I resolve property disputes for a living. Following several successful arbitrations, I am now a big fan of the process. As an alternative to litigation, I would have little hesitation in recommending arbitration; the only prerequisite is that the disputing parties have already agreed to arbitrate, either by way of an arbitration clause in any contract between them, or because the parties have agreed anyway to arbitrate. It is not necessarily cheaper than court proceedings and the parties are still in the hands of a third party to decide on the outcome, but here are some of the reasons I have found it to be so effective, together with a few pointers and tips for getting the most out of the process.

Referral is straightforward

Generally in an arbitration, the parties are free to choose who to appoint to act as arbitrator, and in the absence of agreement, the RICS (or relevant professional body) will be asked to appoint someone from their experienced panel of arbitrators. It is not uncommon for neither party to agree to the other party's suggestions and therefore little time should be spent trying to promote any preferred arbitrator.

It is relatively easy to appoint an arbitrator through RICS whether your dispute is in relation to valuation, rent review, dilapidations, a construction or engineering dispute, an agricultural partnership dispute or a dispute over development of land .The simple filing of a form setting out brief details of the dispute will result in the appointment of an arbitrator in a matter of weeks, if not days. In my most recent arbitration, a request for an arbitrator to be appointed was sent off on 2 September 2016 and the arbitration appointment was confirmed on 28 September 2016.

Don't delay in referring a dispute to arbitration

If it has become clear that the parties are so far apart in their respective positions that there is little prospect of settlement then don't delay in referring the matter to arbitration. Just like court proceedings, the parties can request a stay in the arbitration process if there is a realistic prospect that a settlement can be reached. But, unlike court proceedings, there is no requirement to draft extensive pleadings or pay a hefty issue fee to set the ball rolling. (Currently it costs less than £500 in administration fees to request the appointment of an arbitrator through RICS).

Timescale

A typical arbitration can be concluded in less than 12 months, whereas the same matter dealt with by the court could conceivably take 2-3 years. It does mean you need to be very proactive in setting agendas and sometimes cajoling experts, but the flexibility of the arbitration process does allow you the opportunity to concertina the timetable much more than you would be able to if running the matter at court.

Parties engaged in an arbitration have much more freedom to dictate not only the directions to be set but also, subject to their own, their experts' and the arbitrator's diary commitments, they are free to dictate the directions timetable. This can be a huge benefit to the parties, for example a developer who has exercised an option and has the subject property earmarked to be built out within a very limited window, or a landowner who needs property to be sold before a certain date for tax purposes. Although there is little control once the arbitration hearing has taken place as to when the arbitrator makes his or her award, however even in matters involving complex planning disputes, it is usual for the final hearing to take place within 12 months from the date that the arbitrator confirms his/her appointment.

Contacting the arbitrator

Once the arbitrator has been appointed, either party is at liberty to write direct to the arbitrator concerning any relevant matter, outside of 'without prejudice' discussions/correspondence, so long as the other side is copied-in. The advantage of this approach is that the arbitrator can be alerted early on to side issues which may be distracting one party from meaningfully engaging in the process.

In one instance, a landowner continued to dispute my client's right to trigger an option on the basis that the planning permission that had been obtained allegedly failed to maximise the value of the land in purported breach of the option agreement. The landowner's advisors were under the impression that they could stall the arbitration process by issuing court proceedings for a determination of this issue. However, section9 of the Arbitration Act 1996 made this an empty threat. (S.9 gives the court the power to stay any proceedings brought in respect of a matter which the parties have agreed is to be referred to arbitration).

We were able to request that the arbitrator deal with the point by way of a preliminary issue. The (surveyor) arbitrator was able to invite the parties to make submissions on the point and then appoint a legal assessor, within the arbitration proceedings, to decide a point of law. The legal assessor determined the point in our favour and once the matter had been dealt with the parties were then able to focus on the main issue of valuation.

Flexibility around experts

Most arbitrations will follow the same format as a court determination with the arbitrator giving directions for the exchange of initial submissions, disclosure, witness statements, expert reports and setting a trial window; but, in addition to allowing the parties the freedom to set the dates for compliance with the directions, the parties are also relatively free to dictate the number of experts that either party may seek to rely on.

For example, in a dispute over the value of land each party will naturally want their own expert valuation surveyor but other issues may be in dispute. Often an Option Agreement will provide that the price to be paid is to be calculated by ascertaining the market value and then making certain deductions. This can mean that issues like the rate of finance, the cost of building infrastructure or the amount of reasonable promotion costs are also relevant and expert evidence may be needed. The use of such additional experts may not only assist the arbitrator in being able to determine the issue, but it may in fact lead to those issues being resolved before the final arbitration hearing. Additional experts can be brought into the arbitration process much more readily than when conducting the matter through court proceedings.

Fully brief your expert on duties of impartiality

It is surprising how many times a party retains its original advisor to act as expert in arbitration proceedings, only to be caught out when questioned as to his/her fee arrangement. Make sure that, in acting as expert, experts are fully aware that their duty to the arbitrator overrides any duty to their client, they must act independently and impartially and must not undertake any expert witness appointment on a conditional-fee or other success based arrangement. If they do, they run a very real risk of succumbing to unconscious bias and find that their evidence is either inadmissible or very little weight can be attached to it.

Also ensure that your expert has expertise and experience on all matters on which he/she is giving evidence. For example, if your expert is giving evidence on usual practice adopted by house builders when considering risk, then make sure your expert has actually either worked for or advised house builders. Likewise, when giving evidence on build costs for example, make sure your expert is familiar with the software commonly used in the industry. If necessary, appoint additional experts, but don't wait for your expert to be humiliated in the witness box.

Calderbank offers

Consider making a credible Calderbank offer before you trigger arbitration. The cost consequences that flow from Calderbank offers apply to arbitration proceedings in the same way that they apply to court proceedings. Make sure that you fully appreciate the merits of making a realistic offer, and that the offer is the maximum (or very close to the maximum) amount that you are prepared to pay (or the minimum that you are prepared to accept) in order to get the best possible protection against costs. Whilst arbitrations are invariably quicker, more flexible and less formal than court proceedings, they are not necessarily less expensive. A well thought out Calderbank offer can re-coup thousands of pounds in costs.

Additionally, if there is more than one amount in dispute, for example, if the arbitration involves a difference in infrastructure costs as well as market value, then make sure your Calderbank offer addresses both amounts and stipulates that either offer can be accepted individually or collectively, with the cost consequences spelled out in each situation.

Mediation

Consider twin-tracking your arbitration with a mediation. It may be preferable to insist that the parties engage in the appointment of an arbitrator initially, however, once the appointment has been made, this does not preclude the prospect of also engaging in a mediation. Often the exchange of initial statements of case flush out the main areas of dispute between the parties. Once these areas have been established then, for the purposes of mediation, 'without prejudice' expert reports can be prepared, and the parties are more likely to be able to be in a position to assess both the strengths and weaknesses of their own case and that of their opponents, to consider whether or not a meaningful mediation is likely to be attractive.

The obvious advantages of a successful mediation are that both parties have certainty at an earlier stage, and neither party ends up winning or losing, and any successful/professional working relationship can be maintained. Mediation also allows the parties to be more creative in agreeing a settlement, for example, they may agree to make staged payments in satisfaction of the amount in dispute, or increase or decrease the area of land to be purchased, or offer not to back-date a rent review and just generally be more imaginative with a settlement 'package' than would be possible in an arbitration, where the arbitrator is only entitled to make a decision on the subject of the arbitration.

Confidentiality

Arbitration proceedings in England and Wales are subject to duties of confidentiality. Unless there is an agreement otherwise, hearings may be attended only by the arbitrator, the parties, and their representatives, and the parties and the arbitrator are under duties to maintain the confidentiality of the hearing, documents generated and disclosed during the arbitral proceedings, and the award itself. This makes arbitration a very attractive choice of dispute resolution mechanism when dealing with commercially sensitive issues.

Postscript

The arbitration process introduces formality, when formality is needed, but otherwise gives the parties free-rein to manage and resolve disputes in the most effective way. With flexibility around timing and the use of experts, arbitration encourages the parties to constructively engage with each other more than the court process, and this then creates a better platform for the parties to continue to work together once the dispute has been resolved. And above all, it's user-friendly and I've had some good outcomes - I am definitely a convert!