Understanding arbitration

Arbitration is an increasingly popular alternative to traditional court proceedings, particularly in disputes relating to property and financial matters.

Below we address the most commonly asked questions from clients about arbitration, including the definition of arbitration, advantages, costs and how it differs from other approaches.

What is arbitration?

Arbitration is a dispute resolution process in which parties can engage an arbitrator to make a determination to resolve their dispute.

Arbitration vs. litigation

Unlike litigation through the court system, during arbitration parties choose their own arbitrator, and the process is typically conducted privately.

What is the cost of arbitration?

Arbitration is typically a more cost-effective dispute resolution process than litigation through the court system. This is because matters can be actioned and heard sooner than through the court system, reducing costs and expenses associated with Court procedures and significant case loads, processing delays and protracted hearings.

What if a dispute is between parties from different states, countries or jurisdictions?

Where parties agree, arbitration may be used domestically and internationally to deal with matters in a specific jurisdiction. Both parties must agree upon the jurisdiction under which the dispute will be arbitrated. During arbitration, parties can also determine the primary language in which the arbitration will be carried out.

How do I select an arbitrator?

There are typically two ways to select an arbitrator - by agreement between disputing parties or through an independent third party on behalf of the disputing parties. Industry bodies such as The Australian Institute of Family Law Arbitrators and Mediators (AIFLAM) maintain a list of suitably qualified and experienced practitioners who may preside over a dispute.

Is an arbitration award binding?

Yes, once registered, awards made during arbitration are an enforceable decree of the courts, which means they are binding.

What are the advantages of arbitration?

Arbitration is a popular alternative to court proceedings as it can be personalised to each dispute and/or each issue. It also offers greater privacy and is often faster than going through the court system, which can take anywhere from weeks to years.

The arbitration process is confidential, and disclosures made during the process can be protected.

Parties can select the arbitrator as well as the specific issues they wish to arbitrate and resolve. Parties can also arbitrate a discrete issue, allowing their matter to return to the court for a final determination if they so wish.

The arbitration process can be conducted in person, via video conferencing and via written submission, or as agreed by both parties.

At the conclusion of the process, the arbitrator makes an award, supported by reasons after affording each party procedural fairness. Once registered, the award can only be set aside on a question of law (similar to an Appeal) or on specific legislative grounds.

Mediation vs. arbitration

The difference between mediation and arbitration is that, unlike mediation, parties cannot withdraw once the arbitration process has commenced and the outcome is legally binding.

For more information about the arbitration process, or to speak with an accredited and experienced arbitrator contact a Lander & Rogers family law representative.

This article was last reviewed in October 2024