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Arbitration is an adversary process whereby an independent third party (or parties) chosen by the parties makes an award binding upon the parties after having heard submissions from them. Arbitration is a private process. Although the parties have considerable freedom in determining the scope and nature of an arbitration, commercial arbitration is subject to legislation and court review.


A mini-trial is a structured exchange of information to facilitate informed, realistic negotiation. It has been developed for particular application in commercial or business disputes between corporate entities. The five distinct characteristics of a mini-trial are the involvement of senior management, restricted time for the conduct of the mini-trial, an informal hearing, non-binding discussions and receiving comments from a neutral advisor.


In this process the third party acts firstly as a mediator, and then, if the proceedings break down, as an arbitrator. This method is favoured by those who believe it leads to efficiency. The same person will know what the argument is about and will be able to hear evidence and choose that which is relevant more quickly. The problem with this system is that a party who knows that the mediator may become an arbitrator may be reluctant to give information which may lead to a mediated settlement, but which would be damaging if the case were to be arbitrated. It the arbitrator knows the lowest amount that a party will settle for, there may be a temptation to award that amount. The arbitrator will have confidential information and untested evidence from one party to put out of mind before considering the case.

The key issue here is whether or not during the mediation process the third party who fails to reach an agreement and subsequently resumes as an arbitrator in the same dispute, can do this without infringing the rules of natural justice ?

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