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Countrywide Surveyors describe themselves on their website as 鈥渙ne of the UK鈥檚 premier surveying and valuation practices operating from locations nationally鈥�. They are involved in residential property valuations - lots and lots of them. They have an army of surveyors. Unfortunately, three members of that army were, allegedly, involved in several hundred fraudulent valuations. Countrywide parted company with them and made a claim under their professional indemnity insurance.

The lead underwriter was a firm called Travelers. It thought that there was something fishy about all this, particularly as many of the surveys were carried out for the same commercial property company. It contemplated voiding the policy for misrepresentation and non-disclosure, and it asked Countrywide to produce documents so that it could assess the degree of fishiness and decide whether to pay. Countrywide released some of their files, but not all. Travelers was not satisfied.

Criticism of arbitration comes from a lack of understanding of the process. It used to be an inefficient and expensive version of litigation, but the 1996 reforms Have worked wonders

CPR (the civil courts鈥� procedure rules) enable a party to potential future litigation to apply to the court before starting full-blown proceedings for the disclosure of documents in the possession of another potential party. Relevant documents will have to be disclosed in the course of the litigation anyway, but only after expensive preliminary steps have been taken.

Typically the parties will spend several months following what is known as the 鈥減re-action protocol鈥� before they issue the proceedings. They will then draft and serve voluminous pleadings, probably taking more months and certainly costing huge amounts of money, before the disclosure stage is reached. Sometimes a sight of the papers early on can make all that unnecessary. The claimant may find out that the case is not worth pursuing, or the defendant may realise that the game is up.

Travelers thought that this procedure was just what it needed, so it made an application to court for the disclosure of the material that was being withheld. It came before Mr Justice Coulson in the Technology and Construction Court last month.

The judge wanted to agree. This was just the sort of case, he said, when an order for pre-action disclosure was appropriate and should be made. There was just one problem: the arbitration agreement.

The policy contained a provision that any dispute about misrepresentation or non-disclosure would be referred to arbitration. Arbitration is not litigation, and so it could not be said that the parties were likely to be involved in litigation on the point, and that was a necessary precondition for an order to be made for early disclosure. The application therefore failed.

This should not have come as a great surprise to Travelers. Lawyers have advised since the procedure was introduced that it did not apply to arbitration. To be fair to its legal team, they did know that, but argued unsuccessfully that the arbitration clause did not bite on their dispute.

The lack of a pre-action disclosure procedure has been a standard criticism of arbitration, which leads some people to suggest that it should be avoided. That criticism is wrong, and comes from a lack of understanding of the flexibility the arbitration process. It used to be an inefficient and expensive private version of High Court litigation, but the reforms of the 1996 Arbitration Act and the experience of arbitrators in handling snappy adjudications have worked wonders.

The court procedure rules are aimed at getting as much done as possible before the scene moves to the court itself. There is some sense in that. The courts should not be clogged up with cases that are developing slowly with neither side really sure about their arguments, and courts find it difficult to deal with a stop/start procedure.

Arbitrators do not have that problem. They can adopt a timetable that is tailor-made for the dispute. A party can start the arbitration and apply for an order that the other side produce specific documents or classes of documents before any pleadings are exchanged. The arbitrator is required by section 33 of the act to 鈥渁dopt procedures suitable to the circumstances of the case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters to be determined鈥�. Early or staged disclosure is a perfect example of how arbitrators can do what the act requires.

If you have an arbitration clause in your contract, don鈥檛 be afraid to use it. If the contract does not provide for arbitration, it may suit both parties to take the dispute to arbitration anyway to avoid the costs and publicity of High Court action.

John Redmond is a consultant at Osborne Clarke and an arbitrator and adjudicator