Civil procedure 447going to court. It is also the case that in large commercial disputes the arbitrators are often
High Court judges or Masters. Often the procedures followed by such arbitrators are very
similar to High Court procedures. The advantage of privacy is retained, but the proceedings
are unlikely to be substantially cheaper than High Court proceedings. Of course, the parties
have the choice of arbitrator and might choose less formal and cheaper proceedings if they
were satisfied that these would not prejudice their interests.
A dispute sent to arbitration is likely to be resolved relatively quickly. It takes a long time
for a case to get to court, whereas arbitration can be quickly arranged. Delays in arbitration
are usually caused because the parties cannot agree who the arbitrator should be. The
Arbitration Act 1996 has considerably reduced the delays which used to arise.
A final advantage of arbitration is that the right to appeal is severely restricted. The
parties know that once the arbitrator has made the award that is the end of the dispute. If a
dispute is taken to court an appeal, or the threat of one, can hang over the winner for some
considerable time.
Reference to arbitration
A dispute can only be referred to arbitration if both sides agree that it should be. If the dis-
pute is a contractual one, then a term of the contract may provide for arbitration. Such terms
are common in contracts made in the context of certain industries, including the insurance
industry and the building industry. But arbitration clauses are by no means restricted to
contracts made in those industries. It is quite possible that a contract between a boilermaker
and a business customer, such as the example used in relation to Acme Ltd and Bill’s Bakery
Co, might have contained a clause stating that any dispute arising under the contract should
be resolved by arbitration.
Alternatively, the parties might agree to arbitration once the dispute has arisen and both
sides have made their positions clear. Perhaps the arrival of Acme Ltd’s claim form would
be enough to convince Bill’s Bakery Co that the dispute was serious, and lead them to
suggest arbitration.
Whether the agreement is made in the contract itself or later, the important thing is that
once the parties have agreed to arbitration neither of the sides will be able to unilaterally
change their minds. If a party who has agreed to an arbitration clause tries to take the dis-
pute to a court instead of to the arbitrator the court will stay (discontinue) the proceedings.
It is a principle of contract law that no clause in a contract may prevent matters of law
from being decided by the ordinary courts of the land. Arbitration is the only exception to
this principle.
In addition to the parties in dispute agreeing to arbitration, many trade associations
provide that particular types of disputes should be referred to arbitration. These schemes
do not take away a customer’s rights or prevent a customer from taking a dispute to court,
but do provide a cheap way of resolving a dispute without going to court. These arbitration
schemes try to ensure that members of the particular trade association stick to the asso-
ciation’s Codes of Practice. These Codes of Practice are generally agreed to voluntarily as a
condition of membership of the trade association. Generally the Codes of Practice will set
out the standards which customers are entitled to expect. Perhaps the best known of these
arbitration schemes is the scheme run by the Association of British Travel Agents, which
attempts to resolve disputes arising in connection with the travel industry. Other schemes
apply to very many trades, including double glazing, laundry services, electrical repairs
and the processing of photographs. These schemes may well give a remedy to a customer
where the law would not do so. They also have the advantage that the arbitrators will
be closely connected with the trade in question and will be able to apply this knowledge in