireland arbitration is governed by the Arbitration Act 1996. Arbitration can only be used where the parties have agreed to it, usually through an arbitration clause in the contract. Many standard construction contracts let the parties choose between arbitration and litigation as the final method of resolving disputes. Unlike an adjudicator’s decision, an arbitrator’s award is final and binding, with only limited grounds for challenge in the courts.
- Proceedings and the award are generally confidential, which some parties prefer.
- The parties can choose an arbitrator with technical or QS expertise.
Related terms: adjudication, litigation, mediation, dispute resolution.
