We had earlier posted about the CIArb here. The results are out. CIArb's Costs of International Arbitration survey ran from November 2010 to June 2011 and was completed by lawyers and international arbitrators from five continents. Information on 254 international arbitrations conducted between 1991 and 2010 was considered to be useful for statistical analysis.
71% of respondents described themselves as party representatives, 25% as tribunal members and 4% did not identify with either category. Over 50% of respondents were from the UK (32%) and the rest of Europe (20%). The remaining 48% came from Asia, the Middle East, Africa, North America, Australasia and other locations.
The survey aimed to gather detailed data about the costs of international arbitration, how those costs are made up, the allocation of costs by arbitrators and the extent to which these may depend upon the nature of the dispute, the seat of arbitration, the amount in dispute, the composition of the arbitral tribunal and the costs incurred prior to, and during, the arbitration.
The survey results were presented at CIArb's Costs of International Arbitration Conference in London on 27 September 2011.
Doug Jones AM FCIArb, President of the Chartered Institute of Arbitrators (CIArb), highlighted the need for arbitrators to draw on a ‘toolkit of processes’ in order to control the rising costs of international arbitration.
Speaking at the end of the first day of CIArb’s Costs of International Arbitration Conference in London yesterday, Doug Jones said ‘After today there is no doubt that costs are an issue for users of international arbitration. This conference is a step on the right path. There is going to be an ongoing exercise in transparency in arbitration costs from now on, building on what we know already.
The key issue arising from the conference is the need for flexibility of process, designed to produce the most suitable process for each dispute. In doing so, international arbitrators need to have a toolkit of processes which can be deployed as appropriate. Various potential ‘tools’ have already been identified. For example, 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.
Key to the process is a need to gain a deeper understanding of the issues early on in a particular dispute, in order to design processes to fairly and expeditiously resolve those issues.’
Amongst other findings, the survey results indicate that the costs of international arbitration vary depending on where the arbitration takes place, with the UK as the most commonly chosen arbitral seat for survey respondents. Claimant costs noted in this survey averaged nearly 10% higher in the rest of Europe compared with in the UK, while external legal fees were over 26% higher in the rest of Europe. Common costs, such as arbitrators’ fees, were reportedly over 18% higher in Europe than in the UK. Furthermore party costs were returned as around 13% higher in civil law countries than common law countries.
The survey results also showed that claimants spent 12% more than respondents, and that the average length of an arbitration was between 17 and 20 months.
According to the survey, 62% of arbitral proceedings were administered by an institution, with the ICC appearing as the most popular choice for institutional arbitrations.
Humphrey Lloyd FCIArb, Chair of the Conference Organising Committee said ‘CIArb’s survey has produced much needed data about international arbitration and its costs. It provides us with a better understanding of what is involved and should pave the way for further investigations, since, like many surveys, the results need to be studied with care and its limitations must be recognised.’
The conference which welcomed over 100 delegates from the UK, Europe, the US, China, Hong Kong, Singapore, and Australia, amongst others – brought experts in international arbitration together to explore the new data and to discuss how and why costs are incurred with a view to finding ways of making the international arbitration process more efficient and cost effective.
Key speakers include Peter J. Rees (Royal Dutch Shell plc); Michael Schneider (LALIVE, and President of the ASA); Constantine Partasides (Freshfields Bruckhaus Deringer LLP); and David Brynmor Thomas (Thirty-Nine Essex Street).
The Survey is available here.
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