The UK is “open for business” as the new Arbitration Act received royal assent, the courts and legal services minister has said.
The new law, which is aiming to boost the UK ranking in modern dispute resolution and attract international business, passed the final legislative hurdle today [Monday].
It aims to make arbitration fairer and easier by simplifying procedures to reduce costs and protecting arbitrators from unreasonable lawsuits, the Ministry of Justice (MoJ) said.
The act also strengthens the power of the courts to support emergency arbitration so time-sensitive decisions can be made more easily, officials added.
Sarah Sackman KC told City AM it “shows the UK is open for business” and “consolidates our place as the jurisdiction of choice for resolving disputes without going to court”.
She said: “The UK already leads the world in dispute resolution, a sector that contributes billions to our economy every year.
“We’re building on this by modernising our arbitration laws to simplify procedures and reduce costs, which will attract global investment and boost growth.”
Arbitration, the MoJ said, saves firms significant legal costs by offering a faster alternative to court proceedings. There are more than 5,000 arbitrations in England and Wales each year, which adds some £2.5bn to the UK economy annually in fees alone.
Industry estimates suggest the sector grew by around 26 per cent between 2016 and 2020, and in the past 10 years, UK exports of legal services have risen by over 80 per cent, with the UK having the largest legal market in Europe, and second only to the US globally.
The new legislation comes after the Law Commission was asked to review the existing positions on arbitration, and the government has accepted their recommendations in full.
Once in force, the act will clarify legal certainties over arbitration; empower arbitrators’ decision making; introduce a duty to declare impartiality issues; allow courts to make orders to support arbitrators; extend arbitrator immunity; and simplify court procedures and costs.
Sackman added: “What businesses want is predictability, independent judges and a system based on the rule of law. In the UK we are world leaders in all these areas.”
Cristen Bauer, of the Chartered Institute of Arbitrators, said the law “will strengthen London’s position as an arbitration seat, and continue to set a high standard internationally”.
The new law will be commenced through regulations as soon as practicable, the MoJ said.