The Law Commission’s Proposed Amendments to The Arbitration Act 1996
Key Contact: Aisha Wardell
Author: Saskia Musacchio
In England and Wales, arbitration is regulated by the Arbitration Act 1996 (“the Act”). Given that the Act came into force more than a quarter of a century ago, the Law Commission considered it time to revisit the Act, especially as other jurisdictions have enacted more recent reforms. The Commission published its consultation paper in September 2022 (“the Consultation Paper”) which features a set of proposed amendments, designed to modernise the Act, with a view to making arbitration more effective and responsive. The Law Commission has considered a wide number of issues including arbitrator independence and disclosure, confidentiality, discrimination, and gendered language, arbitrator immunity, summary disposal of issues that lack merit, interim measures ordered by the court, jurisdictional challenges against arbitral awards, and appeals on points of law. This article focuses on three of the considered areas: (i) arbitrator independence and disclosure; (ii) confidentiality; and (iii) discrimination and gendered language.
Arbitrator independence and disclosure
The Law Commission considered whether the Act should impose express duties on arbitrators of independence (i.e. having no connection to the arbitrating parties) and disclosure (i.e. revealing to the arbitrating parties any circumstances which might go to the question of impartiality or independence). Currently, under section 33 of the Act, there is an express duty of impartiality: “the Tribunal shall act fairly and impartially”. Given the existence of this and weighing up both impartiality and independence, the Law Commission considers that what matters most is impartiality; if an arbitrator is impartial and is seen to be so, it should not matter whether they have a connection to the arbitrating parties. However, the Law Commission consider disclosure to be a fundamental mechanism for ensuring justice and, in their opinion, disclosure is missing from the Act. Therefore, whilst the Law Commission provisionally conclude that the Act should not be amended to include an express duty of independence, they propose that the duty of disclosure should be codified i.e. that arbitrators have a continuing duty to disclose any circumstances which might reasonably give rise to justifiable doubts as to their impartiality.
The first substantive chapter of the Consultation Paper considers whether the Act should explicitly address the confidentiality of arbitrations. Currently, the Act does not do so; the default position in England and Wales is that all types of arbitration should be private and confidential. Given that the law of confidentiality is complex, fact-sensitive, and far broader than arbitration, the Law Commission considers that an attempt to codify it within an arbitration statute would be misplaced. Instead, the Law Commission thinks the better approach would be to leave the law of confidentiality to be developed by the courts as necessary. This would allow for the development of broad principles as well as any specific issues to be resolved on a pragmatic case-by-case basis. Therefore, the Law Commission’s provisional conclusion is not to propose codification of the law of confidentiality.
Discrimination and gendered language
The Law Commission considered whether the Act should prohibit discrimination in the appointment of the arbitrator. For instance, some arbitration agreements stipulate that the arbitrators must be “commercial men”. As explained by the Law Commission, the courts have upheld such agreements. However, the case law is old and does not speak to whether the limitation to “men” is appropriate or suited to today’s modern society, especially given the increasing appointment of women as arbitrators. The Law Commission provisionally propose that discrimination should be explicitly addressed as follows: (i) the appointment of an arbitrator should not be susceptible to challenge on the basis of the arbitrator’s protected characteristic(s) (i.e. those identified in section 4 of the Equality Act 2010); and (ii) any agreements in relation to the arbitrator’s protected characteristic(s) should be unenforceable unless in the context of that arbitration, the arbitrator having a specific protected characteristic is a proportionate means of achieving a legitimate aim. This would affect section 19 of the Act which requires the court to have “due regard” to the agreed qualifications required of any arbitrator it appoints. Also under the heading of ‘discrimination’, the Law Commission considered the use of gendered language within the Act, which currently only uses male pronouns. The Law Commission proposes that the Act should be drafted gender-neutrally.
Overall, from reviewing three of the considered areas, it is clear that the Law Commission’s proposals have been militated by a more modernistic stance towards flexibility and transparency and against discrimination.
A full copy of the Law Commission’s Consultation Paper can be read here.
Getting in contact with Acuity
If you feel you have a potential nuisance dispute, or if you wish to discuss the points raised in this article, please contact our Litigation Team and we will be happy to help.