ARBITRATION TACTICS ......

Problem: A builder, who had renovated a 17th Century cottage using 17th century materials and work skills, where possible, was paid £37,000 of the £40,000 quoted costs, by interim payments, as the job was progressed. When the job was completed, the owner claimed the builder had overcharged him and demanded a substantial refund. The builder's solicitor agreed to arbitration on any defect work as provided for under the terms of the contract signed by his client. The arbitrator extended his terms of reference to cover ALL aspects of the contract and sent copy agreements to both parties for signature but the builder refused to sign and the arbitration proceeded on the assumption that the variation was acceptable; the builder was faced with overpowering complex legal arguments put forward by specialist "building litigation" lawyers within a bulky report; since legal aid is not available for arbitration, the builder tried to conduct his own defence but did not have the mental capabilities or the funds to pay to be represented and put up a credible defence, he turned to us in desperation.

Solution: Since the builder had not signed the agreement to extend the Arbitrators terms of reference, only an "Oral Agreement to Arbitrate" existed. If this could be successfully argued and the arbitration limited to defective work only as per the contract, ( minimal portion of the claim since work was of the highest standard), then the other aspects would have to be determined by the courts and the builder would thus qualify for legal aid. With the written permission of the copyright holder, sections of "The Handbook of Arbitration Practice" were photocopied and submitted to the arbitrator as submissions to prove that an "Oral Agreement to Arbitrate did indeed exist"; the other side did not wait for any ruling, they withdrew all claims and paid all arbitration expenses involved on the understanding that neither party would pursue any other claim against the other.

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