The Law Society Arbitration Scheme – Back to Basics
In its early years, arbitration was envisaged as a fast, private and cost-effective method of resolving disputes that would provide due process while bypassing many of the formal strictures of traditional litigation. However, increasingly long and drawn out proceedings have become common in arbitration, with legal fees spiralling correspondingly.
The question we must ask ourselves is: how can we bring timelines under control and keep costs proportional, particularly for smaller claims?
The Law Society Arbitration Scheme provides an answer to this question, and then some. The highlight of the scheme is the mandatory expedited timeline: arbitrators must render their award within 90 days from commencement for documents-only arbitration, or within 120 days for arbitrations involving a hearing.
In 2018, the Law Society of Singapore will be re-launching the Law Society Arbitration Scheme with comprehensive updates to its rules1http://www.lawsociety.org.sg/Portals/0/ResourceCentre/ArbitrationScheme/pdf/LSAS_Rules.pdf and one clear mission: to provide a platform for fast, flexible, and low-cost dispute resolution.
The revised rules provide for two forms of arbitration, both of which are, by default, expedited processes:
- Documents-only arbitration:
- Applicable where the value of the claim and counterclaim in total (the “Sum in Dispute”) is not more than S$60,000, or where parties agree specifically that the arbitration will be documents-only.
- Such arbitration will proceed without a hearing for the presentation of evidence and/or oral submissions on the merits of the dispute.
- The arbitrator shall, as far as practicable, publish his final award no later than 90 days from the commencement of the arbitration.
- Arbitrations involving a hearing for the presentation of evidence and/or oral submissions on the merits of the dispute:
- Applicable where the value of the Sum in Dispute exceeds S$60,000.
- The arbitrator shall, as far as practicable, publish his final award no later than 120 days from the commencement of the arbitration.
A party that wishes to seek emergency interim relief may also apply at the time of or after the filing of a Notice of Arbitration but prior to the appointment of the arbitrator. An emergency arbitrator would be appointed within two working days and shall make his interim order or award within 14 days from the date of appointment.
The new rules are designed for maximum flexibility and therefore provide for full integration of the mediation process for parties minded to take advantage of multi-tiered dispute resolution, by including a dedicated Arb-Med-Arb Procedure within the rules.
Parties to an arbitration under the revised rules may submit to the Arb-Med-Arb Procedure by agreement upon commencement of the arbitration or at any time prior to the issuance of the final award. The arbitration will be stayed while mediation is ongoing, so a 30 day time-limit is imposed for mediation to ensure the expedited nature of the proceedings is not derailed.
Parties are free to agree on their preferred forum of mediation, such as the Law Society Mediation Scheme, the Singapore Mediation Centre, or ad-hoc mediation.
All arbitrations under the scheme shall be conducted by a sole arbitrator and arbitrator’s fees are fixed.
The arbitrator’s fees (exclusive of GST) are calculated with reference to the Sum in Dispute (claim plus counterclaim) and at present are as follows:
Any application for emergency interim relief shall be accompanied by payment of the non-refundable administration fee of S$500.00 (plus 7% applicable GST) and deposit of S$2,500.00 towards the Emergency Arbitrator’s fees and expenses.A non-refundable registration fee of S$100.00 (inclusive of GST) is payable upon delivery of the notice of arbitration.
A Practical Alternative for Your Clients and for You
The Law Society of Singapore is revamping and expanding its suite of dispute resolution options to provide more cost-effective options for the public as well as opportunities for its qualified members to serve on its panels of mediators and arbitrators.
A faster turnaround of disputes is a particularly attractive consideration in low quantum disputes. In such cases, long and drawn out proceedings are often a losing proposition for both clients and lawyers; clients have to pay more fees than expected, and lawyers often face pressure to give discounts to keep their fees reasonable relative to the quantum claimed.
The revised rules seek to prevent or mitigate this problem, and give the added benefit of confidentiality of proceedings. The award is also enforceable under Singapore law.
All of the arbitrators on the Law Society’s panel of arbitrators 2http://www.lawsociety.org.sg/For-Public/Dispute-Resolution-Schemes/Arbitration-Scheme/LSAS-panel-of-arbitrators are qualified Singapore lawyers with a minimum level of post-qualification experience, and are also fellows of internationally recognised arbitration institutes. Vetting of new applicants to the panel is carried out frequently by the Law Society Alternative Dispute Resolution Committee.
Next time you are drafting agreements or advising your clients on their dispute resolution options, consider offering them the option of fast, flexible, and low-cost dispute resolution by using the Law Society Arbitration Scheme.
Suggested model clauses3http://www.lawsociety.org.sg/For-Public/Dispute-Resolution-Schemes/Arbitration-Scheme/Arbitration-Clause and FAQs4http://www.lawsociety.org.sg/Portals/0/ResourceCentre/ArbitrationScheme/pdf/Frequently%20Asked%20Questions%20on%20LSAS.PDF are available on the Law Society’s website and will be updated from time to time. Please also refer to the Law Society Arbitration Scheme Handbook 2017 for more information.5https://www.lawsociety.org.sg/Portals/0/ForThePublic/PDF/LSAS%20Handbook.pdf
Alternative Dispute Resolution Committee
The Law Society of Singapore