This is a specialisation of Alternative Dispute Resolution practice area

Understanding Alternative Dispute Resolution: Arbitration in New Zealand

Alternative Dispute Resolution (ADR) is a way to solve disagreements without going to court. One of the main types of ADR is called arbitration. In New Zealand, arbitration is a popular choice for resolving disputes, especially in business and commercial matters.

What is Arbitration?

Arbitration is like a private court. Instead of a judge, there is an independent person called an arbitrator who listens to both sides of the argument and makes a decision. This decision is usually final and must be followed by both parties.

How Does Arbitration Work?

Here’s a simple example: Imagine two businesses in New Zealand have a disagreement over a contract. Instead of going to court, they can agree to use arbitration. They choose an arbitrator, who is an expert in their field. Both businesses present their case, share evidence, and explain their points of view. After considering everything, the arbitrator makes a decision that both businesses must accept.

Why Choose Arbitration?

There are several reasons why people in New Zealand might choose arbitration:

Speed: Arbitration can be quicker than going through the court system, which can take a long time.
Cost: It can be less expensive than a court case, saving money for both parties.
Confidentiality: Unlike court cases, which are public, arbitration is private. This means sensitive information stays out of the public eye.
Expertise: Parties can choose an arbitrator with specific knowledge about their industry, ensuring a fair decision.

Arbitration in New Zealand Law

In New Zealand, arbitration is governed by the Arbitration Act 1996. This law provides a framework for how arbitration should be conducted, ensuring fairness and clarity. It also allows parties to agree on the rules and procedures that will be followed during the arbitration process.

Conclusion

Arbitration is an effective way to resolve disputes in New Zealand, especially for businesses. It offers a faster, cheaper, and more private alternative to traditional court proceedings. If you find yourself in a disagreement, consider whether arbitration might be the right choice for you.