The County Court Of Victoria Has Introduced A New “Arbitration List”. What Does It Mean For Litigants?
The County Court of Victoria has recently issued its Commercial Division Omnibus Practice Note (PN). The PN has, among other things, created a new specialist list called the “Arbitration List”. The Arbitration List facilitate the voluntary referral of appropriate commercial proceedings to arbitration. How the list works and what this means for litigants is explained below.
The purpose of the Arbitration List
The purpose of the Arbitration List is two-fold. First, it is the appropriate list for proceedings in court that are (alleged to be) subject to a pre-existing arbitration agreement, in which case the dispute will likely be referred from the list to arbitration. In other words, where the parties have previously agreed that disputes between them should be arbitrated, not litigated, the court will (ordinarily) uphold that agreement and so ensure that the arbitrator, not the court, will hear and determine the dispute.
Second, and importantly, matters in the Arbitration List may be referred to arbitration by agreement (i.e. in circumstances where no pre-existing arbitration agreement exists, but the litigating parties agree to arbitrate their dispute instead of having it resolved by the Court). The PN states that the Court “may encourage” litigants in the County Court where “the dispute needs to be resolved quickly” or the “amount claimed is small” to agree to refer the dispute to arbitration.
The Court has the power to refer matters to arbitration under s 66(1) of the Civil Procedure Act 2010 (Vic). However, the referral to arbitration must be made with the consent of the parties. What this means, in a nutshell, is that if the parties agree, then an arbitrator, not the court, will be the person who decides the outcome of the dispute.
County Court’s referral to Arbitration Information Sheet
The County Court also has published an information sheet on its website https://www.countycourt.vic.gov.au/going-court/commercial-division/management-and-lists/arbitration-list which helps explain the process by which matters are referred to Arbitration. In the information sheet, the County Court explains that litigants may agree to refer their disputes to arbitration in circumstances where there may be advantages in doing so including:
- the dispute needs to be resolved quickly [claims can be fully resolved by arbitration in 3-4 months];
- confidentiality may be of concern [arbitration is confidential – Court hearings are public];
- flexibility would assist [including where the litigants live in remote areas or have other commitments or demands – arbitration can have a more flexible hearing schedule];
- the amount claimed is small [arbitration can be cheaper than litigation].
Arbitration schemes for disputes referred to arbitration
Litigants are at liberty to choose their arbitrator, and the rules under which any dispute referred to arbitration will operate. However, the County Court has identified three arbitration schemes that may be appropriate for lower-value disputes (say disputes which are for amounts less than $250,000). These are the schemes offered by:
- Arbitration Victoria: www.arbitrationvictoria.com
- Resolution Institute: https://www.resolution.institute/resolving-disputes/county-court-of-victoria-arbitration-scheme.
- Victorian Commercial Arbitration Scheme (VCAS): https://vcas.net.au/
Each of the above schemes offers a choice of arbitrators, their own set of arbitration rules, capped fees for arbitrators, confidentiality, expedited timeframes for the resolution of disputes, flexibility and certainty (given that arbitral awards are enforceable in court).
Arbitration is used around the world to resolve commercial disputes. With the right arbitrator, arbitration can provide a genuine alternative to litigation, and it can deliver quicker, cheaper, confidential, and more flexible justice. The County Court should be applauded for taking the lead in encouraging litigants to consider arbitration in the resolution of their disputes.
Adam Rollnik 29 October 2022