If you find yourself in a dispute, you may be debating the best way to deal with it. Do you go down the arbitration route or is litigation the best way for you to go? Before you decide, St Helens Law has looked at each option and what they may mean for you.
What is arbitration?
As a form of dispute resolution and an alternative to conventional litigation, arbitration is a private method where parties agree their dispute will be heard and ruled upon by an arbitrator – a neutral party with no interest in either party, such as a solicitor – and not in the courts.
Similar in requirements and procedure to a trial, anyone can use arbitration to resolve a dispute – whereas litigation is reserved only for those where the dispute has occurred within the jurisdiction of England and Wales. The Arbitration Act 1996 governs the conduct of arbitrations within England, Wales and Northern Ireland – Scotland has its own rules, governed by the Law Reform (Miscellaneous Provisions)(Scotland) Act 1990.
This allows the parties in dispute the time and space to put forward their case and answer questions posed by opponents. The Arbitration Act also allows for other procedures to be adopted, suitable for the circumstances, to avoid unnecessary delay or expense, and provides fair means to resolve the dispute.
Arbitration can be carried out virtually anywhere and sometimes, it’s even possible for a decision to be made based on submitted paperwork, without the need for a face-to-face meeting.
There are a number of different disputes that can be resolved via arbitration, including:
- Business disputes
- Consumer transactions
- Boundary disputes
- Tortious claims – otherwise known as a tort claim (claim for damages)
There are also several cases that cannot be resolved through arbitration such as matrimonial matters, industrial disputes and revenue cases.
If you’re still unsure, there are many benefits of choosing arbitration over litigation.
Benefits of arbitration
- Arbitration is less complicated than litigation, resulting in quicker resolution
- It’s easier to schedule than litigation, as courts typically have long waiting lists for cases to be heard
- It is kept out of public record whereas general members of the public can attend court proceedings
- Arbitration benefits from impartiality as both parties can pick the person to act as the arbitrator
- Usually, arbitration is less expensive than litigation, although it’s important to note that sometimes this isn’t the case
- Arbitration provides finality to both parties, as there are very limited opportunities for appeal
Disadvantages of arbitration
- Arbitration requires good faith and agreement by both parties, which isn’t always easy
- Sometimes it can be cheaper to undertake litigation if the arbitrator’s fee is more than the amount of money involved in the dispute
- If the arbitrator receives witness statements to be read out, there is no opportunity for either party to cross-examine that witness, so their word is final
What is litigation?
Resulting in the court imposing a binding judgment on parties, litigation is the process of taking a case to a court of law so that a judgment can be made. Usually advised as a last resort, litigation is more time-consuming and formal than arbitration – as well as being more expensive, most of the time.
Governed by the Civil Procedure Rules (CPR), litigation involves two parties trying to prove their case before a judge – on the balance of probabilities. Whilst CPR must be complied with, rules can vary depending on the type of case being tried as well as the value of the claim.
There are a number of cases that are best suited to the litigation process, including:
- Personal injury tort claims
- Class action suits, such as medical negligence
- Divorce and other family law disputes
- Disputes regarding property
- Contract disputes
Advantages of litigation
There are a number of benefits of choosing litigation over arbitration:
- As it is conducted through the courts, there is a public record of the case, so can never be disputed
- Litigation delivers a clear outcome that cannot be misconstrued by either party, or by members of the public
- Litigation court mandates both parties to be cooperative, whereas arbitration does not have that power
- Previous litigations can have resulted in precedents, which makes it easier for cases to be ruled upon when similar, future litigation cases arise, as a precedent has already been set
- There is the option of appealing the decision set down in litigation, so there’s another chance of having the dispute ruled in your favour
Disadvantages of litigation
There are also some disadvantages to undertaking litigation:
- You can more than likely expect a backlog when waiting for a court date as there are a large number of court cases waiting to be heard in the UK currently – which has arisen due to the Covid-19 pandemic
- Following on from this, litigation can be time-consuming and sometimes it can take several years between bringing a dispute to court, reaching a resolution and having judgment passed
- Relationships between the two parties in dispute can be irrevocably damaged by appearing in court
- Court cases can cause the parties to be both emotionally and physically draining
Both arbitration and litigation are powerful tools when it comes to resolving a dispute you may have with another party. But you must always carry out your own research, to make sure you are doing the right thing for yourself and your family.
If you need any advice on whether to choose arbitration or litigation, then don’t hesitate to get in touch with us here at St Helens Law to speak to one of our legal experts. You can contact us on 01744 742360, email us at email@example.com or tweet us @StHelensLaw.