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Key facts and statistics
- The Arbitration Act 1996 came into force on 31 January 1997.
- This applies to England, Wales, and Northern Ireland, with Scotland having its own separate arbitration legislation.
- Arbitration is generally faster and less costly than litigation. A 2018 London Court of International Arbitration (LCIA) study found that the average duration of arbitration proceedings was 16 months compared to several years for court cases.
- The Act is widely used to resolve commercial and contractual disputes across various sectors, including construction, finance, and healthcare.
Key definitions
- Arbitration - A private dispute resolution process where the parties agree to submit their disputes to one or more arbitrators who make a binding decision.
- Arbitrator - An independent third party appointed to resolve a dispute through arbitration.
- Arbitral award - The final decision made by an arbitrator or arbitration panel binding on the parties involved.
Importance of the Arbitration Act 1996
The Arbitration Act 1996 is crucial for several reasons:
- Efficiency - It streamlines the dispute resolution process, reducing the burden on the judicial system and allowing parties to resolve issues more swiftly.
- Confidentiality - Unlike court cases, arbitration proceedings are private, protecting sensitive information from public disclosure.
- Expertise - Parties can choose arbitrators with specific expertise relevant to their dispute, ensuring informed and appropriate resolutions.
Best practices for implementing the Arbitration Act 1996
To effectively implement the Arbitration Act 1996, organisations should consider the following best practices:
- Incorporate arbitration clauses in contracts - Ensure all commercial contracts include a well-drafted arbitration clause specifying the arbitration process, governing law, and the seat of arbitration.
- Choose qualified arbitrators - Select arbitrators with the appropriate expertise and experience relevant to the dispute.
- Maintain detailed records - Keep comprehensive documentation of all agreements, communications, and proceedings related to the arbitration.
- Educate and train staff - Ensure that all relevant personnel understand the arbitration process and their roles within it. This includes training on how to draft effective arbitration clauses and manage arbitration proceedings.
- Utilise compliance software - Implement compliance management tools like ComplyPlus™ to monitor and ensure adherence to arbitration agreements and relevant legislation.
Recommended best practices
- Draft clear arbitration clauses - Ambiguity in arbitration clauses can lead to disputes over the arbitration process. Clear, precise language helps prevent this.
- Select the right arbitrators - Choosing arbitrators with relevant expertise can significantly impact the outcome of the arbitration.
- Regular training and updates - Regularly update staff on changes in arbitration law and best practices, ensuring they are prepared to handle disputes effectively.
Conclusion
The Arbitration Act 1996 remains vital for resolving disputes efficiently and effectively across various sectors. By understanding the key aspects of this legislation and implementing best practices, organisations can enhance their dispute resolution processes and maintain compliance.
Ensure your organisation is fully compliant and prepared to handle disputes efficiently. Click here to learn more about ComplyPlus™ and our extensive range of training courses designed to keep your business ahead of the curve in regulatory compliance.
About the author
Dr Richard Dune
With over 20 years of experience, Richard blends a rich background in NHS, the private sector, academia, and research settings. His forte lies in clinical R&D, advancing healthcare tech, workforce development and governance. His leadership ensures regulatory compliance and innovation align seamlessly.
