UK is the cheapest centre for international arbitration, says survey

The Chartered Institute of Arbitrators (CIArb) said its survey (40-page / 2MB PDF) showed that parties pursuing arbitration had to spend an average of £1,540,000 in the UK compared with £1,685,000 in the rest of Europe.

The survey was completed by 254 practising arbitrators and lawyers from five countries, of which 32% were from the UK, CIArb said.

CIArb President Doug Jones described the results as "interesting and surprising".

"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 said.

"The relatively low cost of arbitrating in London may surprise some, but reflects the fact that arbitrations held in London are increasingly conducted in a cost-effective and efficient manner," said Michael Stewart, an expert in international arbitration with Pinsent Masons, the law firm behind Out-Law.com.

"The courts in England and Wales are also increasingly supportive of arbitration, rarely intervening in the process, thereby adding to its general efficiency," he said.

Costs tended to be around 13% higher in civil law countries than common law countries, the survey said. The results also showed that the party initiating proceedings spent 12% more than the defending party, and that the average length of an arbitration was between 17 and 20 months.

Arbitration is a system of formal dispute resolution by one or more impartial people for a final and binding decision. The arbitral tribunal can be made up of legal or industry experts of the parties' own choosing, using procedures which they can influence.

Arbitration has become the chosen method for the resolution of international disputes and is often seen to be a quicker, practical and more economical method of settlement than going to court.

Speaking at CIArb's Costs of International Arbitration Conference in London, Doug Jones said that arbitrators needed to draw on a "toolkit of processes" in order to control the rising costs of international arbitration.

"The evidence should be tailored to suit the resolution of the dispute; parties should concentrate only on the key information needed to resolve the dispute; experts should be efficiently deployed and the hearing must be effectively organised," he said.

Arbitrators needed to "gain a deeper understanding of the issues early on" in a particular dispute enabling them to resolve that dispute more efficiently, he said.