U3 AOS 2a lesson 5

Question 1

features of arbitration: where and what issues

Answer 1

*Arbitration is conducted in private, can be less formal + more cost effective than attending courts

*Commonly used by parties involved in disputes involving in large commercial transactions that are seeking to resolve contractual disputes outside of courts.

Question 2

features of arbitration: key difference to courts

Answer 2

• Not bound by rules of evidence - may inform themselves on matters the see fit
• Not required to conduct proceeding in a formal manner

Question 3

features of arbitration: role of arbitrator

Answer 3

• One of the most formal ‘alternate’ methods of dispute resolution outside of courts
• Involves an independent 3rd party known as arbitrator
• Who will listen to both sides
• Makes a legally binding decision on both parties - known as arbitration award

Question 4

where can arbitration be used: private

Answer 4

*Can be arranged by parties themselves

• Usually involving commercial transactions - due to terms in a contract
• Takes place at Dispute Resolution Centre /Melbourne Commercial Mediation and Arbitration Centre

Question 5

where can arbitration be used: courts

Answer 5

*When a small claim is filed in the Magistrates’ court for below $10,000 matter is obliged to be referred to arbitration

• Magistrates can also refer matters to arbitration with consent of parties for amounts above $10,000
• In County + Supreme court - can request that parties attend arbitration if they consent

Question 6

where can arbitration be used: arbitration in tribunals

Answer 6

• VCAT (Victorian Civil and Administrative Tribunal) can refer parties to arbitration before the final hearing however does not conduct the arbitration process itself

Question 7

arbitration appropriate: below $10000

Answer 7

Arbitration is appropriate when the matter is below $10,000 and matter was filed in Magistrates’ court

Question 8

arbitration appropriate: legally binding

Answer 8

Arbitration is appropriate when parties want to benefit from a legally binding decision

Question 9

arbitration appropriate: consent

Answer 9

Arbitration is appropriate when parties consent or agree to attend arbitration or, it is included as part of their contractual agreement

Question 10

arbitration inappropriate: outcome

Answer 10

Parties want to control the outcome of the dispute without the legally binding nature of arbitral reward

Question 11

arbitration inappropriate: financial

Answer 11

more expensive compared to courts

if unhappy with outcome taking dispute to court adds to expenses

Question 12

arbitration inappropriate: want matter heard publicly

Answer 12

Want the public to be aware of the outcome

want formal procedure of courts with evidence jury etc

Question 13

strengths of arbitration: binding

Answer 13

The decision is binding and is fully enforceable through the courts. This means that there is certainty in the outcome.

All parties receive and outcome with both sides considered equally

Question 14

strengths of arbitration: control

Answer 14

The parties have control over how the arbitration is conducted, by determining how evidence is to be presented and when steps
are to be undertaken.

this allows individuals to engage + participate on an informed basis if there is no formal procedure and an average person can understand

Question 15

strengths of arbitration: expertise

Answer 15

The arbitrator is generally an expert on the subject matter and is required to act impartially when making a binding decision.

expertise allows for consistent and fair outcome

Question 16

weakness of arbitration: control

Answer 16

The parties have no control over the outcome, which will be imposed on them by the arbitrator. This means that a party could ‘lose’ or ‘win’, without feeling like they have both won and lost (as can be the case in a
mediation).

stronger party may have impact on outcome

Question 17

weakness of arbitration: agreeance

Answer 17

It is not available if the parties have not agreed to this form of dispute resolution, or if the claim is not a small claim in the Magistrates’ Court.

can only participate under certain conditions

Question 18

weakness of arbitration: costly

Answer 18

It can be costly and take a long time depending on the nature of the dispute and the way the parties have decided to resolve it. for example, if the parties have agreed to exchange evidence and have a hearing, this will be much more expensive than a mediation

unable to financially access most formal dispute resolution other than courts