Insight Local Government Lawyer Insight July 2017 19 Thirdly, it must be established that the irregularity has caused or will cause substantial injustice to the applicant. Fourthly, the irregularity must fall within the closed list of categories contained in paragraphs (a) to (i) of section 68 (2). Appeal on a point of law Under section 69 of the Act, a party to arbitral proceedings may challenge an arbitrator’s award by way of appeal on a point of law¹. Permission is required from the court and there is limited scope for challenge. Under sections 69 (3)(c) and (d), the decision of the tribunal has to be obviously wrong or of general importance and open to serious doubt. Additionally, it must be just and equitable in all the circumstances for the court to determine the question. Construction disputes In November 2015, the Royal Institution of Chartered Surveyors (RICS) launched a new arbitration service specifically for construction and engineering disputes. The RICS service aims to allow for a more comprehensive deliberation for complicated disputes compared to the statutory adjudication process, which can often be slapdash in approach. Resorting to litigation is only for the bold, requiring careful navigation of the post-Jackson landscape along with ever increasing court fees. The RICS arbitration service offers two schemes as follows: Fast Track Arbitration Service The Fast Track Arbitration Service is designed to resolve disputes where the value is £100,000 or less. An initial fee of £350.00 is payable to cover RICS’ administration costs for processing an application for appointment. Arbitrators appointed under the Fast Track scheme are subject to capped fees and the parties’ recoverable costs are also fixed. The Fast Track Arbitration Service is a practicable surrogate for disputes that do not come within the compass of adjudication. Adjudication may not be suitable for complex cases that require detailed analysis of the evidence. The Fast Track Service offers an alternative to the “rough justice” of adjudication and concludes in a final and binding decision. Select Arbitration Service The Select Arbitration Service is intended to resolve disputes where the value exceeds £100,000. Unlike the Fast Track Arbitration Service, an administration fee is not required and awards must be published within 12 months. Arbitrators appointed by the Select Arbitration Service are not subject to capped fees. However, they are required to provide an estimate of their fees at the outset which must be updated throughout the duration of the arbitration. The Select Arbitration Service is designed to provide a viable alternative to the Technology and Construction Court, extending benefits in terms of timespans and costs. Issuing a claim in the Technology and Construction Court (TCC)) is not inexpensive. Unlike TCC proceedings, the Select Arbitration Service will be able to complete the procedure within 12 months and the process is confidential. It remains to be seen whether these schemes will prove to be successful. Some commentators have likened it to the 100 Arbitration Procedure by the Society of Construction Arbitrators, which was not widely adopted - this was mainly due to timing as the scheme followed hot on the heels of adjudication in 1998 and many years before the introduction of the Jackson reforms. In both schemes, arbitrators will be selected from a range of appropriate professions including architects, lawyers, engineers and surveyors. Appointments will be made according to RICS Criteria for Inclusion on RICS Panels of Construction and Engineering Arbitrators. Appointees will be routinely assessed to ensure that they are able to manage the arbitration process. In October 2015, the judiciary introduced the Shorter and Flexible Trial Procedure Pilot Schemes which were designed to streamline litigation procedures. Some commentators have argued that the Pilot Schemes corrode the advantages of the RICS services. However the Shorter and Flexible Trial Procedure Pilot Schemes only operate in the courts in the Rolls Building (Commercial Court, Technology and Construction Court, Mercantile Court and the courts of the Chancery Division) until 30 September 2018². Since its introduction in May 1998, adjudication has become the darling of the construction industry, promising a faster and cheaper alternative to both litigation and arbitration. Adjudication is undoubtedly effective when the issues in dispute are simple and can be resolved quickly. However, it does present certain challenges and is not suited to dealing with high value, complex disputes which require forensic examination of the issues, such as Byzantine final accounts. The twenty eight day procedure³ does not give parties sufficient time to set out their case properly and the rapid nature of the process can often lead to “rough justice”. Generally, the adjudicator has no power to award costs unless this is expressly provided for in the contract or the parties agree, although the decision in Lulu⁴ has potentially opened the door to claims for costs. The inability to recover costs is a significant disadvantage – referrals to adjudication should only be made in the most unambiguous cases. Also, the adjudicator’s decision is only temporarily binding pending judicial determination or arbitration. Conclusion Despite certain shortcomings, arbitration remains an effective and useful form of commercial dispute resolution. It is seeing a gradual resurgence in the construction arena where the drawbacks of adjudication are all too apparent to parties dealing with complex disputes. If properly used, it can be a practical alternative to litigation, allowing parties to resolve disputes quickly and efficiently. Ron Cheriyan is a litigation and public law lawyer at the London Borough of Waltham Forest ¹ Section 69 Arbitration Act ² Paragraph 1.2 of Practice Direction 51N of Civil Procedure Rules 1998 ³ section 108 of Housing Grants, Construction and Regeneration Act 1996 ⁴ Lulu Construction Ltd v Mullaley & Co Ltd [2016] EWHC 1852 (TCC) The RICS Fast Track Arbitration Service is designed to resolve disputes where the value is £100,000 or less. The Fast Track Service offers an alternative to the “rough justice” of adjudication and concludes in a final and binding decision.