Trade wigs, gowns for a shirtsleeve legal alternative

Published on 06/06/2010 23:08

TODAY is truly a great day in Scots legal and commercial history, the day on which the Arbitration (Scotland) Act 2010 has come into force.

Arbitration, potentially the quickest and least expensive route to a binding decision in civil disputes, has been reborn in Scotland.

Parties have always been entitled to have civil disputes decided by an arbitrator rather than a court, but still have the court recognise and enforce the arbitral decision.

Arbitration has declined in recent years because of many inadequacies in the pre-2010 law, which lacked certain essential features and contained serious anomalies.

Arbitration was seen as unresponsive to the needs of the business user who would have had great difficulty in even finding out what the rules of arbitration were, buried in law sometimes dating back centuries.

Scotland now possesses world-beating arbitral legislation, which has already attracted high praise internationally for the quality of its drafting, its innovative and user-friendly structure, the depth of detail of its research and coverage and its carefully balanced relationship between courts and arbitrator .

The act is easy to read, structured to assist the business user and, most importantly, not only empowering but obliging the arbitrator to "get on with the job" without unnecessary delay or expense.

As is the worldwide norm, the role of the courts is restricted to the minimum necessary to assist the arbitrator or ensure they do not overstep the mark.

For example, the court can (where no arbitrator can) compel witnesses to attend the arbitration to give evidence.It can remove the arbitrator or overturn arbitral awards, but only in a limited range of circumstances.

The business community made it clear that they do not want to arbitrate and litigate in tandem. The act gives them the clear separation of arbitration and litigation which that entails.

A key foundation underlying the act is the extensive research into arbitral law and procedures around the world carried out by the Chartered Institute of Arbitrators (CIArb) Scottish Branch through the CIArb's worldwide network of approximately 12,000 members in more than 105 countries. Few other countries have researched and consulted so widely before enacting an arbitration law.

Why arbitrate? The arbitral process is flexible and can be tailored to the specific needs of the case and the wishes of the parties. The arbitrator can be a specialist in the area of dispute, eg an expert in construction, oil/gas/energy, property/rent review etc. Arbitration can be a much-less expensive, much quicker and more accessible route to a fair and binding decision.

Proceedings can take place anywhere the parties agree, such as in Applecross, Barra or Duns, and in private. It can be a more user-friendly process. For example, in a case concerning a dispute over a house extension, the arbitration could easily be held in the house, in a shirtsleeve environment around the kitchen table, a far cry from the wigs and gowns of a courtroom.

In parallel with the coming into force of the act, the CIArb Scottish Branch has published a set of arbitration rules, the Scottish Short Form Arbitration Rules. These are wholly consistent with the act, but offer parties a greatly simplified procedure designed to be read and used by non-lawyers, especially proprietors of smaller businesses or even sole traders.

The potential benefits to Scotland do not end there. The act has been carefully drafted with an eye to the market for international arbitration. It not only incorporates the best ideas from around the world, but also builds upon Scotland's global reputation as a centre of legal and judicial excellence.

John Campbell QC, a past president of the CIArb and himself involved in developing the act, said: "After more than a decade of hard work, the passage of the act brings enormous credit to the officials and Ministers who have supported our efforts to bring this extraordinarily powerful and effective tool to Scotland's business and other communities. They must be heartily congratulated."

Brandon Nolan, CIArb Scottish Branch chairman, added:

"The new act provides a great springboard for using arbitration as means of determining disputes, the process of, and the CIArb Scottish Branch fully intends vigorously to promote arbitration in Scotland, both domestically and also with the aim of attracting international arbitrations to Scotland."

&#149 Arbitration (Scotland) Act 2010 by Professor Fraser Davidson, Hew R Dundas and David Bartos, is out now, published by W Green & Co.