Article reference: UK-IA-LAW28

Methods of dispute resolution: arbitration

There are an increasing number of applications to employment tribunals, and as far back as 2003 the tribunal system was becoming overloaded.

This article looks at a different way of resolving a disagreement - arbitration. It is one of several possible means of alternative dispute resolution, and a popular choice for resolving employment disputes.

What is arbitration?

Arbitration involves an independent arbitrator who is impartial and the parties who are involved. The arbitrator will hear both sides of the disagreement and make a decision that will solve the problem.

You and the other person or company must both agree and voluntarily go to arbitration.

Advantages of arbitration

The process is confidential and so is any amount of compensation that the arbitrator awards.

Sometimes the arbitrator makes their decision based on papers that each person gives them to support their case. At other times they hold a hearing where both sides can present their cases. However, this is usually less formal than a court hearing.

The result of arbitration is binding, so you can’t take your case to court after the arbitrator has made a decision, unless the arbitrator has made obvious legal mistakes or behaved improperly. Because the outcome is binding, an award can be enforced by a court if it is not forthcoming to you.

The process is fast, usually taking less than a day to hear. Of course, you will need to prepare in advance for the arbitration hearing. Because it takes less time, it is usually more cost efficient

Arbitration can be used for a range of problems, including those about non-delivery of goods or poor quality of services.

If you have a complaint with a business, and they are a member of a trade association, ask the trade association whether they have an arbitration scheme to deal with your problem.

ACAS Arbitration Scheme

Since the Employment Act 2002 reforms, ACAS have introduced the ACAS Arbitration Scheme, which aims to reduce the number of claims by 30%.

ACAS run this voluntary scheme as an alternative to the employment tribunal for unfair dismissal cases.

Further information

You might be interested to read about litigation as a method of dispute resolution next.

You can find out more about the ACAS service here.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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