A feature of arbitration is the opportunity to tailor the procedure to the particular dispute.

In choosing the procedure, fairness and efficiency are obviously to the forefront. But equally important is proportionality. Proportionality pegs the time and cost of an arbitration at a level that will be economic for the parties having regard to the magnitude of their dispute. It would not be economically rational to stage a successful arbitration at a cost which turned out to exceed the sum at issue. Clients prepared to litigate “for the principle of the thing” are to be applauded. Sadly, their enthusiasm usually wanes on seeing the bill.

It follows that at the outset of an arbitration some form of triaging is required to ensure that the procedure to be followed will not be out of proportion to the value of the dispute. The chosen arbitrator will usually suggest the best procedure after considering the nature of the dispute and the amount at stake. Alternatively, the parties may submit their dispute to a dispute resolution institution with rules which distinguish between different kinds and levels of dispute. The New Zealand Disputes Resolution Centre is an example of such an institution.

The table which follows sets out to match the choice of procedure to the value in dispute. It includes suggestions as to the level of arbitrator fees that would be perceived as economic from the parties’ viewpoint. This includes the proposal that for modest to medium level disputes the arbitrator’s fee should be fixed. The parties can then decide in advance whether the game is worth the candle. That concern recedes as the amount in dispute grows – hence the suggestion that above a certain level the fee can be based on an hourly rate. Of course, in practice fees vary greatly from one arbitrator to another.

The tick-marks in the “Up to $50,000” column of the table produce an expedited approach to modest claims. Sequential filing of evidence and submissions from each side by email is followed by an emailed right of reply for the claimant, and then a decision from the arbitrator based on the written material. The arbitrator’s fee is $5,000.

In my experience expedited procedures of that kind work well in practice despite assumptions to the contrary by much of the legal world. For example, it is the process used by the Domain Name Commission (DNC) to resolve disputes over the right to use domain names. Under the DNC rules, the dispute is referred initially to mediation and, if that fails, to “experts” for a binding determination. The complainant and respondent file their evidence and argument sequentially with a right of reply for the complainant. The body of the complaint and response cannot exceed 2,000 words. Strict time limits apply. The expert’s written decision, with reasons, must be given within 10 days of receiving the material. The expert receives a fixed fee of $2,000. The process has worked well over the 13 years since it was introduced.

The table above goes on to suggest more elaborate procedures where more is at stake. For example, where the claim is in the $250,000 to $750,000 category, a detailed timetable is set at a preliminary conference; defended disclosure applications are determined in further conferences; and there is a hearing. Even there, however, the hearing is limited to one day and time limits govern each party’s presentation. Above $750,000 those constraints no longer apply.

In every case the procedures suggested in the table amount to no more than the default which applies unless the parties or arbitrator seek otherwise. Further, the table does not purport to set out the detailed process for larger or more complex arbitrations. These will be the subject of a further article.

Robert Fisher QC www.robertfisher.co.nz is a member of Bankside Chambers, a former High Court Judge and the author of Fisher on Matrimonial Property. Since leaving the bench he has been in full-time practice as an arbitrator and mediator.