On 24th February 2025, the Arbitration Act received Royal Assent, marking a significant milestone in modernising dispute resolution in England and Wales. This new legislation is set to bolster the UK’s position as a global leader in arbitration, attracting more international businesses and investments.
Arbitration offers companies a quicker and more cost-effective alternative to traditional court proceedings, reducing legal fees and easing tensions between disputing parties. Each year, over 5,000 domestic and international arbitrations take place in England and Wales, contributing at least £2.5 billion to the UK economy in fees alone. With the new Act, the UK aims to outpace competitors like Singapore, Hong Kong, and Paris, ensuring it remains the top choice for legal services worldwide.
Minister for Courts and Legal Services, Sarah Sackman KC MP, highlighted the importance of this development, stating that the UK’s legal sector contributes billions to the economy and employs hundreds of thousands across the country. She emphasised that companies worldwide look to the UK for legal services and dispute resolution, and this new Act ensures that arbitration law keeps the country ahead, supporting economic growth as part of the government’s Plan for Change.
The Arbitration Act introduces several key reforms to make the process fairer and more efficient:
- Simplified Procedures: Streamlining arbitration processes to reduce costs and time for businesses.
- Protection for Arbitrators: Safeguarding arbitrators from unreasonable lawsuits, encouraging impartial decision-making.
- Enhanced Emergency Arbitration: Strengthening court powers to support urgent arbitration, facilitating timely decisions in critical situations.
The international arbitration sector has seen substantial growth, with industry estimates indicating a 26% increase between 2016 and 2020. Over the past decade, UK exports of legal services have risen by more than 80%, underscoring the global demand for British legal expertise.
Cristen Bauer, Head of Policy at the Chartered Institute of Arbitrators, expressed enthusiasm for the Act’s enactment. She noted that the Institute worked closely with the UK Law Commission during the review of the previous Arbitration Act 1996, and many of their recommendations were incorporated into the final report. Bauer believes the new Act will strengthen London’s position as a premier arbitration hub and set high international standards.
In summary, the Arbitration Act 2025 is poised to enhance the UK’s legal framework, making arbitration more accessible and efficient for businesses worldwide. This development not only reinforces the UK’s reputation in the legal arena but also promises significant economic benefits by attracting global enterprises to resolve their disputes on British shores.
