How does arbitration work?

Arbitration involves an independent and impartial person, or persons, making a decision on a dispute. The arbitration process can be used to resolve a wide range of conflicts from workplace to international issues, although many people have only a vague idea of how arbitration works in practice. In this article we look at the different uses of arbitration and its variations in different parts of the world.

How does it work?

A voluntary process Arbitration is a voluntary process, so both sides must agree to the process. While this adds impetus to the achievement of a resolution to the problem, it also demands that both sides in the dispute agree to abide by whatever decision is reached. When arbitration is used Arbitration can often be seen as an alternative to a court of law, and has the benefit of remaining a private process. In many ways this reduces the pressure to appear adversarial and can speed the resolution. There is no swearing of oaths and it is the arbitrator who poses the questions rather than a judge. Industrial disputes It is often used for the settling of industrial or collective bargaining disputes involving trades unions and employers. In the United Kingdom the Advisory, Conciliation and Arbitration Service (ACAS) is the main player in this area. Although it is largely funded by government it is managed by an independent council. Individual disputes Arbitration can be used to resolve smaller scale issues. An employee and employer may opt to use formal arbitration rather than go through the stress and cost of an employment tribunal.

International acceptance

United States In the United States arbitration is also recognised as a way of resolving the kind of issues describes above without the need to resort to litigation. A number of bodies have been formed to carry out this kind of work and to educate potential users of the service in its advantages. International courts Courts of Law in almost all western countries, and many others, will accept arbitrated decisions as binding agreements, although recently some have been challenged in both the US and Europe. American Arbitration Association rules are often used as guidelines for dispute resolution. The recommended process is also taught at aaauonline.org, which offers a range of advice, courses and publications on the subject.