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Arbitration is a form of binding, private litigation, where the parties confer the power to determine a dispute on a legal expert. The advantages of arbitration include

  • arbitration is faster and more flexible than court or tribunal based litigation;
  • parties are able to choose who will act as the arbitrator, rather than having the tribunal presented to them;
  • arbitration is conducted in private, so that decisions are not in the public domain and remain confidential;
  • the parties have control over how the arbitration is to be conducted and can agree in advance how the process will work;
  • as the process is flexible and focussed on the particular dispute, arbitration can often be cheaper than court or tribunal based litigation;
  • decisions are legally binding and enforceable in court.

Arbitration would be particularly well-suited to disputes on compensation for compulsory purchase and injurious affection and in particular the determination of key issues in dispute such as an issue of law or of valuation principle. Further information on the kinds of disputes which would be suitable for arbitration is given above.

An arbitrator’s jurisdiction comes from an agreement between the parties.
An arbitrator’s decision is binding on the parties and can be enforced just like a court judgment.

The conduct of arbitrations is governed by the Arbitration Act 1996. The 1996 Act supports the conduct of the arbitration, providing for limited supervision by the courts, appeals on points of law, and enforcement of awards. An arbitrator is under a duty to act fairly and impartially, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent. If the parties wish, an arbitrator is able to take the initiative in ascertaining the facts and the law.

Usually there is a sole arbitrator, but it is possible to have a panel of arbitrators. It is also possible for the arbitrator to have assistance from an assessor, usually an expert in a particular discipline, such as valuation.

Arbitrations can be conducted on a documents only basis. Hearings can be held, ranging from short hearings to make oral submissions on points of law through to full hearings akin to litigation. Parties are able to agree how their dispute should be dealt with and how formal or informal the process should be.

Once an arbitration agreement is in place, the dispute would be submitted to arbitration by a reference from the parties. The dispute could be anything the parties wished to have determined, from a particular point or set of points of law or principle, through to an entire dispute including quantum.

Where land is acquired by agreement (including under threat of compulsory purchase), but where the purchase price cannot be agreed, the agreement could provide for the price to be determined by arbitration.

An arbitration can be conducted in accordance with a published set of procedural rules. Using published rules provides more certainty about how the arbitration is going to be conducted. Alternatively, parties might prefer to have the process tailored to their particular case, by way of case specific directions from the arbitrator, setting out how the case is to be handled.

As well as arbitration, there are two other dispute resolution methods which can be used as alternatives: neutral evaluation and expert determination.