A select number of Branch members visited Utopia last spring to see how their arbitration system works and this is the first report of the visit.

The applicable legislation is very similar to the 1996 Act (indeed we wondered whether our legislature had just taken a copy, made minor modifications and pretended to have thought the thing up themselves) but came into force over 20 years ago and is now well established. The only substantial difference between the two Acts is that, in the Utopian version, all of the arbitrator’s powers are mandatory and subject to the unfettered discretion of the arbitrator, the parties cannot by agreement increase or limit the power of the arbitrator. Control of the arbitrator is by a strict system of performance monitoring and licensing, for which see later.

We had expected to find that arbitration (or indeed any form of dispute) was rare in Utopia but in fact found that virtually every contract is settled by arbitration. The reason is that they have found arbitration to be so quick and cheap that it is commercially better to settle in this way than by negotiation which had become extremely time consuming and expensive, with both sides employing specialist consultants.

It was interesting to note that Utopia has recently passed legislation so that every contract must contain an arbitration agreement. The only jurisdiction of the courts with regard to contractual disputes is as set out in the Act. The current concern in Utopia is that there is a Bill before Parliament which will compel tort actions to be settled by Arbitration, which is likely to clog up the system and require qualification of a large number of arbitrators from inter alia the medical professions.

Appointing bodies have a rather different function. Most arbitrators are appointed by agreement between the parties, within 7 days of an ‘agreement to refer’ (which takes the place of our notice and includes a provisional schedule of issues). As arbitration is so common, the parties are familiar with a large number of arbitrators, hence the ease of agreement. The appointing body is only referred to if the parties cannot identify an arbitrator who is fully suited to deal with the identified issues or if all appropriate arbitrators are fully committed elsewhere. There is a national scale of charges and terms which depends on the ‘grade’ of arbitrator with an adjustment factor dependent on the monetary value of the award, to which all arbitrators are bound. arbitrators are bound to accept any appointment offered, provided that they are not committed to another arbitration. There is a national registration scheme and an inspecting body who has the authority to withdraw the practising licence from an arbitrator who fails to achieve the standards of competence required. The practising licence is renewable every five years but renewal is subject to a review of performance.

The main purpose of the preliminary meeting is to decide on how each of the issues will be approached; whether by the arbitrator acting on his own initiative or using a technical assessor, by ‘oral’ testimony, affidavit, documents, or any other method which appears appropriate. This decision also establishes the style of ‘pleading’ if any. There is no provision for experts to be appointed by the parties, their role, if needed, is filled by an assessor appointed by the arbitrator.

It is quite rare for oral testimony to be adduced at a hearing. After exchange of witness statements, the parties say which of the other parties witnesses they require for cross examination and for which part of their evidence. Alternatively, the witness may be asked to respond to interrogatories. For the most part, there is no need for witnesses to attend. a hearing. The arbitrator sends to the parties findings of fact or law which had been determined by either himself or his technical or legal adviser at the same time as the witness statements and the parties are at liberty to identify any matter which they require further information or clarification, to be adduced at the hearing.

The hearing usually comprises a review of the issues and agreement as to what evidence each party wishes to adduce in respect of each issue. As the preparatory work will usually have been carried out by the parties and ‘bundles’ of documents prepared for each issue, the time in the hearing tends to be an overview that all is as it should be and the final opportunity to include any missing document. All arbitrations start on the same basis but may become ‘documents only’ or ‘look sniff’ if it becomes apparent that a hearing is not needed. This decision can be made at any time as procedures are constantly under review.

From beginning to end importance is given to the issues. A provisional list of issues is prepared with the ‘agreement to refer’ and this becomes the lynch pin of the proceedings, running through the hearing to the Award. Although the list is developed and can change considerably, all matters are related directly to individual issues (if not then they cannot be relevant).

Instead of our cumbersome system of discovery and inspection, each party is invited to inspect all documents at the other’s offices and to take copies if required. Many companies keep a room reserved for these purposes and this inspection may have taken place before the arbitrator has been appointed. After the banning of computers, word processors, photocopiers and faxes and the introduction of a ‘per page’ tax on paper five years ago, the number of documents has reduced so substantially that even the largest of projects is unlikely to require more than 5 lever-arch files.

The timetable is constantly under review and it is quite common to reduce the original anticipated periods, which usually results in a hearing (if needed) within three months of commencement and an award two weeks later. It was the speed of disposal which led to the popularity of arbitration compared with litigation. The ‘losing’ party is usually ordered to pay the costs of the winner and of the arbitrator, on an indemnity basis.

A substantial departure from the English system is that the State provides the venue for hearings, using the redundant court buildings. It is rare for hearings to last for more than two or three days.

The matter we found to be most surprising was that lawyers are fully involved at all stages of the proceedings and, indeed, were the prime movers for the current system. Although cases are settled extremely quickly and cheaply, this led to such a substantial increase in the number of cases dealt with that the number of specialist (usually dual qualified) lawyers has doubled and the number of arbitrators has increased fourfold over the last ten years while the overhead costs of the parties has been reduced by some 15.

After such an enlightening experience, it was so disappointing to return to England and find that nothing had really changed and our process still felt as though we were wading through treacle.