International Construction Law Review
THE PRIVATISATION OF JUSTICE: IS ARBITRATION IMPACTING THE DEVELOPMENT OF AUSTRALIAN CONSTRUCTION LAW?*
Paul Tamburro
Senior Associate, Vinson & Elkins LLP
I. INTRODUCTION
While arbitration has a long history in the construction industry and brings several benefits to parties, this essay considers, from an Australian perspective, whether its predominance has some negative consequences, in particular by impacting the ordinary development of the common law.
Recently, several senior judges and practitioners from around the world have expressed particular concern that the increasing predominance of arbitration, together with the removal of a right to appeal arbitral awards, is removing large classes of disputes from the courts.1 If the most complex construction law cases, which raise novel questions of law, are removed from the courts, then the lost jurisprudence will mean that the common law could lose one of its inherent strengths: its vitality in keeping up with contemporary trends. Also lost are some of the public benefits of litigation, including that it allows for the public to scrutinise and understand legal decisions.
While this issue arises in other areas of commercial law, it is most evident in the area of construction. In a recent Australian report, approximately 80 per cent of all arbitrations commenced in Australia were in the field of construction.2 Construction cases also make up a large part of the workload of many major international arbitral intuitions.3
* This paper was awarded highly commended by the Society of Construction Law Australia in the Brooking Prize essay competition.
1 See, e.g., McLachlin, B, “Judging the Vanishing Trial in the Construction Industry”, (2011) 5(2) Faulkner Law Review, 9; Lord Thomas, “Developing Commercial Law through the Courts: Rebalancing the Relationship between the Courts and Arbitration”, (Speech delivered at the Bailii Lecture, London, 9 March 2016, https://www.judiciary.uk/wp-content/uploads/2016/03/lcj-speech-bailli-lecture-20160309.pdf (last accessed 7 February 2023)); Menon, S, “Arbitration’s Blade: International Arbitration and the Rule of Law” (2021) 38 Journal of International Arbitration, 25–33; Lord Neuberger, “Arbitration and the Rule of Law”, (Speech delivered at Chartered Institute of Arbitrators Centenary Celebration, Hong Kong, 20 March 2015).
2 Australian Centre for International Commercial Arbitration (ACICA), “2020 Australian Arbitration Report”, (9 March 2021), https://acica.org.au/wp-content/uploads/2021/03/ACICA-FTI-Consulting-2020-Australian-Arbitration-Report-9-March-2021.pdf (last accessed 7 February 2023).
3 Jus Mundi Blog, “Construction Arbitration Report 2021”, (20 October 2021), https://blog.jusmundi.com/wp-content/uploads/2021/10/Construction-Arbitration-Report-20-Oct-2021.pdf (last accessed 7 February 2023).
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