This is a procedure whereby parties refer the issue with which a dispute is concerned to an authoritative third party for resolution. This is very suitable for business-related disputes, as people involved usually wish to maintain long-term relationships. Court cases can rupture such relationships. .
Arbitration in England is regulated by the Arbitration Act (AA) of 1996. One aspect of the AA is the autonomy of parties. The parties themselves decide on which principles the case is to be decided. .
A second aspect are the powers of the arbitrator and of the court. For example, if one party in the dispute decides to seek court assistance, the other party may request the court for the case to stay under arbitration. Courts are careful to maintain a supervisory role in arbitration. The proceedings of arbitration are open to challenge through judicial review. .
For arbitration, there is no legal aid available. As the maximum monetary value of a case has risen to £ 5,000, more and more lawyers are present at cases, whereas not everyone is in a position to afford a lawyer. .
Arbitration is appropriate when small claims are concerned (i.e., the monetary value involved is less than £ 5,000, or £ 1,000 for personal injury claims). Arbitration can also not deal with cases that are too complicated legally, or involve a charge of fraud. .
A second type of ADR are administrative tribunals. These tribunals are set up under various acts of parliament. Slapper and Kelly (2000, p. 671) suggest that tribunals are merely adjuncts to parent projects of parliament and that their function is more administrative than adjudicatory. They are, in that sense, inferior to normal courts. .
Tribunals most often are made up of three members, of which only the chair has to be legally qualified. The other two are lay members. Two examples of statutory tribunals include employment tribunals and mental health review tribunals.
