Arbitration and the Disputes Tribunal
The Disputes Tribunal provides a means of settling disputes in a way that is much faster and a lot cheaper than the standard court system. This is done through what is known as the Small Claims Tribunal. This Tribunal is very informal whereas the court system is formal. The parties will present their own cases at the hearing before a Tribunal referee and no lawyers are permitted to attend.
The referee will hear the case that each party presents before making a judgement. There is a limit on the size of the amounts and the claims that a Tribunal will accept. You can hear claims for up to $7,500 but unless both parties agree, it cannot be increased beyond $12,500.
What Kind of Disputes does the Tribunal Hear
The Disputes Tribunal can be used to:
- Resolve disputes between people for all sorts of reasons (e.g. boundary dispute with neighbour).
- To recover a debt that is under dispute (it can not be used to collect a debt if there is no dispute).
- To claim for damages to ones property.
- To enforce ones rights under the Consumer Guarantees Act against suppliers of defective goods or inadequate services.
The Tribunal cannot deal with disputes about wills or land or with family issues such as matrimonial property or custody of children. These are dealt with adequately under their own area within the court system. You cannot bring a claim to the Tribunal if the events have happened more than 6 years prior.
Taking a Dispute Problem to Arbitration
The first step in a dispute is to inform the other party that there is a problem that requires to be sorted out. Generally, one party will, through their lawyers, inform the other party of the grievance and of any damages or compensation being sought.
A demand letter is usually sent from one party to the other which will set out the controversy and often propose a method of resolution. One of the methods may be to submit the dispute to an arbitrator.
If informal negotiations fail to yield a satisfactory conclusion then the parties may agree to participate in arbitration. If all the parties agree, then arbitration will be conducted. The initial step is to select the arbitrator who will then advise the parties about the procedures that have to be followed.
Many contracts require parties to submit any disputes that arise to arbitration. This practice comes under the Arbitration Act 1996. If you are looking at arbitration it is a good idea to make yourself aware of all the facts relevant to the dispute and then establish the issues in the dispute so that the arbitration can settle the matter clearly. You will also need to look at your case and this will include witnesses that you believe need to be there to present your side of the action.
How Is the Arbitrator Determined?
You will need to agree first with the other party to go through arbitration, and then to agree on whom the arbitrator will be. The subject matter of your dispute will determine to a great extent who you should appoint as a suitable, qualified arbitrator.
If it is to do with construction then it should have someone that is perhaps a member of the Master Builders Association or has extensive experience in the building industry. If it is a business issue then a suitable arbitrator may be someone who is a member of the Accountants Society or a qualified adviser in the business area of dispute.