As part of the Government's plans to grow the economy, it was confirmed in the King's speech on 7 November 2023 that the Arbitration Bill will form part of the forthcoming legislative programme. We look at what the Bill is intended to achieve and how.
In September 2023, the Law Commission published its final report on proposed reforms to the Arbitration Act 1996, together with draft legislation putting into effect those proposals. The Arbitration Bill implements recommendations from the report and will now be considered in Parliament.
The Bill is set to modernise the law on arbitration - according to the briefing notes to the King's speech, it will “support arbitration in England, Wales and Northern Ireland” by:
- Empowering arbitrators to expedite decisions on issues that have no real prospect of success.
- Introducing a statutory duty on arbitrators to disclose circumstances which might give rise to justifiable doubts about their impartiality.
- Extending arbitrator immunity against liability for resignations, unless shown to be unreasonable, and the costs of the application to court for their removal, unless they have acted in bad faith.
- Clarifying the law governing arbitration agreements, providing that the law applicable will be that of the legal location chosen for arbitration unless parties expressly agree otherwise.
- Simplifying the procedure for challenging arbitral awards on substantive jurisdiction by providing for rules of court that would mean that such applications should contain no new evidence or new arguments.
- Empowering the court to make orders supporting those of emergency arbitrators.
- Providing that the court has the power to make orders in support of arbitral proceedings against third parties.
The proposals do not constitute significant reform of the Arbitration Act 1996. The Law Commission's recommendations were limited to “a few major initiatives, and a very small number of minor corrections” and received broad support from arbitration practitioners.
Once placed before Parliament, the Bill will be debated in the House of Commons and House of Lords, before moving to receive Royal Assent and become law. Agreement from the Northern Ireland Department of Justice will also be required for the Bill to apply in Northern Ireland (where the Arbitration Act 1996 also applies).
These new measures will bolster England, Wales, and Northern Ireland’s world-leading domestic and international arbitration sector with benefits for individuals and businesses seeking to resolve disputes, as well as boosting economic growth.