For commercial dispute resolution arbitration has become the preferred solution that provides a fast, efficient and commercially appropriate approach to resolving complicated disputes in a reasonable timeframe.
Although there is some use of arbitration for environmental disputes, court actions have predominated. The advantages of arbitration weigh heavily in favour of an expanded use in resolving environmental disputes. Arbitration clauses could easily be incorporated into remediation and indemnity agreements, agreements of purchase and sale, warranties and consulting agreements.
There are several advantages; first of all an arbitrator with an environmental background either in law or engineering or both is able to assess complicated environmental evidence using a practical approach instead of a purely legal approach to liability. This is a particular advantage in cases where the scope of environmental indemnities is an issue where the quantum of damages depends on expert evidence. Similarly, where mitigation of loss or the use of reasonable mediation strategies are key issues, having an arbitrator with specialized knowledge should create a better damage assessment. An arbitrator with regulatory experience can readily assess the regulatory standards applied in environmental claims and test regulatory risks and compliance.
Furthermore, the parties to an arbitration have the power to have the matter heard privately under confidentiality agreements which protect the environmental elements from outside scrutiny while at the same time providing a full disclosure hearing to the parties. No such similar protection occurs in the courts where all of the evidence, documents and expert reports are public record.
The parties can also adapt the hearing process to their particular needs through case management by the arbitrator who is hearing the ultimate case. In many cases, production of documents and examinations for discovery are done within a framework and time limitations which both minimizes the burdens on the parties but provides an adequate disclosure. Similarly, hearings and, in particular, expert evidence, can be dealt with more efficiently by filing expert reports, reply reports, agreements on issues and proper delineation of the matters in dispute even before the hearing begins. At the hearing itself, evidence in chief is often presented by way of witness statement followed by cross-examination and re-examination. Much of the documentary evidence is often admitted on consent which can also save significant hearing time.
International arbitration awards are more readily enforced in other counties than court awards, even domestic awards are generally enforceable after a simple court proceeding as if they were judgments of the court.
There are still instances however where a court proceeding may be preferable, such as cases where an immediate injunction is required to stop a spill of contamination, or where the parties wish to establish a legal precedent that would be binding in the event of future similar factual situations. However in the vast majority of cases, arbitration is a preferable method of resolving disputes in a timely, efficient and cost effective manner.
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