3 Arbitrations
What the draft Bill provides
for
49. The draft Bill would make the Adjudicator or
their appointee the designated arbitrator of disputes under GSCOP.
Clauses 2 and 3 set out duties and functions of the Adjudicator
in relation to arbitration.
Discussion and conclusions
50. In its Response to Consultation, the Government
summarised the concerns of retailers in relation to the Adjudicator's
arbitration functions:
All of the retailers expressed concern over the
arbitration function where the body's suitability to rule on a
complaint might be called into question if the body had already
determined there were grounds for investigation and success in
arbitration.
There were further concerns that such a power
could provide incentives for parties to make speculative complaints
or threats to retailers in the hope of obtaining improved commercial
terms. There was also a danger of suppliers being encouraged by
professional consultants to bring cases on a no win, no fee basis.[40]
51. Clause 2(1)(b) of the draft Bill states that
the arbitrator can: "appoint another person to arbitrate."
The Explanatory notes to the draft Bill provide further detail
:
[…] the Adjudicator could appoint another
person where a conflict of interest may exist (for example where
the Adjudicator has previously advised on or investigated an issue
which is relevant to the dispute) […]. [41]
52. The draft Bill therefore provides the Adjudicator
with the means to avoid conflicts of interest by appointing alternatives
if necessary.
53. As mentioned, there was concern that suppliers
might be encouraged to initiate disputes by professionals operating
on a 'no win, no fee' basis. However, we are not convinced that
these concerns are of greater significance than for any other
dispute resolution system. The Department clarified the position
on the use of 'no win no fee' arrangements, stating that:
[…] we do not think that the Order provides
any great spur to a "no win, no fee" culture […]
The fact there have been no known arbitrations to date seems to
support that conclusion.[42]
54. We conclude that the provisions in the draft
Bill relating to arbitration and potential conflicts of interest
of the Adjudicator are satisfactory and provide the necessary
safeguards.
40 Paragraphs 3.5-3.6 Back
41
Paragraph 25 Back
42
Response to question 2, at paragraphs (i)-(j) Back
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