Review of the Arbitration Act 1996

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

The Law Commission has published its final report which contains recommendations to reform the Arbitration Act 1996. The final report includes draft legislation.

Download the final report here. 

Download a summary of the final report here. 

 

About arbitration 

Arbitration is a form of dispute resolution. If two or more parties have a dispute which they cannot resolve themselves, instead of going to court, they might appoint a third person as an arbitrator to resolve the dispute for them by issuing an award.  

Arbitration happens in a wide range of settings, both domestic and international, from family law and rent reviews, through commodity trades and shipping, to international commercial contracts and investor claims against states. 

Arbitration is a major area of activity. For example, the Chartered Institute of Arbitrators, headquartered in London, has more than 17,000 members across 149 countries. Industry estimates suggest that international arbitration has grown by about 26% between 2016 and 2020. A survey in 2021 showed London to be the world’s most popular seat. 

The Arbitration Act 1996 (“the Act”) provides a framework for arbitration in England and Wales and Northern Ireland. It has been over 25 years since the Act came into force. This anniversary presents a good opportunity to revisit the Act, to ensure that it remains state of the art, so that it provides an excellent basis for domestic arbitration, and continues to support London’s world-leading role in international arbitration. 

 

This project 

The UK Government asked the Law Commission to review the Act, to determine whether there might be any amendments to be made in order to ensure that it is fit for purpose and that it continues to promote the UK as a leading destination for commercial arbitration. 

We published our first consultation paper in September 2022, and our second consultation paper in March 2023. We received a large number of detailed responses from a wide range of consultees. The consultation papers and consultee responses are also published below. 

 

Our final report 

We heard repeatedly from consultees that the Act works well, and that root and branch reform is not needed or wanted. Accordingly, we have confined our recommendations to a few major initiatives, and a very small number of minor corrections. 

By way of a broad overview, we recommend the following major initiatives:  

• codification of an arbitrator’s duty of disclosure;  
• strengthening arbitrator immunity around resignation and applications for removal;  

• introduction of a power of summary disposal;  
• a revised framework for challenges under section 67;  
• a new rule on the governing law of an arbitration agreement; and 
• clarification of court powers in support of arbitral proceedings and in support of emergency arbitrators. 

We also recommend the following minor corrections:  

• making appeals available from an application to stay legal proceedings;  
• simplifying preliminary applications to court on jurisdiction and points of law;  
• clarifying time limits for challenging awards; and  
• repealing unused provisions on domestic arbitration agreements. 

 

Contact 

Any enquiries regarding our final report should be sent to us at arbitration@lawcommission.gov.uk.