Lockdown and leases
Written by Richard Binner
New Zealand’s team of five million achieved a feat envied by many other nations - quashing the spread of coronavirus within our shores. This did not come without sacrifices. While we put aside many of our usual liberties for the greater good, the flip side of the coin was economic turmoil.
Many businesses, both big and small, experienced a loss of revenue. These businesses struggled to meet their regular outgoings during the Covid-19 pandemic, and many are continuing to feel the pinch. This is causing a surge in commercial disputes which need a swift and cost-effective pathway forward. Arbitration or Mediation could be that answer.
Take commercial rent and lease disputes as an example. If a small retailer’s income was hit during lockdown, then they might be struggling to make their rent payments. The arrears start accumulating. This also impacts their landlord, who in turn may not be able to meet their mortgage obligations. This situation can easily spiral, to the detriment of both sides. If they are unable to reach a mutual agreement, then they need someone to help them, or even make a decision on the matter. Going to court can be a lengthy and costly ordeal, not to mention trying to get a date in our already backlogged legal system. This is time and money that these businesses don’t have.
If parties can’t work through the issues themselves, that’s where arbitration comes in. Arbitration is similar to having a private judge. It is a formal process where an independent person makes a decision on a dispute, governed by the Arbitration Act 1996. FairWay has offered an arbitration service for many years, but following lockdown, we have established an expedited arbitration service especially for commercial rent and lease disputes.
Parties benefit from the speed, ease and control that arbitration offers. Arbitrations can be completed far more quickly than Court hearings, with many cases being able to be determined within just a few weeks. Arbitration also provides for total confidentiality and is more cost-efficient than going to Court. By engaging in arbitration, the parties can choose who will make the decision and within what timeframes.
While arbitration is still emerging across many sectors in New Zealand, it is well used in the area of commercial disputes and commonly used overseas. In the family law arena, arbitration is commonly used to privately resolve care of children and relationship property issues, notably in Scotland and England. Arbitration is also a popular method of resolving cross-border disputes, with arbitration hubs established in Singapore and Hong Kong in the Asia-Pacific.
FairWay’s arbitration service has been founded on international best practice. We already have a pool of experienced arbitrators in New Zealand, including retired judges, Queen’s Counsel and AMINZ Fellows. While arbitration may seem new to many New Zealanders, it is on the rise. In the coming years, we predict to see more and more arbitrations in a variety of jurisdictions. In the interim, arbitration could be a good avenue for the many disputes arising out of the pandemic.
If you would like to discuss online dispute resolution, please contact Richard.Binner@fairwayresolution.com
About the author
Richard Binner is Chief Client Officer at FairWay.
Richard has held a number of senior and executive management roles throughout his 20 plus years in the Financial Services industry. He has broad experience in developing and executing business strategies, together with leading client relationships, business development and service delivery functions.
If you are interested in meeting Richard or learning more about FairWay’s arbitration service, get in touch with Richard by emailing Richard.Binner@fairwayresolution.com