Labour government picks up the baton on Arbitration Bill

A bill to settle contractual or financial disputes faster will proceed under the new Labour government, after it took advice from the Law Commission.

The Arbitration Bill will continue through parliament following the King’s Speech earlier this week.

It was introduced to parliament by the previous Conservative government last November and had reached its committee stage before the general election was called.

Domestic and international claims are covered by the proposed legislation. It modernises the rules governing independent parties, offering alternatives to courts to resolve disputes where two or more parties cannot reach an agreement.

The existing Arbitration Act 1996 provides a framework for arbitration in England, Wales and Northern Ireland and includes construction industry disputes. It does not apply in Scotland.

The proposed new legislation would create a new legal duty for arbiters to disclose any conflicts of interest they may have in a case. It also allows them to make summary awards on claims that have no prospect of success.

David Owens, construction partner at law firm Sharpe Pritchard, told Construction News that the return of the bill was good news for the industry.

“Arbitration is an essential tool for construction dispute resolution. It is often the preferred route in international construction contracts, and frequently chosen over litigation in domestic contracts because it keeps disputes private and avoids the long delays of court action,” he said.

“The bill will modernise arbitration law and includes provisions clarifying which country’s law applies to the arbitration, as well as a duty of candour on arbitrators regarding potential impartiality challenges.”

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