‘Fine-tuning rather than root and branch reform’: top lawyers welcome plans to update UK's Arbitration Act

Law Commission’s verdict that legislation needs updating rather than a complete overhaul chimes with profession
London, United Kingdom - July 20, 2018: Official website of The U.K. Law Commission.

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Proposals to reform the UK’s arbitration regime to maintain its global competitiveness have been welcomed by leading practitioners.

“Fine-tuning rather than root and branch reform”, is how the head of Herbert Smith Freehills’ (HSF’s) London international arbitration group, Craig Tevendale, characterised the Law Commission of England & Wales’s long-awaited consultation on reforming the 1996 Arbitration Act.

Arbitration specialists largely supported the commission’s claim on the launch of its consultation last week (22 September) that the act ‘functions very well’, that its ‘central provisions should remain unchanged’ but that it needs ‘a set of improvements’ to maintain the UK’s leading position in the face of competition from other jurisdictions.

Lead Commissioner, Professor Sarah Green, said the reforms were “designed to ensure that arbitration law is efficient, effective and responsive to modern developments” while Justice Minister Lord Bellamy KC said the Act was “internationally regarded as the gold standard of arbitration legislation” but needed to remain relevant for the 21st century.

“The world is not standing still and it is important to review and update the provisions of the Act some 25 years after it was adopted,” said Stephanie Boyce, president of the Law Society of England & Wales and herself a former lawyer at the Chartered Institute of Arbitration.

Professor Loukas Mistelis, an international arbitration partner at Clyde & Co, said the act’s philosophy of blending the UNCITRAL Model Law with a codification of best practice in English law remained sound.

“In this spirit, courts had a supporting role and arbitrators enjoyed wide level of discretion and immunity,” he explained. “The proposed revisions focus mainly on efficiency of arbitral process – for instance through a more streamlined control of arbitral jurisdiction – and legitimacy of process, by codifying a duty of disclosure while at the same time finetuning arbitral immunity, but also confirming confidentiality which has long been a hallmark of English arbitration.”  

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HSF’s Tevendale pointed to “innovative thinking” on interim measures, while “the proposed introduction of a summary procedure, should give tribunals the confidence to summarily dismiss obviously bad claims in appropriate circumstances”.  Twenty Essex’s Mathew McGhee agreed, adding that other modifications of challenges to jurisdiction would also “stop parties from having two full bites at the cherry”. 

Fox Williams arbitration partner Ben Giaretta welcomed proposals to recognise recent developments in the use of emergency arbitrations, which have become popular as a means of safeguarding client positions in disputes in urgent commercial situations. Giaretta, who was commenting on behalf of London International Disputes Week, added: “Other changes to the duties of arbitrators to make disclosures of potential conflicts of interest, and amendments relating to the use of technology in arbitration, would be beneficial in ensuring London retains its leading position internationally, and continues to adapt to a changing world..”

Steve Devereux, an arbitrator at Arbitra International, said: “Impartiality is essential and so is ongoing disclosure of any connections that might lead to an appearance of bias.”

McGhee added that the consultation’s call for Equality Act protection to arbitrator appointments was particularly relevant to the shipping industry “where decades-old standard forms are still routinely contracted on, the need to appoint ‘commercial men’ as arbitrators will be dispensed with”.

The announcement came as delegates met at ICCA’s Congress in Edinburgh, where reforms enhancing diversity and equality in arbitration were announced by the Scottish Arbitration Centre.

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