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Using arbitration to solve your consumer problem

This advice applies to England

Arbitration is one way of settling a dispute between you and the trader without having to go to court. Both you and the trader have to stick to the terms of the decision and pay any money you owe.

The arbitrator's decision is final. If you don’t agree with it, you won't be able to take your case to court.

This page tells you when you can go to arbitration and what will happen.

When can you go to arbitration?

You must complain directly to the trader before you go to arbitration. Usually you need to wait eight weeks from when you put your complaint to the trader before you can go to an arbitration scheme. You can go to arbitration earlier if you already have a letter of deadlock from the trader. A letter of deadlock says that you and the trader have been unable to agree on a solution to your problem.

Does your contract say you must use another scheme first?
Your contract with the trader may say you have to try another form of alternative dispute resolution, such as conciliation or mediation, before you use arbitration. Conciliation and mediation are less formal than arbitration but they're not always independent.

Why use arbitration?

Arbitration is worth considering if you are claiming more than the small claims limit or in Scotland the simple procedure limit because it will usually be cheaper than going to court.

If you're claiming less than the small claims limit, or simple procedure limit in Scotland from 28 November 2016, you can't be forced to use arbitration. In some cases, making a small claim might be a cheaper way to solve your problem. It can also be a quicker process.

Arbitration may be worth considering if:

  • you already know how much you’re claiming for and this amount won’t get any higher
  • your case is simple and can be easily explained on paper. This is because the outcome of arbitration is usually decided after reading the evidence you’ve sent in. If your case is hard to understand or the trader might strongly disagree with you, you may want to think about taking court action instead
  • you’re not confident about going to court and there is no other way to solve your problem
  • you don’t want to have to go to court because it’s inconvenient or too expensive to travel there
  • you have witnesses who are willing to give evidence to support your case. Only courts have the power to make a witness give evidence, so if they are reluctant to help you, you may have to think about going to court instead
  • you are claiming more than the small claims limit of £10,000 because the costs of arbitration are lower than going to court. If you lose a case in court, you will also have to pay the trader’s legal costs
  • you have a strong case and know the trader can afford to pay but is unwilling to do so. The trade association can put pressure on the trader to make sure they pay you what they owe you, so you can avoid having to go to court to make them pay up.

How much will it cost?

Some arbitration schemes are free. Others charge a fee to make the application for arbitration. How much you pay will depend on how complicated your case is and whether it can be dealt with without a hearing. Most cases are dealt with on paper, without you attending a hearing. The trade association will be able to give you a list of the most up-to-date fees.

If you win your case, your application fee is usually refunded. If you lose the case, you may have to pay the trader's application fee but you won't have to pay any of the costs they ran up preparing their defence.

How much can you claim?

There is an upper limit to the amount you can claim but it’s usually more than the maximum amount of £10,000 you could claim if you went to the small claims court. You should check the limit with the trade association.

If you're claiming more than £10,000, you may want to consider taking the case to court. If you do, your case will usually be allocated to the fast or multi-track. This is designed for higher value claims. If you do this, you may need the help of a solicitor.

How long will it take?

You should usually get a decision from the arbitrator within three months of making your application. It can take longer if there are hold ups, for example you or the trader is slow in sending in evidence.

Next steps

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