Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

If there has been a breach of contract or there is a tortious issue in construction proceedings (i.e. professional negligence) then the innocent party will normally wish to commence proceedings to obtain a remedy for any loss they have suffered as a result. There are numerous means through which construction disputes can be resolved – two of the principles means are, however, litigation through Her Majesty’s Court and Tribunal Service (HMCTS) or arbitration. Arbitration is a private forum in which an independent contractor is contracted to make a decision on the dispute. The outcome of the arbitration process is binding and final on both parties. Both litigation and arbitration have their various advantages and disadvantages. This post will therefore look at these relative advantages and disadvantages and examine the circumstances in which it may be appropriate to issue a claim in one forum rather than the other.

The first thing to consider in an examination of whether litigation or arbitration is appropriate is whether there is an “arbitration clause” in the contract between the parties engaged in the dispute. If there is such a clause then the parties must use the arbitration process rather than litigate through the courts, unless they agree otherwise. If there is no “arbitration clause” then the parties are free to choose which method they deem suitable in the circumstances. Should an “arbitration clause” exist then if one party attempts to issue in Court rather than resort to arbitration the other party can make an application to stay the claim so that arbitration can take place. Under s.9 of the Arbitration Act 1996 the Court must stay the process if it is satisfied that there is such an “arbitration clause” (if specific circumstances do not exist that prevent the matter being stayed).

Secondly, it is difficult to make a direct comparison between arbitration and litigation as there are many forms of arbitration. The form of arbitration appropriate in the circumstances will therefore change the relative advantages or disadvantages of both processes.

The advantages and disadvantages of both are discussed below:

Cost

Litigation can be an expensive process. Lawyer’s fees, court fees, and expert witness reports can quickly rack up the costs – not to mention the cost of a trial itself. Arbitration can potentially offer a cheaper way of resolving a legal dispute, for example in a short informal process without a formal hearing. However, if the matter is complex then it can potentially be far more expensive than the court process as the parties must pay for the arbitrator’s time and hiring the venue.

Speed

Litigation can potentially be a laborious, time-consuming and elongated process, particularly in factually complex cases. Arbitration offers a potentially quicker means of resolving a construction dispute. However, whether it is in fact quicker depends upon the particular facts of the case, the willingness of the parties to adhere the set timetable, and the character of the arbitrator. If the parties regularly miss deadlines and the arbitrator is unwilling to take measures to enforce compliance then it can unnecessarily elongate the process. Judges are generally more likely to be ruthless in enforcing case timetables through the case management process.

Complexity

Arbitration is suitable for construction disputes that are more technically complex as the arbitrator will (normally) be extremely experienced and have the requisite technical qualifications to make a considered decision. A Judge may not possess the necessary skill to make decisions of fact in the circumstances (although Judges in the TCC do have plenty of experience in sitting on construction disputes).

However, where disputes do turn on a point of law rather than an issue of technical expertise then it may be preferable to have the matter determined by a legally qualified Judge.

Decisiveness

It is a common perception (justified or not) that arbitrators tend to “split the difference” in cases rather than coming to a more “extreme” conclusion. If your client therefore believes that they are 100% justified in their case it may be preferable to pursue the matter through the normal Court process than through arbitration.

Joining 3rd parties

In arbitration, only the parties to the relevant contract are bound in the event of a legal dispute (although some construction contracts – e.g. JCT SBC 05 – do include provisions for enabling proceedings to be joined).

Convenience

Arbitration can be arranged to be convenient for both parties – for example holding hearings at the weekend or in the evenings. However, this convenience is often nullified if there are lawyers and experts working for both parties. Convenience is therefore only really of relevance in simple construction disputes.

Privacy

It is not easy to avoid publicity in large commercial arbitrations. However, litigation is likely to involve a greater risk of publicity, adverse or otherwise. Arbitration generally therefore is the better option if parties wish to keep their dispute private.

Expediency

Arbitration is generally less confrontational than litigation. If the parties have a continuing contractual (or otherwise professional) relationship then it will be preferable to resolve the construction dispute without further acrimony.

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

Leave a Reply

Your email address will not be published. Required fields are marked *

 

Our awards

Request a callback

Your name

Your email

Your telephone number

Contact us

Please feel free to discuss your own position and concerns. Contact your nearest office on:

T: 020 3397 3603
E: enquiries@redmans.co.uk
W: www.redmans.co.uk

Testimonials

4.73 Average

92 Reviews

Anonymous

Redmans Solicitors provided a professional and prompt service in dealing with my settlement agreement. They used their experience to negotiate a better deal for which I am grateful for. I highly recommend their services.

Posted 5 hours ago

Cheryl R

Very efficient and friendly lawyers. I have used Redmans twice now and Chris Hadrill has been amazing to work with. Would highly recommend Redmans.

Posted 5 hours ago

Anonymous

I found Redmans Solicitors to be extremely professional, dealing with my questions and concerns quickly and in detail. I would have no hesitation in recommending Redmans Solicitors to anyone.

Posted 7 hours ago

Anonymous

I requested Redmans services on a redundancy case. Both Chris and Rana were great, thoughtful, very professional and responded quickly. They were very clear throughout the entire process, regarding the process and my options and I couldn't feel I had better legal advice for my case. Overall excellent service and I would certainly recommend and use their services again.

Posted 3 days ago

Anonymous

Responsive, patient, thorough and personable - an excellent service.

Posted 1 week ago

Anonymous

The team at Redmans, Chris Hadrill and Sacha Barrett were always very helpful and had expert knowledge to assist me during my employment law matter, I would not hesitate to recommend them to all!

Posted 1 week ago

Arun T

Chris was punctual, attentive and accurate. He answered my questions with clarity and avoided dubiosity. I would recommend him to anyone seeking legal advice within his remit.

Posted 1 week ago

Yulian Z

Great service

Posted 1 week ago

Anonymous

Excellent, professional service and a speedy resolution. Many thanks

Posted 1 week ago

Taral P

Sacha and Chris were both very helpful in closing out my matter. Sacha was very clear in helping me understanding the documents I needed reviewing, providing a professional service throughout.

Posted 1 week ago

Anonymous

Really pleased with the swift and professional service from Redmans. They provided very clear advice and helped conclude my matter with the minimum of stress or delay.

Posted 1 week ago

Matthew L

Redmans were very quick to respond to my initial enquiry, and provided me with a very effective and efficient service, generating a most satisfactory outcome. I would definitely use them again if the need arose.

Posted 1 week ago

Anonymous

First rate service. Warm and friendly whilst exceptionally efficient at the same time. I would highly recommend them.

Posted 1 week ago

Anonymous

Professional and helpful. Thorough and supportive.

Posted 1 week ago

Richard A

Excellent service, prompt replies, great advice

Posted 1 week ago

Anonymous

Very professional services

Posted 1 week ago

Margaret

Redmans Solicitors took a lot of the worry away and were very thoughtful and meticulous in their dealings with my case , thank you very mush , great service and a great job

Posted 1 month ago

Mark B

Prompt efficient service. Hourly, and part thereof, billing got a bit stressful at times - as opposed to flat fee - made me think twice about sending an email or making a quick call when I had a query because it would have eaten up minutes from my budget. But happy with the legal service I received overall and would recommend.

Posted 1 month ago

Anonymous

Chris Hadrill has provided a truly wonderful service and was willing to lend his support and expertise at a time when other solicitors, only wanted to discuss their fees! A clear thinking and down to earth professional, Chris can be trusted to listen carefully to your matter, cut through the fog, and advise you on the best (and most realistic) way forward, saving you time, money and heartache. It will be helpful if you first get your ducks in a row in terms of documents / evidence etc. and then contact Chris, (that’s what we did) as this will help your matter to be dealt with faster. The more organised and together you are the more successful you will be. You'll be fine with Chris, I highly recommend him. Good luck!

Posted 1 month ago

Richard v

Excellent Service

Posted 1 month ago

Anonymous

Very happy from service received. Highly recommend

Posted 1 month ago