Arbitration might sound grand and corporate, but in the UK it’s far more common than most people realise.
What is an arbitration clause?
Did you know many contracts include an arbitration clause tucked away in the small print? From construction agreements to shareholder deals, it’s often written that if a dispute arises, the parties won’t head straight to court. Instead, they’ll resolve things privately through arbitration.
It’s usually confidential
Unlike court cases, which can be public and reported on, arbitration hearings tend to stay behind closed doors. For businesses keen to avoid unwanted publicity, that’s a huge plus. You also don’t get judged. Instead, an arbitrator is appointed. This is often a senior barrister, solicitor or expert. In technical disputes, such as engineering or shipping, that specialist knowledge can be invaluable. UK litigation funding can help claimants pursue cases they otherwise couldn’t afford. UK litigation funding has grown rapidly over the past decade.
It’s also more flexible than court
The parties can agree where the hearing takes place. They can also decide how formal it will be. That can make the process feel more efficient. It’s important to remember that the words dispute and litigation are often used interchangeably. Yet, although they are related, the two terms cover different legal concepts.
But don’t be fooled into thinking it’s informal or optional
The arbitrator’s decision, known as an award, is usually binding and enforceable under UK law. Once it’s made, it carries weight. Arbitration isn’t just for corporations. Small and medium-sized businesses use it too, particularly in commercial disputes.