What is an arbitrator? (Including skills and responsibilities)

Updated 8 August 2023

Arbitrators are responsible for settling disputes between two parties and coming to a fair decision. They play a crucial role in the justice system as they encourage communication between both parties to ensure that both claimants receive equal treatment. If you're an effective communicator and critical thinker with a passion for fairness and justice, a career as an arbitrator might be the right choice for you. In this article, we answer the question 'What is an arbitrator?', look at what an arbitrator does, the required skills and answer a series of other frequently asked questions.

What is an arbitrator?

In answer to the question 'What is an arbitrator?', they're an independent third party nominated to handle the arbitration process. Similar to a judge, they're responsible for listening to both sides of a legal dispute to come to a decision. But while judges take an adversarial approach, arbitrators encourage collaborative communication to come to a fair conclusion and help the parties to avoid going to court to resolve the issue. Arbitrators don't require any specific qualifications, but industry and legal knowledge are useful if the dispute deals with technical matters.

What does an arbitrator do?

Arbitrators settle disputes by listening to each side, which includes a claimant and a respondent, looking at the evidence presented and deciding an appropriate outcome. When the arbitrator decides, this is legally binding and referred to as an award. If the claimants or respondents are unhappy with the outcome, they can take their case to court to amend the decision. To ensure a fair outcome, arbitrators often consult with a relevant technical expert to write a report about the claim or help make the decision. If an expert writes a report, they then send this to both parties.

What responsibilities does an arbitrator have?

Arbitrators have a wide range of legal and ethical responsibilities, such as:

Adhering to the principles of natural justice

To preserve the legitimacy and fairness of arbitration proceedings, it's important that arbitrators keep the principles of natural justice in mind. There are three principles of natural justice, which are the hearing rule, the bias rule and the reasoned decision. The hearing rule states that the party or person affected by the arbitrator's decision deserves the opportunity to defend themself, while the bias rule states that the arbitrator has to make the decision in a fair and free manner. The reasoned decision states that the decision has to be on reasonable and valid grounds.

Hearing in absence of a party

Arbitrators declare oral or written information obtained from one side and disclose it to the other side. If one party is absent from the proceedings, the arbitrator has to confirm that they had access to the location of the hearing and information about the date and time but refused to attend. The evidence presented by the appearing party can determine the arbitrator's ruling and the arbitrator is responsible for acquiring all the relevant documents to reach a fair and just decision for both parties.

Maintaining privacy and confidentiality

The privacy and confidentiality of legal proceedings are essential for arbitrators to maintain. One of the benefits of arbitrations is that they're a more confidential form of dispute resolution than traditional methods. The confidentiality agreement signed by arbitrators encompasses all the legal submissions and evidence from witnesses and documents in advance.

But there are exceptions to the rules regarding confidentiality and privacy in arbitration. As of February 2022, it's not necessary for arbitration to be confidential if both parties give consent, but disclosure is necessary for the interests of justice, if the court orders disclosure or if the disclosure is in the public interest.

What skills does an arbitrator require?

To become a successful arbitrator, you require the following skills:

Writing

Great writing skills are essential for arbitrators to develop, as they have the responsibility of drafting arbitral awards. These awards are legally binding, so it's crucial for them to be free of ambiguities and written clearly. Arbitrators are responsible for proofreading every piece of work they submit to eliminate errors. After drafting awards, it's worth re-reading it again to ensure that it doesn't contain any vague points, factual mistakes or grammatical errors. Good arbitrators ensure that their awards are error-free and clear to avoid creating legal implications that could cause issues in the case.

Communication

All arbitrators require excellent language abilities and the ability to communicate their ideas clearly and concisely to a variety of audiences. It's important that they speak with an air of authority and confidence when making points to maintain their command over the legal proceedings.

Practising active listening is also a crucial skill to improve your communication as an arbitrator. It's important that arbitrators listen to and understand the evidence to help them make an informed decision. Part of active listening is also the ability to control when to intervene in an argument, so you can successfully get information from both sides of the dispute.

Critical thinking

Critiquing your own work is one of the best ways to maintain and develop your critical thinking skills. By making a conscious effort to honestly assess your own work, you're learning how to remain unbiased and view all the evidence in front of you as an impartial third party. Critical thinking skills are essential in the decision-making process as they allow you to make fair and just decisions.

Time management

As you grow your practice as an arbitrator, you may notice your appointment list continues to grow along with it. To keep on top of all these appointments, it's essential to create a system to organise them and help you manage your time. Time management is also important when completing arbitral awards, as it's essential that you meet your competing deadlines. Keeping a document that outlines the schedule, scope and budget of a case can help you manage the drafting process of the award. This allows you to transition seamlessly from case to case so you can grow your practice.

Arbitration FAQs

Here are some common questions regarding the practise of arbitration:

What is the difference between conciliation, arbitration and mediation?

Arbitration is a formal form of alternative dispute resolution (ADR) that involves a tribunal process and a final outcome determined by the arbitrator. Arbitrators can rectify most commercial disputes without the need for the case to go to court. Conciliation and mediation are much more informal processes and focus on facilitating communication to resolve a conflict. Mediation doesn't usually require any proposals to make a settlement, while conciliation involves recommendations and evaluative methods. Aggrieved parties primarily use mediation to settle personal or family disputes, such as those between consumers and traders, while conciliation is mainly for employment disputes.

How much does arbitration cost?

While arbitration proceedings offer greater flexibility for both parties than litigation, there are some differences in the costs accrued. Both parties are responsible for covering the cost of the venue for the arbitration and the arbitrator, alongside paying for their own legal representation. It's essential for both parties to discuss the costs with their solicitors to ensure the costs of arbitration don't outweigh the benefits if they're successful. Arbitrators charge an hourly fee, but their costs may depend on the length and complexity of the case, the number of witnesses and their experience.

What are arbitration clauses in commercial contracts?

Some commercial contracts contain an arbitration agreement or clause, which recommends arbitration in case of a dispute. These clauses may not be compulsory, but they're useful in cases concerning cross-border contracts with businesses in different legal jurisdictions and can avoid unnecessary litigation. If the dispute involves obligations or statutory rights, arbitration clauses are generally opted against by relevant regulations. For example, staff members don't have permission to prioritise arbitration clauses in employment contracts to contract out of their statutory employment law rights. If required, parties can conclude an independent arbitration agreement instead of adding the clause within the contract.

What happens when a party wins a case?

When the case ends, the arbitrator makes the decision to award the claimant or the respondent. The arbitrator then has the authority to decide that the losing party has to pay the fee of the winning party for filing the claim for arbitration, which the parties agree upon during the appointment of the arbitrator. The winning party may also be able to receive interest accumulated on the claim, which they receive from the date of the award until the date that the losing side pays the fees.

What is an arbitrator? (Including skills and responsibilities)