Reforming the Law: The Law Commission’s Final Report on its Review of the Arbitration Act 1996

In September 2023, the UK Law Commission published its final report and draft bill for reforming the <span class="news-text_italic-underline">Arbitration Act 1996</span> (the “<span class="news-text_medium">Act</span>”). The commission has outlined its recommendations for reform and reasons for abandoning certain proposals previously discussed during consultations. The report also includes draft legislation, which is anticipated to be presented to Parliament prior to the next UK general election scheduled for 2025.

The most significant proposed reforms aim to enhance international arbitration's cost and time efficiency in England. This includes giving arbitral tribunals the express power to summarily dismiss claims or issues with no real prospects of success. This would align the Act with institutional rules and address users’ demands for more efficient processes.

Key recommendations include:

• restricting how parties can challenge a tribunal's jurisdiction in court to avoid delays and increased costs;
• simplifying the default governing law for the arbitration agreement by making it the law of the seat;
• clarifying the court's powers to make orders against third parties;
• codifying arbitrators' duties of disclosure; and
• strengthening arbitrator immunity for resignations and removal applications.

These reforms are intended to maintain London’s position as a leading international arbitration hub by meeting users' needs for efficient, robust, and impartial dispute resolution. The government will now consider the recommendations before potential legislation.