What is the difference between litigation and arbitration; two processes of dispute
\nresolution in South Africa? In this article, I review the basic elements of each as well
\nas the benefits and pitfalls one experiences when going through either. This article
\naims to clarify why you might prefer to use the one means over the other to resolve
\na civil dispute.<\/p>\n
Litigation is a very old process of dispute resolution which takes place in our courts
\n\u2013 whether it be the Magistrates\u2019 or High Court and the respective appeal courts of
\nthose. A Magistrate or Judge presides over the process, hearing each case put
\nforward and delivering a judgment thereafter. Civil litigation is between two parties
\nand criminal litigation is between one (or more parties) and the State. Civil
\nlitigation cases are conducted in a very public forum and the process is formal and
\nhighly regulated. The entire matter is of public record with anyone, including the
\npress, having access to the records that are filed as part of each party\u2019s case.
\nArbitration, on the other hand, is a far less formal mode of dispute resolution that
\ndoes not take place in a courtroom but a venue that the parties choose. An
\narbitration hearing is conducted completely outside the ambit of the courts. Parties
\nin a dispute with one another would proceed to have the matter adjudicated via<\/p>\n
arbitration in terms of a pre-agreement with one another when they contracted
\ninitially (before the dispute arose) or at the time of the dispute, rather than electing
\nto go through the civil litigation process. The parties will agree on the rules and
\nprocesses of the arbitration, for example, when and where it will be held, who the
\narbitrator will be and whether an appeal process is agreed to.
\nAn essential difference between litigation and arbitration is that an arbitrator can
\nbe appointed by mutual agreement and be one who is skilled and experienced in
\nthe subject matter of the dispute, for example, in a building dispute, the arbitrator
\nmight well be an architect or building engineer. This is not the case with civil
\nlitigation, where the Magistrate or Judge is appointed by the State and the parties
\nhave little or no control over their appointment.<\/p>\n
It is also far quicker to get an arbitration hearing than a court date. As soon as all
\nthe parties are ready with their documentation and the availability of their expert
\nwitnesses has been secured, the arbitration hearing can be set down \u2013 on average it
\ncan be a matter of months, with the process being completed within approximately
\nsix months.\u00a0Alternatively, it can take 18 months to two years to get to the trial court
\nin a civil litigation matter. In litigation and arbitration, the timings would obviously
\ndepend on the nature and complexity of the matter.
\nDisputes that are arbitrated are completely private and confidential \u2013 both the
\nhearing and all the documentation involved. One can also add a \u201cconfidentiality
\nclause\u201d into the arbitration agreement forcing both parties to maintain
\nconfidentiality around the entire process.<\/p>\n
In litigation, the judgment of the court can be taken on appeal. With the Western
\nCape High Court for instance, to a full bench of judges, then to the Supreme Court
\nof Appeal and, if still unsuccessful, to the Constitutional Court in certain
\ncircumstances. \u00a0An appeal can add on an additional two years to the final
\ndetermination and outcome of the dispute. Arbitration awards, on the other hand,
\npossess a quality of finality. In general, arbitration awards are final. If the parties
\nagree to an appeal procedure, the arbitration award may be appealed to a bench of
\nthree arbitrators. Even if the matter is appealed, the appeal can be heard as soon as
\na date can be set by the arbitrators and the parties to the dispute. Therefore, even
\nthe appeal in arbitration can be dealt with far more expeditiously than that of a
\nformal litigation process.<\/p>\n
Arbitration is, however, a more expensive route to follow than the litigation
\nprocess. With arbitration, the cost of the venue and arbitrator is covered by the
\nparties themselves, whereas with litigation, the cost of the courtroom, the
\nMagistrate or Judge and other court officials is covered by the taxpayer. Having
\nsaid that, time is money, and the lengthy appeal processes involved could mean a<\/p>\n
turnaround time of approximately four years from inception to final determination
\nof the dispute.
\nIn both litigation and arbitration, having attorneys represent each party is the
\nnorm, and each party calling expert witnesses, a standard \u2013 unless the matter is
\npurely a factual inquiry. With arbitration however, the parties are more in control of
\nthe timing of the proceedings and can therefor better manage the time of their
\nexpert witnesses.<\/p>\n
All in all, litigation and arbitration each have a firm place and function in our legal
\nsystem. The arbitration process has certain advantages over litigation, however,
\nthe cost can be a deterrent.<\/p>\n","protected":false},"excerpt":{"rendered":"
What is the difference between litigation and arbitration; two processes of dispute resolution in South Africa? In this article, I review the basic elements of each as well as the benefits and pitfalls one experiences when going through either. This<\/p>\n","protected":false},"author":80,"featured_media":575,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[98],"tags":[],"class_list":["post-934","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles-published-litigation-and-dispute-resolution"],"acf":[],"yoast_head":"\n