In March 2016, at the fourth lecture of the British and Irish Legal Information Institute (BAILII), Lord Thomas, the Lord Chief Justice, argued that English commercial law, which underpins markets, trade and commerce, is in danger of stagnating. To his mind, this is due primarily to the increased number of disputes being arbitrated rather than litigated, and due to the restrictive right of appeal from arbitration awards implemented in England beginning in 1979 to promote arbitration.

Lord Thomas believes that the time has come for steps to be taken to preserve the sanctity of the common law, and indirectly the quality of arbitration awards themselves. His suggested steps include: (i) revising the criteria for appeals, by way of amending Section 69 of the Arbitration Act 1996 which allows appeals on issues of law in limited circumstances; (ii) encouraging greater use of Section 45 of the Act, which allows applications to the court for a determination of a preliminary point of law arising in the course of the proceedings; and (iii) making greater use of the courts in place of arbitration.

The Lord Chief Justice’s controversial call was met with swift responses from prominent legal figures. Writing in The Times in April, Lord Saville, chair of the advisory committee whose bill became the current Act, welcomed the proposals to assist in the development of English commercial law by increasing the attractiveness of English courts. Unsurprisingly, however, he was not in favour of reforming the Act to enable more appeals to be brought. He believes that arbitrating parties have chosen expressly to have their dispute resolved on the merits by their selected tribunal and not by a court. Furthermore, particularly in the case of international parties, an increase in the likelihood that an English court could substitute its judgment for that of the tribunal in anything other than an extreme case, would push international arbitration away from London.

Jan-Mar 2017 issue

Signature Litigation