On Thursday 22 September 2022, the Law Commission published a consultation paper on the provisional law reform proposals for the Arbitration Act 1996 (the Act).
The Act provides the legal framework for arbitration in England, Wales and Northern Ireland and has been used to inform legislation in many jurisdictions around the world.
The proposals contained in the consultation, seek to modernise the legislation whilst maintaining high standards and a reliable framework for successful arbitrations. The Chartered Institute of Arbitrators (Ciarb) has made significant contributions to the review since it was launched last year. Following input from stakeholders, the Law Commission has made a provisional assessment that major reform is not necessary. However, there are specific areas that the Law Commission propose be examined in greater detail. These are:
- Confidentiality. The Act does not offer a provision on confidentiality in arbitration, however, in the Commission’s view, a proposed codified provision on the matter might not be appropriate since not all types of arbitration can and should be confidential.
- Independence of arbitrators and disclosure. The Commission concludes that it is important to emphasise impartiality and arbitrators’ continuing duty to disclose any circumstances which might result in justifiable doubts as to their impartiality (see Halliburton v Chubb). The current determination of the Law Commission is that a specific provision on the duty of arbitrators’ independence should not be included.
- Discrimination. The paper proposes the term “protected characteristics”, defined in the Equality Act 2010, be used in the context of challenges to arbitrator appointments and enforceability of an arbitration agreement. These characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. Thus, any challenge on the basis of such characteristics would not be possible, while any arbitration agreement regarding one of such characteristics would be unenforceable. This is without prejudice to situations where such characteristics are essential for legitimate purposes of a particular case.
- Immunity of arbitrators. According to the Commission, the Act should lend more support to the immunity of arbitrators, particularly when it comes to their liability for the costs of court applications. It also requests comments on whether liability for resignation should also be considered.
- Summary disposition of issues which lack merit. In the Commission’s view, it might be reasonable to adopt an express, non-mandatory provision allowing summary disposition procedures. Even though such procedures are not currently prohibited, an express provision might make arbitrators less reluctant to resort to it.
- Interim measures ordered by the court in support of arbitral proceedings (section 44 of the Act). The Commission does not doubt the powers of the courts to make orders under section 44 against third parties. The question being asked is whether an explicit provision to that end is needed. The paper offers several other proposals in regard to measures such as emergency arbitrators and the relevant provisions of the Act.
- Jurisdictional challenges against arbitral awards (section 67). The Commission considers whether in circumstances where a party had participated in proceedings and questioned Tribunal’s jurisdiction under section 30 and then challenged the arbitrator’s finding of jurisdiction under section 67, a full rehearing or an appeal would be best suited to deal with the challenge. The initial proposal is that an appeal is a viable option and that the final arbiter of jurisdiction should be the courts.
- Appeals on a point of law (section 69). In the Commission’s view, the wording of section 69 offers a satisfactory compromise between the importance of the finality of arbitral awards and the necessity to correct errors of law and it is “applied consistently and in common to everyone”.
- The Commission also offers some other minor amendments as to the separability of arbitration agreement, stay of legal proceedings, modern technology and others.
Ciarb will continue to work closely with the Law Commission while it conducts this review. We encourage all interested members to submit their own responses to the consultation or liaise with their local Branch to respond collectively to the consultation.
The consultation closes on Thursday 15 December 2022.
Click here to view the summary of the consultation paper.
Catherine Dixon, Ciarb Director-General:
“The Arbitration Act 1996 has played a vital role in supporting the use of international commercial arbitration. We encourage and welcome arbitration legislation around the world being reviewed regularly to ensure it is serving the needs of parties and arbitrators. We therefore welcome the Law Commission’s proposals to review the Act.
Ciarb contributed to the Law Commission’s 14th Programme consultation last year and we are pleased that the consultation paper has now been published. As a leading professional body for dispute resolvers, we will continue to work closely with the Law Commission to ensure that this review is a successful one. We also encourage Ciarb members to respond to the consultation and will continue to provide opportunities for them to do so in the coming months.”
A Law Commission consultation session with Ciarb members is planned for 29 November 2022. Virtual attendance is free.