The new Arbitration (Scotland) Act 2010 names a number of Arbitral Appointments Referees, one of which is RICS Scotland Dispute Resolution Service (DRS).

RICS Scotland is the largest dispute resolution provider in Scotland for property and construction disputes and appoints RICS professionals to over 500 dispute applications each year.

The main issues of dispute are rent review although we do also deal with arbitrations in the construction and building sector. We also appoint adjudicators under the Scheme for Construction Contracts (Scotland) Regulations 1998.

We can deal with anything from  building disputes to agricultural disputes, residential neighbour dispute or just simple valuations. Rent review disputes are varied and many and can be anything from an office building to a shopping centre, a funeral parlour to a telecommunications mast or the local corner shop.

RICS Scotland has certainly seen a decline in arbitration appointments over the last 15-20 years and therefore, it is hoped that the new Act will instil confidence in the market to use arbitration. 

The use of arbitration will also free up the court system which is already creaking with an abundance of disputes which could have been resolved without the need for court action. Prior to the new Act, Arbitration was not regarded as an attractive form of dispute resolution in Scotland because it was generally considered to be slow, complex and expensive and Arbitrators decisions were based mainly on Case Law and the 1894 Act.

Will it make a difference to RICS Scotland to be an Arbitral Appointment Referee?

Not sure if it will in the short term. I think that it will take some time for people to begin to use the arbitration process again.  Prior to and throughout the early 1980’s there were lots of arbitration appointments for chartered surveyors, especially those in the construction industry. Many of these arbitrations took years to come to fruition and this of course resulted in the Scheme for Construction Contracts (Scotland) Regulations coming into force in 1998.

This allows parties to a dispute to exercise the right to adjudication and have a resolution within 28 days of referring the dispute. Following changes to Part II of the Housing Grants, Construction and Regeneration Act 1996 the Government currently have a consultation document seeking views on various aspects of the Scheme  including consequential amendments and supplementary proposals to improve the effectiveness of the Scheme. 

The consultation document also seeks views on whether any additional amendments to the Scheme are required in order to improve its operation in practice. It is uncertain whether amendments to the scheme will encourage parties to choose adjudication over arbitration. I know that Scottish Building Contract Committee Limited, the vehicle for producing building contracts for the market in Scotland, are making reference to the new Arbitration (Scotland) Act in their contract documentation.

This will inevitably lead to the use of the new Act. I do, however, feel that it may take a number of years before we see significant increases in arbitration cases. From the point of view of RICS Scotland, I don’t see any real change in the process of appointing Arbitrators. The list of Arbitral Appointments Referees is such that it does cover a wide variety of dispute types. Traditionally, construction disputes have come to RICS and other types of disputes have gone to the appropriate body i.e. legal issues to the Law Society and engineering disputes to the Institute of Civil Engineers. 

The only difference now is that these organisations are named in the legislation. With particular regard to Rent Reviews, most leases make reference to the Chairman of RICS Scotland making the appointment of an Arbitrator/Expert to set the rent. Therefore, these reviews would not necessarily come via the Arbitral Appointment Referee route. The Scottish Government required the Arbitral Appointments Referee to demonstrate that there is in place a programme of  training and assessment of Panel Members. 

This was a pre-requisite to being named as an Arbitral Appointments Referee. Of course, RICS Scotland already have this in place and are constantly striving to improve procedures and training for members of the Chairman’s Panels. I am not sure if the Scottish Government plans to review these procedures to ensure that Arbitral Appointments Referees continue to keep their members up to date with training and developments on arbitration. 

At the present time, the market is driven by the economic climate and the lack of any, or very little, construction work in Scotland. This will of course have an impact on arbitration in the construction industry at the present time. I suggest that it will take some time before we see the volume of arbitrations which were around in the 1980/90s. 

RICS Scotland Dispute Resolution Services provides alternative dispute resolution to a wide range of customers with differing needs and expectations and we have an experienced team of dispute resolvers.  The property and construction industries rely on the expertise of our dispute resolution professionals, along with clients from landlord and tenant groups, central and local governments, the legal profession and the general public.

The RICS Scotland Panel of dispute resolution professionals is made up of RICS members with specialist experience in the full range of operational areas, skilled in dispute resolution procedures.  The pool of expertise enables DRS to make the right appointment for our customers to effectively respond to their dispute needs."

Jasmine Sneddon, Head of Dispute Resolution Service, RICS Scotland
For further information

Jasmine Sneddon
RICS Scotland Head of Dispute Resolution Service
t + 44 (0)131 240 0832
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