i-law

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

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