Understanding the Arbitration Process

  • Dispute Resolution
Arbitration
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Peninsula Group, HR and Health & Safety Experts

(Last updated )

Read how arbitration procedures can help you with employment disputes. And why you should choose it over other alternative dispute resolutions.

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Disputes in the workplace can often be resolved outside of the courtroom. By doing so, an employer can save time and resources for their business. 

Arbitration is arguably a  most favoured form. The entire process is generally cheaper, less formal, and more flexible than other resolution processes. Compared to litigation in courts, arbitration awards are generally actioned faster. Making it one of the most preferred alternative dispute resolutions.

We’ll look at how both the employer and employee solve their grievances through arbitration proceedings. We can also show why you should choose arbitration over other ADR methods.

What is arbitration?

Arbitration is a form of alternative dispute resolution. It involves an impartial third party who decides on a conclusion.

The main aims for arbitration are unbiased conclusions and independence from judicial courts. Compared to other forms of ADRs (like mediation, conciliation, and negotiation), arbitration is widely favourable. 

The Arbitration Act 1996 regulates arbitration in the UK and allows arbitrators to conduct hearings. Arbitration can settle disputes in employment, trade unions, or for individual disputes.

In recent years, businesses have applied mandatory arbitration within dispute resolution policies.

We can define arbitration as:

The role of the arbitrator

Once an arbitration submission is processed, neither party can withdraw. Both must nominate an arbitrator to judge the procedure. The arbitrator should be impartial and have no professional or personal connections with anyone.

They will hear both sides of the dispute at a hearing or ‘arbitral tribunal’ and encourage collaborative communication. In the end, they will pass a final decision for the dispute.

Even though an arbitrator does not need specific qualifications, they should have some legal knowledge on proceedings and technical matters.

Arbitral hearing

The arbitral hearing can operate with either one arbitrator or as a panel of three. Any decisions made by the arbitrator are legally binding (similar to judicial passing).

Before the hearing, both parties should send their written statements to each other, and to the arbitrator. This ensures that everyone involved has access to all supporting documents. 

During the hearing, the arbitrator will ask each side to state their case, allowing each side to: 

Once the hearing has ended, the arbitrator will document their ‘award’. Neither party may reject the award once it is written. Arbitration law states that the process is not legally binding but is ‘binding in honour’.

Advantages and disadvantages of arbitration

You should choose arbitration methods over alternative dispute resolutions because of:

Despite being a more favoured process, the disadvantages for arbitration can present barriers.

Adjudication vs arbitration

We often refer to adjudication as a “pay now, argue later” procedure. Adjudication is normally used to settle construction disputes. For example, it can protect against payment withheld between businesses. Or to challenge difficult construction clauses.  

The difference between arbitration and adjudication   

The main differences between arbitration, mediation, and litigation procedures

The main difference between mediation and arbitration is that an arbitrator hears evidence given by both parties and decide. In a mediation proceeding, the decision is negotiated between both parties with the assistance of the mediator. 

Litigations is chosen for more consequential disputes. Like contract breaches, harassment, and whistleblowing. That’s why such disputes are discussed in a court setting, rather than through some ADR methods.

Mediation vs Arbitration

Litigation vs Arbitration

Get expert advice on arbitration  with Peninsula

It’s important to have the best policy for settling disputes in the workplace. Having a strong arbitration business policy can minimise effects on business productivity and concentrate on workforce wellbeing.

Our team can help you with workplace disputes and arbitration proceedings that fit your business. Our document specialists can also provide guidance on how to write a letter of arbitration for dispute settlements.

Peninsula clients get access to 24/7 HR consultation with our employment specialist. And if you’re not yet a client, you can still enjoy free advice from one of our business experts. Simply call us on 0800 028 2420.

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