Arbitration
A private way to settle a dispute, where a neutral person chosen by both sides makes a decision that is usually binding.
Definition
<strong>Arbitration</strong> is a private dispute resolution process in which one or more arbitrators hear the evidence and arguments and make a binding award. Legal arbitration is usually agreed in advance — often in a contract clause — and produces an outcome that can be enforced by the courts. It is distinct from mediation: the arbitrator decides, the mediator helps the parties decide.<p>The arbitration meaning in law refers to a formal alternative to court litigation governed by the <a href="https://www.legislation.gov.uk/ukpga/1996/23/contents" target="_blank" rel="noopener noreferrer">Arbitration Act 1996</a>. Arbitration law in England and Wales is internationally recognised for its neutrality and efficiency. Arbitration disputes are heard by an arbitrator (or panel of arbitrators) chosen by the parties or appointed by an institution such as the London Court of International Arbitration (LCIA). The arbitrator's decision (the "award") is final and binding, subject only to limited rights of appeal or challenge under the Act. Courts will generally enforce arbitration awards and stay court proceedings where a valid arbitration agreement exists.</p>
In practice
Check your contract for an arbitration clause before starting court proceedings — if one exists you may be required to use arbitration first.