The Law Commission of England and Wales has today [Thursday 22
September 2022] unveiled new proposals to update the Arbitration
Act 1996, to ensure that the UK continues to be the foremost
destination for international arbitration.
Arbitration, which involves parties resolving a dispute privately
through a third party rather than the traditional court process,
is a major industry in the UK.
Centred around the world-leading seat of London, arbitration in
the UK commonly involves commercial disputes – but it can also
involve other areas, such as family law.
Over 25 years on from the establishment of the Act, the Law
Commission has today concluded that it still functions very well,
and that its central provisions should remain unchanged.
To help strengthen the UK’s position as an arbitration leader,
the Commission has also proposed a set of improvements, designed
to make the Act as effective and responsive as possible,
following recent reforms by competing jurisdictions.
The new proposals include measures to improve the efficiency of
cases, give further protections to arbitrators, grant extra
provisions to the courts to support cases, and refine the process
for challenging an arbitrator and their decisions.
In other areas, including provisions on confidentiality and
impartiality, the Commission proposes that current provisions are
retained, on the grounds that the law is already effective and
proportionate.
Commenting on the arbitration proposals, Professor , the Law Commissioner for
Commercial and Common Law, said:
“The Arbitration Act was a landmark piece of legislation
which helped to propel London to its position as the foremost
destination for international arbitration today.
“While it continues to function well, over 25 years later,
some parts of the Act may benefit from being updated and refined.
“Our proposals are designed to ensure that arbitration law is
efficient, effective and responsive to modern developments. By
making further improvements, we can help the UK to consolidate
its status as a global centre for
international dispute resolution.”
KC, Parliamentary Under
Secretary of State for Justice, said:
“The UK has long been the world’s best
destination for arbitration, and the Arbitration Act 1996 is
internationally regarded as the gold standard of arbitration
legislation. After a quarter century of success, it is right that
the Law Commission is looking at the Act to ensure that the
legislation remains relevant in the 21st century.
“The work of the Law Commission and those who contribute to
this consultation will ensure that the Act remains world-leading
for many years to come.”
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Consultation proposals from the Law Commission
include:
- Provisions to allow arbitrators
summarily to dismiss claims, made by parties, that lack legal
merit.
- Retaining current duties on the
impartiality of arbitrators, with an additional provision on
disclosing conflicts of interest, so that such disclosure is
fully codified in the Act.
- Further protections under the law
for arbitrators: strengthening their immunity in certain cases
and introducing provisions in support of equality in arbitral
appointments.
- Extending the capacity of the
courts to support arbitration proceedings.
- Refining the process for
challenging the jurisdiction of an arbitrator, so that challenges
in the courts take place by way of an appeal, rather than a full
rehearing.
- Retaining current provisions around
confidentiality and privacy in arbitration proceedings.
