The Law Commission has published its final recommendations to reform the Arbitration Act 1996. The Law Commission has also put forward draft legislation and has proposed reform to strengthen the UK’s position as a prominent place for arbitration. It has also suggested measures to strengthen arbitrator immunity which they hope will improve efficiency among cases and clarify the Court’s powers.
The recommendations for reform of the Arbitration Act include:
- “Codify the law on arbitrators’ duty to disclose conflicts of interest
- Strengthen arbitrators’ immunity
- Introduce provisions for arbitrators to summarily dismiss legal claims that lack merit
- Clarify the power of the courts
- Improve the framework for challenging arbitrators’ decisions
- Create new rules for deciding which laws govern an arbitration agreement”
Now the Government will review and consider the final recommendations presented by the Law Commission and then decide on whether the draft bill should be introduced into parliament.
The full report can be found here.
What is arbitration?
Arbitration is a form of alternative dispute resolution that allows parties who are in a dispute to resolve their disagreement privately through a third party instead of going through the Courts.
This form of dispute resolution can be used in many scenarios of domestic and international settings, from family law, and rent reviews to commercial disputes. Arbitration is a big industry in the UK, centred around London.
The Arbitration Act 1996 has given a legal framework for arbitration in the UK for over a quarter of a century. The Government asked the Law Commission to review the Act to ensure it still is effective and responsive as they want the UK to retain its position as a leader in international arbitration.
Professor Sarah Green, Law Commissioner for Common and Commercial Law, commented on the new recommendations, she stated:
“Our recommendations for reform aim to maintain the core principles of the Arbitration Act 1996 while introducing improvements to create further clarity, ensuring the fair and efficient resolution of disputes. With these improvements, we hope that the Act provides a modern and effective legislative framework for many years to come, enabling arbitration to continue playing a significant role in the UK economy.
“The Arbitration Act 1996 has played a key role in securing the UK’s world leading reputation for arbitration and our reforms will build on this.”
Lord Bellamy, Justice Minister, said:
“Arbitration is a vital measure to help people and businesses resolve disputes swiftly and effectively, without the expense of going through court proceedings.
“This process must be underpinned by effective laws, and we will respond to the Law Commission’s report shortly so we can maintain the UK’s reputation as a world leader in resolving legal disputes.”
Comment
The proposals referred to above are a welcome development in the Arbitration field. However, given a looming general election, it is unlikely that the proposals will be effected in the next year or so.
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Daniel Brumpton is a Partner in our Dispute Resolution team, specialising in professional negligence and commercial litigation. Daniel heads our Commercial Litigation and is recognised by the independently researched legal directory, The Legal 500.
For more information on the subjects discussed in this article, don’t hesitate to get in touch with Daniel or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or contact us via our online enquiry form.
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