£250m legal dispute market is 'up for grabs'

A SENIOR lawyer has called on the Scottish Government to write arbitration clauses into all its new contracts in order to help Scotland grab a share of the lucrative international dispute resolution market.

Brandon Nolan said rules insisting on arbitration before litigation involving major infrastructure projects such as new Forth road bridge could help to promote Scotland to global companies.

Nolan, who is chairman of the Scottish branch of the Chartered Institute of Arbitrators, said the institute – along with the Law Society of Scotland and Faculty of Advocates – would be working to make Scotland a "a seat for arbitration", attracting firms north of the Border to resolve their contract disputes.

Nolan said Scotland was well-placed to compete with London – and grab a share of the 250 million spent on arbitration in the city each year – following the introduction of the Arbitration (Scotland) Act, which comes into force tomorrow.

The Act replaces 300-year-old legislation and subsequent case law and is designed to make arbitration more attractive by limiting costs and giving firms the options not to "air their dirty washing" in more formal court proceedings.

Nolan, who is also a senior partner at "big four" law firm McGrigors, told Scotland on Sunday: "The institute's branches overseas tell me that this Act has received plaudits from various bodies around the world and is seen as the best model for how to structure arbitration provisions.

"We will do everything we can to promote Scotland as a seat for arbitration but we need the Scottish Government to embrace the Act by putting arbitration clauses into its contracts and agreements so that it will lead the way."

One of the founding principles of the Act is for arbitration to proceed without "unnecessary delay or expense", which Nolan believes will appeal to businesses.

He said arbitration had been popular, particularly in the construction industry, in the past but had fallen by the wayside due to previous uncertainties in the law and the rise of other forms of dispute resolution, such as adjudication and mediation.

Lindy Patterson, head of construction and engineering at law firm Dundas & Wilson, said it wasn't just London with which Scotland could now compete.

"We can attract business from Europe and from renown arbitration centres such as Hong Kong, Kuala Lumpur and Singapore," she said.

"Arbitration services are the fifth highest earning of 'invisible earnings' in the City of London so we're delighted that Scotland can now compete on an equal footing."

A Scottish Government spokeswoman said it was in the process of updating its use of contract clauses, adding: "The Scottish Government is committed to developing Scotland's capacity to offer arbitration in all kinds of dispute where it would be of benefit."