The long awaited Arbitration (Scotland) Bill 2009 was introduced in the Scottish Parliament on 29 January 2009. The Bill was drafted by the Scottish Government in consultation with the Chartered Institute of Arbitrators and arbitration practitioners. It serves to modernise and codify the law of arbitration in Scotland.
Historically, arbitration has been an under utilised method of alternative dispute resolution in Scotland. Until now, domestic Scots arbitration law derived primarily from case law and was criticised for being unclear, often inaccessible and out of step with the rest of the world. The proposed legislation will radically improve the entire arbitration process by increasing access and providing a comprehensive, clear and transparent structure.
Arbitration enables parties to submit their dispute to a third party who will generally have specialist expertise and who will act as a private tribunal to determine the dispute. Part of the attraction of arbitration is its flexibility and speed. Unlike litigation, it is not constrained by the rules of court. The arbitrator can adopt procedures which best serve the parties in resolving the dispute. The Bill imposes a duty on the parties and the arbitrator to conduct the arbitration as quickly as is reasonably practicable and without incurring unnecessary expense. Further, the Bill provides for strictly limited availability of recourse to the courts. The aim is to drive the arbitral process forward as quickly and cheaply as possible.
Arbitration under the new Bill could lead to dispute resolution becoming a more user friendly process. It will widen access for businesses both small and large. More significantly, individuals will be able to opt for their dispute to be resolved by means of arbitration rather than court and its associated stress, cost and potential delays. In the current economic climate, the risk and costs involved in litigation often militate against individuals and small businesses pursuing the recovery of small debts. The arbitration process envisaged by the Bill, will hopefully provide for a more satisfactory, cost-effective, speedier and accessible route to justice for lower value claims.
The new legislation once enacted, will put Scotland at the cutting edge of ADR processes. Scotland’s international reputation in law and finance means it is supremely placed to offer world-class arbitration. It is hoped that the new streamlined statutory framework for arbitration will, over time, attract international business and stimulate interest in Scotland as an arbitral venue.