Which Covid-19 Commercial Rent Dispute Body Should I Use? Key Terms Compared

• Published date: 11 May 2022
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Arbitration & Dispute Resolution, Landlord & Tenant - Leases
• Law Firm: Herbert Smith Freehills
• Author: Mr Craig Tevendale and Matthew Bonye

The UK Government has introduced a new statutory scheme under the Commercial Rent (Coronavirus) Act 2022 (the 2022 Act) for the resolution of disputes between landlords and tenants in relation to rent arrears accrued during the pandemic. The background to the scheme and when it may be used is discussed in our earlier blog here.

Arbitration bodies must be approved by the Government in order to administer arbitrations under the scheme. The Department for Business, Energy and Industrial Strategy (BEIS) has now published a list of arbitration bodies (the Approved Bodies) that have been approved to do so. In this post, we consider the procedural requirements of the statutory scheme, the offerings of each of the Approved Bodies and how the scheme differs to the standard process adopted for arbitrations under the Arbitration Act 1996 (the Arbitration Act).

The Approved Bodies

There are seven Approved Bodies. These are:

• Chartered Institute of Arbitrators (CIArb)
• Royal Institute of Chartered Surveyors (RICS)
• London Chamber of Arbitration and Mediation (LCAM)
• The Consumer Code for Online Dispute Resolution (CCODR)
• Consumer Dispute Resolution (CEDL)
• Falcon Chambers Arbitration
• Dispute Resolution Ombudsman

The Approved Bodies each have unique offerings for resolving disputes under the statutory scheme. A table comparing the offerings of the Approved Bodies, produced by HSF, can be viewed and downloaded here.

Arbitration Fees

Requirements under the2022 Act

The Secretary of State may make regulations concerning limits on arbitration fees (the arbitrators' fees and expenses, any oral hearing fees and the Approved Bodies' own fees and expenses (together, the Arbitration Fees)), and may make these limits dependent on the amount of protected rent in question. However, no such regulations are in force at the time of writing (s19(2)).

The applicant party must pay the Arbitration Fees (other than oral hearing fees) "in advance of the arbitration hearing taking place" (s19(4)). However, the general rule under the 2022 Act is that when issuing the award, the arbitrator will also "make an award requiring the other party to reimburse the applicant for half of the arbitration fees paid" (s19(5)). This approach can be departed from where the tribunal "considers it more appropriate in the circumstances of the case to award a different proportion (which may be zero)" (s19(6)). Guidance issued by BEIS (the Guidance) further states that the tribunal may "require the other party to...