There are different forms of arbitration. PAA Ramsden enunciates these as being consensual arbitration, statutory arbitration (such as the Labour Relations Act 66 of 1995), court-directed arbitration, ad hoc arbitration, institutional arbitration, documents-only arbitration, fast-track arbitration, ex parte arbitration and multi-party arbitration. All these different forms according to arbitration proponents have advantages especially when compared to litigation. In general, these advantages are: 1
Speed / saving time
Arbitration is usually quicker in bringing resolution to a dispute than litigation. Lengthy delays in obtaining court dates and it is argued abuse of the pre-trial procedure hampers the speed of the courts. This saving in time equates to a substantial saving in cost.
2
Flexibility
The parties to the dispute have the right to choose the arbitrator and can determine the venue and time of the commencement of proceedings. The form of arbitration can be varied and adopted to suit the situation.
3
Expertise of the Arbitrator
If the dispute involves a complex issue, an arbitrator can be appointed with the necessary expertise in the subject matter in dispute. This would reduce the number of expert witnesses required to give evidence and it is submitted saves time and costs.
4
Legal Representation not obligatory
The parties can conduct the arbitration themselves as opposed to court proceedings, where parties are usually represented by attorneys or advocates.
5
Economy
This is only an advantage if the forum of arbitration is less formal and time consuming. One should keep in mind that the parties pay for the arbitrator, venue, and institutional costs, which is not the case with court proceedings.
6
Finality
Arbitration awards are final. There is no automatic right to appeal unless the arbitration agreement provides therefore. In litigation judgments can be taken on appeal.
7
Privacy
Arbitration proceedings are private, and the parties should make provision in the arbitration agreement for the confidentiality thereof. Court proceedings are in the public domain.
8
Jurisdictional problems avoided
This is especially in international commercial arbitration where the parties are from different legal systems, and it is difficult to decide as to the jurisdiction, law, procedure and enforceability of the award. The parties can resolve issues by virtue of the rules of the law of their choice.
9
Avoidance of delay
Litigation affords ample opportunities to use delaying tactics whereas an arbitrator can determine the dispute with minimal delay.
10
Justice for all
Arbitrations are conducted relatively informally, thereby bringing justice within the reach of those deferred by the expense, delay, and uncertainty in litigation proceedings.
Butler and Finsen indicate that there are also disadvantages associated with arbitration. If the proceedings are conducted in a formal manner the costs could be higher than litigation. There are also limited remedies to attack an award. There are no provisions for compulsory consolidation of arbitration proceedings without the consent of the parties. Legal aid, which is available in certain circumstances to assist litigants, is not available in arbitration proceedings. Finally, the nature of the dispute would be appropriately resolved by litigation, for example, if a precedent is required to obtain clarity on a legal issue or when public interest might be an overriding consideration.
There is no doubt that the advantages outweigh the disadvantages and should be seriously considered as an alternative to litigating in court.