Arbitration Bill Begins Its Progress Through Parliament

The Government has announced that the new Arbitration Bill has taken its first steps on its legislative journey toward becoming law. The Bill represents an attempt to enact certain amendments to the Arbitration Act of 1996 as recommended by the Law Commission. 

With arbitration being worth approximately £2.5 billion to the UK economy, and London holding the reputation as being the best global location for the resolution of legal disputes, it is hoped that the Arbitration Bill will yield incremental benefits. 

The Arbitration Bill comes on the back of a final report published by the Law Commission of England and Wales which set out various proposals to update and reform the Arbitration Act 1996. 

The changes proposed by the Arbitration Bill include: 

• Strengthening the courts’ powers to support emergency arbitration so time-sensitive decisions can be made more easily. This would help in situations where evidence is at risk of being destroyed by bad actors, for example.
   
• Providing more clarity on the law of arbitration. This includes the introduction of a new default rule in favour of the law of the seat of arbitration (albeit with provision for the parties to agree otherwise). Other proposed changes include placing the duty of disclosure laid down in Halliburton v Chubb on a statutory basis. 
   
• Simplifying procedures to reduce delays and costs for clients.
   
• Greater protections for arbitrators from unreasonable lawsuits. 

At the time of writing, the first iteration of the Arbitration Bill has been introduced in the House of Lords and received its first reading on 21st November 2023. 

Commenting on the Bill, Justice Minister, Lord Bellamy, said: 

“These much-needed changes will modernise the role of arbitrators and further cement our position as a world leader in the field.

The UK is a globally-respected hub for legal services, with English and Welsh law the bedrock for the majority of international disputes, and the Arbitration Bill will ensure businesses from around the world continue to come here to resolve their disagreements”.

Lord Bellamy’s comments reflect the fact that recent years have seen other countries modernise their laws with respect to arbitration. It was this that prompted the Law Commission in 2021 to review the Arbitration Act to ‘ensure the UK remains ahead of the curve when it comes to dispute resolution’.

Also commenting on the news of the Arbitration Bill was Catherine Dixon, CEO of the Chartered Institute of Arbitrators, who said: 

“We worked very closely with the UK Law Commission and other officials during its review of the Arbitration Act 1996. As the leading professional body for dispute resolvers, we are delighted that the majority of our recommendations were adopted in the Law Commission’s report and, subsequently, the Bill.

We are pleased that the UK Government has included legislative reform of the Arbitration Act as a key priority in this Parliament, recognising the importance of arbitration to the UK and globally, as the Act forms the basis of legislation in many other jurisdictions”.

Following its first reading in the House of Lords, the Arbitration Bill will need to progress through both houses (Commons and Lords). It is expected that the Bill will enter the statute book sometime in 2024. 

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