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The BusinessArbitrationScheme(BAS) CHARTERED INSTITUTE OF ARBITRATORSTHE BUSINESS ARBITRATION SCHEME (BAS)

The BusinessArbitrationScheme(BAS)1

Chartered Institute of Arbitrators12 Bloomsbury SquareLondonUnited KingdomWC1A 2LPT: 44 (0)20 7421 7444www.ciarb.orgE: info@ciarb.orgThe Chartered Institute of Arbitrators is a learned society that works in the publicinterest to promote and facilitate the use of Alternative Dispute Resolution (ADR)mechanisms. Founded in 1915 and with a Royal Charter granted in 1979, it is a UK-basedmembership charity that has gained international presence in 133 countries and has morethan 14,000 professionally qualified members around the world.All rights are reserved. No part of this publication may be reproduced, stored in aretrieval system or transmitted in any form or by any means, electronic, mechanical,photocopying, recording or otherwise, without the prior permission in writing of theChartered Institute of Arbitrators. Enquiries concerning the reproduction outside thescope of these rules should be sent to the Chartered Institute of Arbitrators’ Departmentof Research.Registered Charity: 8037252

What is BAS?Key Benefits of BASIn the current climate of rising court fees, businesseshave been seeking alternative forms of disputeresolution for a quicker and cheaper method ofresolving their disputess Certainty of costs: the fixed fee scheme givesparties ease of mind.The Business Arbitration Scheme (BAS) has beendeveloped by the Chartered Institute of Arbitrators(CIArb) to provide simple, cost-effective, and timelyresolution of disputes of low to medium monetaryvalue ( 5,000- 100,000) before a sole arbitrator.s Formal procedural steps are kept to aminimum.The scheme is operated by CIArb’s DisputeAppointment Service (DAS) and aims to provideparties with a final, legally binding decision on theirdispute in less than 90 days from the appointmentof the arbitrator, by adopting the simplest proceduretailored to match the dispute in question.s Speed: the award is issued in under 3 months.s Simplicity: the scheme is simple enough toallow most businesses to present their owncase without legal representation, and theamount recoverable has been limited to 1,000 to dissuade parties from incurring highlegal costs.s Confidentiality: the process is private andconfidential.s An award has the same effect as a courtjudgment.Key Features of BASs BAS is aimed at low to medium value disputes,where the amount claimed is from 5,000 to 100,000.s In a survey by the Institute of UK Fellows andsmall business owners:s 94% found the scheme to be an attractiveproposition for small businesses involved inlow to medium value disputes;s A fixed fee of 1,250 VAT is payable by eachparty on commencement of the arbitration,to cover DAS’s administrative costs and thearbitrator’s fees.s 93% found the cost of the schemeappealing;s 98% found the short timetable of benefit;s A sole arbitrator will be appointed by theChairperson of the Applicant’s Local Branchof CIArb, within 10 days of commencement ofthe arbitration.s 96% found the scheme easy to understand.s The statement(s) of case and witnessstatements shall not exceed 5,000 words.s A successful party may not recover morethan the fixed fee paid by them plus a further 1,000 towards their costs of the arbitration.s The arbitrator will issue an Award in less than90 days of their appointment.3

The Business Arbitration Scheme Rules1. These Rules apply to arbitrations under TheBusiness Arbitration Scheme (the Scheme).The Scheme has been developed to providesimple, cost-effective and timely resolution ofdisputes by a sole arbitrator, for a fixed fee,provided that any monetary claim is of low tomedium value ( 5,000 - 100,000). copy of the Application, and all accompanyingAdocuments, should be sent by the Applicant to theRespondent, simultaneously, by courier. DAS retainsthe right to refuse to register an Application if anyof the requirements in paragraphs 3 and 4 are notcomplied with.5. Within 7 days of the commencement of thearbitration, the Respondent should send:(a) a fee of 1,250 (plus VAT) per Respondent,payable by cheque or bank transfer; and2. The object of the Scheme is to provide theparties with a final and legally binding decisionon their dispute in less than 90 days from theappointment of the Arbitrator, by adopting thesimplest procedure appropriate to the dispute.3. An arbitration is commenced when the DisputeAppointment Service (DAS) of The CharteredInstitute of Arbitrators (CIArb) receives arequest for the appointment of an Arbitrator(the Application). The Application shouldcontain details of the parties, a brief summaryof the dispute and the issues to be determined,and an outline of the relief sought. A copy of theApplication form is attached to these Rules. Ifthere is no contractual agreement between theparties to refer disputes to arbitration under theScheme, the Application should be signed byeach party to the dispute.4. The Application should be accompanied by thefollowing:(a) copies of relevant contractual documents,including, in the case of a unilateralApplication, a copy of the contractualagreement between the parties to refer theirdispute to arbitration under the Scheme;(b) a copy of the Applicant’s Statement of Claim(subject to paragraph 11 below); and(c) a fee of 1,250 (plus VAT) per Applicant,which is payable by cheque or bank transferon or before the date of the Application.4(b) to DAS and to the Applicant, a Statementof Defence (and Counterclaim, if applicable)(subject to paragraph 11 below).6. If a counterclaim is advanced by the Respondent,but the Respondent fails to pay the fee requiredunder paragraph 5, and/or under paragraph 12(if applicable), the Respondent’s counterclaimmay be treated by the Arbitrator and by DAS aswithdrawn.7. Failure by the Respondent to pay any or all ofthe fee required under paragraph 5, and/orparagraph 12 (if applicable) may result in DASdirecting the Applicant to pay the remainderof the fee due. Any payment made by theApplicant on behalf of the Respondent will betreated as a debt which the Applicant is entitledto recover immediately from the defaultingRespondent.8. If a counterclaim is advanced, with theRespondent’s payment of the fee underparagraph 5, and the value of the Applicant’sclaim and the Respondent’s counterclaimtogether exceeds 150,000, DAS will refer thedispute for determination under its ControlledCost Arbitration Rules.9. The Arbitrator will be appointed by theChairperson of the Applicant’s Local Branch ofCIArb from a Branch approved panel within10 days of commencement of the arbitration,and the Arbitrator’s details will then benotified to the parties. In the absence of theChairperson, the Branch Secretary may makethe appointment, or in the event of a conflict ofinterest, the President of CIArb may make theappointment, from the Branch approved panel.

10. The Arbitrator will issue a timetable for thearbitration within 7 days of being appointed. Allprocedural matters are at the discretion of theArbitrator. Any timetable issued by the Arbitratorshould meet the objective of the Scheme,and meet the 89 day deadline prescribed inparagraph 14 for the issue of an award.11. The statements of case (e.g. the Claim, Defence,and Response) must each be signed and datedby a duly authorised representative of theparty concerned. All witness statements mustbe signed and dated by the witness. Unlessotherwise directed by the Arbitrator: (i) eachside’s statements of case and witness statementsshall, collectively, be no more than 5,000 words;and (ii) if a hearing is to take place, the hearingbundle shall not exceed one A4 lever arch file.12. Each party may be directed by DAS tomake an additional payment following theissue of the procedural timetable if either offollowing applies.(a) Half-day Hearing or Meeting: If theparties require a half-day hearing ormeeting with the Arbitrator, an additionalfee of 500 (plus VAT) per party will bepayable. This additional fee does not includethe cost of a venue for the hearing ormeeting, the Arbitrator’s expenses for thehearing or meeting, or any other expensesassociated with the hearing or meeting.(b) Site Visit: If a half-day site visit is required,in order for the Arbitrator to betterappreciate the matters in dispute, anadditional fee of 500 (plus VAT) per partywill be payable. This additional fee does notinclude the Arbitrator’s expenses, or anyother expenses, associated with the site visit.13. It is for the Arbitrator to decide if one sidecan recover from the other any costs of thearbitration, which includes the fixed fee andreasonable legal fees. Unless the parties agreeotherwise, one side shall not recover more thanthe fixed fee paid by them plus a further 1,000towards their costs of the arbitration.14. Within 89 days of the Arbitrator’s appointment,the Arbitrator will issue to the parties awritten reasoned award. The award will besigned and dated by the Arbitrator, and willbe final and legally binding. The Arbitrator will,simultaneously, send to DAS a copy of his award,together with an invoice of his charges. Uponreceipt of that invoice, DAS will release to theArbitrator his fee.15. If the parties settle their dispute aftercommencing the arbitration, they mustinform DAS and the Arbitrator, if appointed,immediately. In the event of settlement after theArbitrator has been appointed, DAS will releaseto the Arbitrator his fee, upon receipt of theArbitrator’s invoice.16. The Arbitration Act 1996 (The Act) or anyamendments to the Act, or alternative substitutelegislation, shall apply to the arbitration, and theArbitrator shall have all the powers available toan Arbitrator under that Act.17. All communications will be in writing andany correspondence which a party sendsto the Arbitrator, or the Arbitrator sends to aparty, must be copied to the other party at thesame time.18. Neither CIArb nor any of its officers, agents,or employees will be liable for anything doneor omitted to be done in the appointmentor nomination of an Arbitrator under theScheme or in respect of the administration ofthe Scheme, unless the act or omission wasshown to be in bad faith. Neither CIArb norits officers, agents, or employees shall be liablefor anything done or omitted to be done by anArbitrator nominated or appointed by CIArbunder the Scheme (or its employees or agents)in the discharge or purported discharge of hisfunctions as an Arbitrator.5

The BusinessArbitration SchemeAppointment Form6

The Business Arbitration SchemeAppointment FormIn the matter of a dispute between the following:Claimant/First Party*AddressTelephoneFaxEmailRepresented by*AddressTelephoneFaxEmailAndRespondent/Second Party*AddressTelephoneFaxEmailRepresented by*AddressTelephoneFaxEmail*Delete as applicable or add, if necessary, names of other parties or representativesBrief details of the dispute:Please provide a brief summary of the dispute, the issues to be determined, and the relief soughtAmount in dispute (if appropriate)