Arbitration – adding another string to the bow

In this time of changing economic and political direction, it is important that professionals in the built environment evolve and adapt their services and skills to survive and thrive.

One area in which professional experience, knowledge and skills are becoming increasingly valuable is helping to resolve disputes. The government and judiciary increasingly encourage the use of alternatives to the courts to determine disputes. The dominant theme is that parties should have access to nimbler and more cost-effective means of dispute resolution than litigation offers. Parties desire quicker, cheaper and more private alternatives to the courts, and arbitration is increasingly being adopted as the method of choice in many cases where disputes concern land, property and the built environment. Therefore, professionals with experience are well positioned to help their clients contend with the range of challenges involved in disputes, and a field of practice that offers them an opportunity to diversify is arbitration.

The future for both the national and global economy is still uncertain, but disputes will inevitably occur in good times and bad. Whether a client is a landlord or tenant, an employer or a contractor, even the best of intentions and the most robust contract drafting cannot prevent the risk of a dispute between the parties. Parties are increasingly conscious of the financial costs, delay and publicity that often come with litigation; for many, arbitration is a reliable mechanism for resolving the dispute effectively. Being a qualified arbitrator with the added skillset and knowledge of the built environment means these professionals can offer specialist services that are increasingly in demand, recession-proof and transferrable across professional and industry sectors. They understand, and have immense experience of, sophisticated and specialised issues that lawyers and other professionals do not.

Over the years, the construction and engineering industry has suffered as many projects have ended up in dispute. This has driven the need for some form of dispute resolution. Arbitration is the preferred method within the industry when there are multiple complex issues and there are significant amounts of money involved. As demand grows, so does the demand for arbitrators who are subject matter experts. The decision-maker’s expertise is often of paramount importance, particularly where issues are highly technical in nature. Parties are more confident if their arbitrator is technically proficient in matters that are at the heart of the dispute. Parties inevitably want their arbitrators to be able to understand all specialised aspects of the dispute, and have a firm grasp of the relevant market and/or industry so that they can properly appreciate the evidence and arguments submitted by parties.

Not only can industry professionals act as arbitrators, they can also be effective advocates for their clients who are parties to arbitrations. There is a well-known saying that a man who is his own lawyer has a fool for a client. In reality, many parties opt to appoint professional surveyors to represent them in arbitration proceedings. This is particularly the case when disputes involve specialised issues around property or construction, and require evidence to be submitted by a surveyor who is a subject matter expert and able to effectively inform and persuade the arbitrator. Another critical factor that is turning parties on to arbitration is the perception of fairness and transparency. Claimants and respondents trust arbitrators to be objective and remain impartial. Parties can have confidence in chartered surveyor arbitrators because they are not only regulated by arbitration law, but are also subject to independent regulation by RICS. Professional integrity and impartiality are key components of the Royal Charter that governs all members of RICS.

There is evidence of consistent and significant growth in the use of arbitration across a wide range of sectors, including land, property and construction. Parties want their problems to be resolved through sound, commercially sensible decisions made by professionals who understand the relevant subject matter. This presents genuine opportunities for chartered surveyors to get involved in arbitration proceedings.

In addition to built environment professionals, lawyers who specialise in arbitration are also increasingly in demand. As more disputes are being resolved by arbitration rather than litigation, it is imperative lawyers familiarise themselves with alternative methods of dispute resolution such as arbitration.

Commercial arbitration skills can be developed through RICS’ blended learning Diploma in Arbitration, designed to increase the number of arbitrators. The Diploma is intended for those looking to act as arbitrators or professionals who could represent parties in arbitration situations.