The UK is the cheapest and most popular venue for international arbitration, according to an authoritative survey published this week.
Some 74% of party costs in international arbitrations are accounted for by external legal costs, and external fees are 26% higher in the rest of Europe, it found.
The survey, by the Chartered Institute of Arbitrators, found claimants’ costs averaged £1,540,000 in the UK, compared with £1,685,000 in Europe, a difference of 8%.
Party costs were nearly 13% higher in civil law countries (averaging £1,521,000) than in common law countries, where the average spend was £1,348,000.
The survey showed the common costs of arbitrations, such as arbitral fees, were over 18% higher in Europe than in the UK.Overall, it found that claimants spent 12% more than respondents, and the average length of an arbitration was 17-20 months.
The UK was the most popular arbitral seat.
The survey was completed by 254 practising arbitrators and lawyers from five countries, of whom 32% were from the UK.CIArb president Doug Jones said the survey was prompted by concerns about the cost of international arbitration and lack of hard data on the subject.
He said: ‘In these difficult economic times, it is more important than ever for international arbitration to follow cost-effective processes without prejudicing the delivery of justice in commercial matters.’
Jones said it was ‘interesting and surprising’ that the UK came out as cheapest.
‘London law firms have the label as being very expensive. So if this outcome is true beyond the survey sample, it raises very interesting questions,’ he added.