Disputes not resolved as Arbitration (Scotland) Act comes into force

The Arbitration (Scotland) Act 2010 came into force on 7 June 2010.  While generally welcomed in the legal media, a modicum of controversy was sparked by a dissenting voice from within Edinburgh law firm Tods Murray.

An article on the Tods website, written by Charles Brien, a senior associate of the firm, suggested that the Act deprived arbitration of its flexibility and would (should?) do more to encourage people to resolve their disputes by means of mediation.  This view was strongly criticised by, inter alia, John Campbell QC, in a letter to Scottish Legal News published on 7 June.  Mr Campbell admitted to having been a Tods Murray apprentice three decades ago, then continued:

Openness of mind and thorough attention to detail were the watchwords of the day, but I fear that Mr Charles Brien has exhibited neither. I beg leave to doubt if he has read the Act. His assertions are vigorous, but regrettably wrong. In the Tods Murray spirit, he should know that thanks to the hard work and diligence of a long list of passionate enthusiasts for the subject, Scotland now has a world-leading Arbitration Code, the envy of both civilian and common-law systems. The law and the (mostly optional) Rules can all be found in one place for the first time ever, anywhere in the world.

Mr Brien says "Arbitration provided a framework in which both parties could choose the rules, but this changes with the new Act. The Act brings in a 'one solution fits all' approach…." No it doesn't, Mr Brien. It does precisely the opposite: if one reads s.9, for example, he will see that the great majority of the Rules in the Act are optional; contrary to his erroneous assertion, the Act is highly flexible and could accommodate the entire spectrum of disputes, from one between (for example) BP and the US Government, to one between a householder and her plumber, the latter using the Chartered Institute of Arbitrators’ Scottish Short Form Arbitration Rules, developed to provide a simplified arbitration procedure appropriate to consumers and small businesses. They are written in simple, non-legal English and even have footnotes to assist any reader.

The Scottish Act of 2010 defines confidentiality and the right to the privacy of the process; it fosters and enhances party-autonomy; it limits the role of the Court to a small class of possible appeals; it enjoins speed, economy, confidentiality and accuracy on all participants, and it knocks the well-loved English Act of 1996 into a corner in at least four other key respects. It allows parties, furthermore, to adopt whatever rules or style of arbitration they want. … The law gives parties a default appointment process (nobody says the arbitrators have to be Scots); a supportive (but not interfering) court system, decent and good value lawyers; an obligation to "get on with it"; and the nicest country and some of the best people in the world. The Act has been hailed by overseas colleagues in this field as a triumph and a legislative milestone.

But Mr Brien came back strongly in Scottish Legal News on 11 June, saying –

There may be flexibility, but you have to draft that into your arbitration agreement or agree it with your opponent at the one time when you are most likely not to be on speaking terms. Arbitration clauses were historically very short but now you are confronted with the default rules (all 48 of them) into which you have to draft levels of detail in a manner which you simply did not do previously.

The disputants challenged each other to a debate (rather than an indubitably inappropriate duel) to take place in Tods Murray premises, with Mr Brien offering mediation as the way to determine the motion to be debated; but your correspondent’s departure on holiday shortly after Mr Brien’s response means that he is not quite sure what happened next.  Further intelligence welcomed. 

For what seems to have been a pretty positive assessment of the Act by practitioners at a conference in the Edinburgh Law School on 23 June, see here