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Arbitration regains its rightful role

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paul hyett

In the Middle Ages justice could only be obtained outside the feudal system by going before a judge. But it wasn't easy. Judges were peripatetic: that is, they slowly advanced around their circuits, bringing justice only to the particular parts of the land that they visited. The delay between court visits could be great, and trial costs were enormous.

This kind of justice was totally unsuited to trade, most of which was conducted at fairs and markets. King Edward V therefore granted a number of charters for private or 'vagabond' courts, the most famous being the Court of Pie Powder (from the French pieds poudreux - dusty feet) which was regularly held at a fair near Winchester. Vagabond courts offered swift decisions; but the chance of a correct decision - or even a fair one - was lessened.

Arbitrations grew out of these rough-and-ready tribunals. The 'judge' was a private person and an expert in the subject matter. He was hired for the task and paid to keep his mouth shut over his decision: arbitration was a commercial business that allowed disputes to be sorted out once and for all - quickly, cheaply, and in private. Was the decision as accurate as a judge's? Possibly not, but high justice was no match for speed and simplicity; and that was what counted.

Arbitrations have a long pedigree, but, as with everything involving risk, the tendency has been gradually to make them safer. This has involved the introduction of less rugged procedures, the effect of which has been to lessen, of course, the very attributes that made them attractive in the first place. Arbitration and court practices have, in consequence, converged, so that until recently the complaints have been that arbitrations take as long as the courts, that they are as expensive if not more so, and that privacy is a sham.

This downhill slide was only stopped by the publication of the 1996 Arbitration Act, widely acclaimed for putting arbitrations back where they belong: four-square into the domain of trade and commerce.

Under the new provisions, properly conducted arbitrations with capped costs should now be subject to disciplined case management and economy. Cases costing umpteen times as much as the amounts in dispute should become a thing of the past, and arbitration will therefore once again be able to claim its traditional advantages over litigation!

Meanwhile, in keeping with the changes in the law, through his Arbitration Advisory Committee at the riba, President David Rock has been pruning his list of arbitrators to a core of the best, and rejuvenating the service with the introduction of new blood.

But a word of warning in this age of cost-cutting and streamlining: the riba should resist any temptation to 'out-source' this service! Let's not forget: when trouble comes it's much better to have it sorted out by an individual that both parties fully trust rather than by an arbitrator lacking in appropriate expertise.

The riba has an important role to maintain in this field, and you should take the opportunity, when you prepare a building contract or make out a form of appointment, to make sure that it is the president or a vice- president of the riba who is nominated to appoint the arbitrator. Think about it - a lot could ride on that decision!

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