Resolving legal disputes could soon take a significant step into the modern era with the introduction of new proposed legislation to Parliament. Here’s what you need to know:
The Arbitration Bill
The Arbitration Bill 2023 is set to cement England, Wales and Northern Ireland as a “world leader in dispute resolution” according to the government, with the intention to update exiting legislation - Arbitration Act 1996 - by implementing recommendations made by the Law Commission following a detailed review.
The UK, and London in particular, has long been one of the leading centres for the arbitration of international as well as domestic commercial disputes. In England and Wales, it is estimated that arbitrations contribute around £2.5billion to the British economy in professional fees alone. However, the UK is facing increasing competition from overseas arbitration centres, like Singapore.
Having been confirmed in the King’s Speech earlier this month, the proposed reforms are expected to make arbitration quicker, cheaper and more efficient for businesses and individuals wanting to resolve cases.
What could change
Among the notable amendments to existing law being introduced in the Bill are:
- Increasing court powers to support arbitration – This will strengthen the courts’ powers to make interim orders against third parties to support an arbitration, for example, orders requiring third parties to preserve evidence which is relevant to the dispute in the arbitration;
- Emergency Arbitrators – new measures are introduced to support emergency arbitrators, their powers and the enforcement of their decisions;
- Summary disposal of claims - This will grant arbitrators the power to make an award on an expedited summary basis in relation to a claim or issue where the relevant party has no real prospect of success;
- Arbitrator’s duty of disclosure – This will compel arbitrators to tell the parties if anything might affect their impartiality in deciding a dispute;
- Governing law of the arbitration agreement – This will introduce a new default rule in favour of the law of the seat of arbitration (i.e. where the arbitration occurs), unless the parties expressly agree otherwise. This will also override the principles previously set out in the Supreme Court case of Enka v Chubb (2020) which are considered by many to be overly complex and unpredictable;
- Increased protection for Arbitrators from unreasonable lawsuits – Arbitrators will receive further immunity against any liability should they need to resign, with exceptions.
- Should the Bill become law, it will apply in England, Wales and Northern Ireland as Scotland has its own arbitration law.
Alastair Govier, Partner in the Thrings Commercial Dispute Resolution team, said: “Arbitration is a very important and widely used alternative to court proceedings for the determination of commercial disputes, particularly in the context of international contracts, finance and investment, rent reviews, and construction and engineering projects.
With the previous act now more than a quarter of a century old, it was ripe for updating to ensure that arbitration in this country is as effective and efficient as it can be and that this jurisdiction, and in particular London, maintains its attractiveness as one of the world’s leading international centres for arbitration which has the support of our domestic courts and law to provide more certainty.”
Thrings’ Commercial Dispute Resolution lawyers have an outstanding track record in achieving success in the litigation and resolution of commercial disputes. If you would like to know more about how you could potentially use arbitration as an alternative to court proceedings in resolving your disputes, please contact us to find out more.
