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Binding arbitration

Binding arbitration is the process by which two parties resolve a dispute without litigation. The process, which may also be referred to simply as ‘arbitration’, consists of a tribunal which hears the arguments of both sides and then decides on the award. The tribunal is made up of arbitrators who are appointed by the parties themselves.

Compared to litigation, binding arbitration offers the parties much more privacy, and they are not required to disclose information if they are not planning to rely on it. These two qualities make it popular amongst large companies which prefer to avoid both publicity and disclosing information about the way in which they operate. 

The Arbitration Act (1996) allows an arbitrator to withhold a decision until after their fees are paid. This is to avoid a situation in which the losing party refuses to pay the fees because the decision went against them. Binding arbitration is different from non-binding arbitration in that, as the name suggests, the award given by the tribunal is binding on the parties.

If you are entering into binding arbitration, you may want to consider hiring counsel even though this is by no means mandatory. Although the procedure itself does not take place in the courts, a tribunal’s decision is based on the laws of the jurisdiction indicated in the arbitration contract. Arbitration arguments therefore tend to be law-based, which means that legal knowledge is a great advantage.

If you would like to obtain legal advice on binding arbitration, Caven can put you in touch with a local arbitration solicitor free of charge. So, if you have any questions or would like our help in finding local arbitration solicitors please call us on 0800 1777 167 or complete the web-form above.

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