The 1996 Arbitration Act Under Review: The Law Commission Requests Comments On Proposed Reforms

• Published date: 04 October 2022
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Cooley LLP
• Author: Juan Nascimbene

The UK Government has asked the Law Commission to review the Arbitration Act 1996 (the 'Act') to make sure that England and Wales (and London as an arbitration seat) remain at the forefront of international arbitration. On 22 September, the Law Commission published a consultation paper, together with a summary, on proposals to review certain sections of the Act.

Main Areas for Reform

The consultation paper considers eight main areas for potential reform.

1. Confidentiality: The Act does not establish any general position regarding confidentiality in arbitration proceedings. The Law Commission considers whether a default rule of confidentiality would be desirable but rejects the idea, concluding that each party should be free to decide whether to make their arbitration proceedings confidential.
2. Impartiality of arbitrators and disclosure: Recognising the importance of the requirement that arbitrators are impartial, the Law Commission proposes that the Act is amended to include a continuing duty upon arbitrators to disclose information 'which might reasonably give rise to justifiable doubts as to their impartiality'.
3. Discrimination: Restating a strong commitment with the principle of non-discrimination in the appointment of arbitrators, the Law Commission suggests including the following two additions to the Act: An arbitrator's appointment should not be allowed to be challenged based on the arbitrator's protected characteristics (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief sex, and sexual orientation); and
   • Any arrangement between the parties concerning the arbitrator's protected characteristics will not be enforced (unless this is a proportional way of obtaining a legitimate goal).
4. Immunity of arbitrators: There are currently two exceptions to the principle that arbitrators are not liable for conduct in the exercise of their functions unless done in bad faith: first, arbitrators can incur liability if they resign (even when they have good reasons to do so); and secondly, when a party challenges an arbitrator's appointment before a court, the arbitrator can be liable for the costs of that application (which the Law Commission notes are not generally covered by professional indemnity insurance). To uphold the principle of immunity of arbitrators, the Law Commission proposes that arbitrators should not be required to pay the costs of those court applications Additionally, the Law...