Law commission

Law Commission Calls for Ban on Discrimination in Appointment of Arbitrators

Green: the law generally continues to work well after 25 years

Arbitration agreements requiring the arbitrator to be a “merchant” or otherwise specifying a protected feature will be unenforceable under the Law Commission’s proposals released today.

The commission also suggested a new power under the Arbitration Act 1996 to allow arbitrators to summarily dismiss claims that lack legal merit.

In a consultation paper on law reforms, the Law Commission noted that women were “still about three times less likely to be appointed as arbitrators than men” and that some agreements still required arbitrators to be ” commercial men.

The commission said: “There are moral and economic reasons why discrimination is not acceptable and why equality is necessary.”

She proposed that the Arbitration Act be amended so that “any agreement between the parties regarding the protected characteristics of the arbitrator is unenforceable”.

The exception would be if “in the context of this arbitration” requiring the arbitrator to have a protected characteristic was a proportionate means of achieving a legitimate aim, but he said that would be unlikely.

The commission said the current situation arose as a result of the Supreme Court’s 2011 decision in Hashwani vs Jivrajwho ruled that an arbitrator was not appointed under an employment contract and therefore employment law rules against discrimination did not apply.

“We believe this decision was correct in law, but it revealed that equality legislation did not extend to arbitration, which must be challenged as a matter of principle.”

The committee agreed that “in some contexts” it may be appropriate to require an arbitrator to have a different nationality than the parties, but there would be no “general exceptions” to the new rule.

Regarding summary settlement, the commission proposed that the law “explicitly provide that an arbitral tribunal may adopt summary proceedings in deciding a claim or defence”.

This would be “non-binding” and the parties should be able to agree to opt out under their arbitration agreement.

The commission proposed that the immunity of arbitrators be strengthened and that “case law that potentially holds them responsible for the costs of legal action”, even if the claims are unsuccessful, “be struck down”.

Arbitrators who resign, possibly due to a conflict of interest, should either incur no liability at all for their resignation “or perhaps only if their resignation proves to be unreasonable”.

The commission said there was no need for a new rule on independence but that the case law on disclosure, in which arbitrators are required to disclose connections to the parties or the subject matter of the case, should be codified.

On appeals, the commission said that when a party appeals to the courts on jurisdiction, the appeal should not involve a rehearing of the case. However, where the courts have made an order against a third party under section 44 of the Act to support an arbitration, that party should have a full right of appeal.

Professor Sarah Green, Law Commissioner for Commercial Law and Common Law, said: “The Arbitration Act was landmark legislation that helped propel London to its position as the premier destination for international arbitration today. today.

“Although it continues to work well, more than 25 years later there are parts of the Act that could benefit from updating and tweaking. Our proposals are designed to ensure that arbitration law is effective, efficient and responsive to modern developments.

Justice Minister Lord Bellamy KC added: “After a quarter of a century of success, it is only right that the Law Commission reviews the law to ensure the legislation remains relevant in the 21st century.”