Arbitration practitioners have widely welcomed the regime ushered in by the Arbitration Act 2025, which comes into force today. The measure, which received Royal Assent in February, updates the Arbitration Act 1996. It introduces a default position about the choice of applicable law and requires arbitrators to declare upfront any potential conflicts of interest. It also improves arbitrators’ protection from legal risks and creates a summary dismissal procedure for hopeless cases.
Courts minister Sarah Sackman said the new regime ’will attract further investment to the UK’s £42.6 billion legal services economy and create highly-skilled jobs, supporting the sector’s existing 384,000 workforce’. England and Wales handle at least 5,000 domestic and international arbitrations annually, generating £2.5 bn in fees alone, the government said.
Law Society president Richard Atkinson said: ‘International arbitration is a fiercely and increasingly competitive field where English and Welsh law continues to dominate governing roughly 40% of global corporate arbitrations. As the market evolves, it is imperative that the government maintains our jurisdiction’s competitive edge and capitalises on the economic value of our legal system.’
Emma Johnson, a partner in dispute resolution at international firm Ashurst, said the provisions ‘will no doubt increase certainty and efficiency and reduce the scope for recalcitrant parties to delay ultimate resolution of disputes’. However she warned that whether London’s status as an arbitral seat will be boosted ‘remains to be seen - the failure to address longstanding uncertainty in areas such as confidentiality might mean that parties continue turn to other jurisdictions as the curial law for their disputes.’
Hendrik Puschmann, partner and co-head of arbitration at international firm Trowers & Hamlins described the measure as a gentle update to existing law. ‘The bulk of the new provisions merely fill in gaps in the existing framework, often simply putting into the act concepts that had been developed by case law before.’ However he predicted the summary dismissal process would have widespread significance.
‘Previously, parties would often have to go the distance (meaning detailed submissions and evidence, and a full merits hearing) even where it was obvious that this was pointless (eg, because a claim had been brought purely for tactical reasons),' he said. 'Under the new act, the tribunal can dismiss either a claim or a defence that has no real prospect of succeeding on a summary basis.’ He expected applications for dismissal to become ‘a fairly regular feature’ of arbitration.
Paul Brumpton, partner in the arbitration practice at international firm White & Case hailed the act’s creation of a statutory default rule on the applicable law. This ‘should all but eliminate previous uncertainty over which law governs an agreement to arbitrate, and the expensive satellite litigation to which that could give rise’.
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