The Arbitration Bill – one of the Labour Government’s legislative priorities

In the recent King’s Speech, the new Labour Government’s legislative plans were unveiled and the Arbitration Bill was included as part of the plans for economic stability and growth.

In 2022, the Law Commission published a report on proposals to update the Arbitration Act 1996. Since then, an Arbitration Bill which puts in place the recommendations from the Law Commission has made its way through Parliament. However, its progress was halted when the general election was announced.

Now the new Labour Government has resurrected the Arbitration Bill, it is expected to progress through the House of Commons and the House of Lords before it receives Royal Assent and becomes law. It is anticipated that the bill will receive Royal Assent at some stage in the first half of 2025.

Some of the key reforms which the Arbitration Bill introduces include:

• Confirming the new default rule regarding applicable law so that the law applicable to arbitrations will be those of the legal location chosen for arbitration unless the parties expressly agree otherwise. This changes the position where, if the parties have elected the applicable law within the main contract, that law will also apply to the arbitration agreement itself, even where the chosen location for the arbitration is different.
• Implementing a statutory duty on arbitrators to disclose circumstances that might give rise to justifiable doubts about their impartiality.
• Allowing arbitrators to make awards on a summary basis on issues that have no real prospect of success, avoiding nuisance claims and making arbitrations more efficient. This reflects the civil court's power to dispose of meritless claims or defences without incurring the time and expense of a full trial.
• Implementing measures to clarify when challenges will be permitted on the basis that the arbitral tribunal lacked jurisdiction with a view to minimising circumstances in which losing parties can effectively engineer a re-hearing of the case before the courts.
• Allowing civil courts to make orders in support of emergency arbitrators so they have the same routes to enforce their orders as other arbitrators.