Forced arbitration in traffic cases is not unlawful - court

The Constitutional Court has overturned a judgement which had found that forced arbitration imposed by law in traffic collision cases was in violation of an individual's fundamental human right to a fair hearing.

Joseph Muscat had filed his constitutional application in 2008 against the Prime Minister, the Minister for Justice and the Attorney General.

Mr Muscat told the court that he was involved in a traffic accident in 2007 and was being sued for damages by an insurance company using forced arbitration in terms of the Arbitration Act.

In his application Mr Muscat said that the arbitration provided for by this law in traffic collision cases was forced and not voluntary and that therefore the arbiter was fulfilling the role of a tribunal in terms of law. Mr Muscat said this forced arbitration did not provide him with a fair hearing by an impartial and independent tribunal and he requested the court to declare the forced arbitration proceedings null and void as they violated his fundamental human rights.

The First Hall of the Civil Court had found that in order for a tribunal to satisfy the provisions of the Constitution and of the European Convention of Human Rights, it had to be independent, impartial, and had to guarantee security of tenure to the adjudicators. An individual could opt in favour of voluntary arbitration and thus renounce to access to a court and to a public hearing by a legally established tribunal. Such an option was recognised as being valid by the European Court of Human Rights.

However, the arbitration complained of by Mr Muscat was not of a voluntary nature but was imposed by law. In such cases the legislature ought to have offered a system of an independent and impartial tribunal.

In determining whether a tribunal could be considered as independent the court had to examine the manner of appointment of the tribunal's members and the duration of their term of office, the existence of guarantees against outside pressures and whether the tribunal presented an appearance of independence.

The first court had ruled in favour of Mr Muscat and had found that the forced arbitration was in violation of his human rights and the arbitrators appointed by the Arbitration Centre did not have security of tenure..

The court therefore found in favour of Mr Muscat and ruled that the law imposing forced arbitration in collision cases was in violation of the fundamental human right to a fair hearing.

The authorities then appealed to the Constitutional Court composed of Chief Justice Vincent Degaetano, Mr Justice Joseph A Filletti and Mr Justice Giannino Caruana Demajo.

On appeal the court declared that there was no doubt that an arbitration tribunal was a judicial authority in terms of law. However the court had to ensure that such a tribunal satisfied the required guarantees of independence and impartiality.

When examining the issue of security of tenure on the part of the arbitrators, the Constitutional Court said that when there was no agreement between the parties the arbitrator was appointed by the Chairman of the Arbitration Centre from a panel of approved arbitrators.

This fact did not mean that the arbitrator appointed by the Chairman was not independent. The appointment of an arbitrator by the Chairman meant that the choice was effected by a person who was independent from the parties to an arbitration case.

If an arbitrator was removed by the Arbitration Centre, this was an executive decision which was subject to judicial review by the courts and could be overturned. The fact that an arbitrator could be removed did not mean that such arbitrator would be influenced by the wishes of the Arbitration Centre.

By the same reasoning, one could say that a member of the judiciary who was approaching retirement age would not remain independent as he might be eligible to fill another post as decided by the government.

There was therefore no reason to doubt the independence and impartiality of the arbitration proceedings.

The Constitutional Court therefore revoked the first court's judgement.