Transparency in property arbitration awards: what do you think?

Falcon Chambers?has submitted its response to the Law Commission’s Consultation Paper 257: Review of the Arbitration Act 1996.

The wide-ranging consultation covers all aspects of the 1996 Act and its impact on arbitration law, practice and procedure.??The statute provides a framework for arbitration in England, Wales and Northern Ireland.??Now that the legislation has passed its silver jubilee the time is right to consider how best to refresh it to serve the next 25 years.

The review encompasses many important areas in the field of arbitration, including independence, immunity, summary disposal, jurisdictional challenges, and appeals.

Drawing on the extensive dispute resolution experience of the members of? Falcon Chambers?and?Falcon Chambers Arbitration, especially in relation to the Commercial Rent (Coronavirus) Act 2022 (CRCA) arbitration scheme,?Guy Fetherstonhaugh KC?and? Martin Dray have put together a detailed reply to the Law Commission’s proposals.

We are particularly interested in the issue of confidentiality in property arbitrations.??Currently the default position is that domestic arbitrations are private and confidential.??This confidentiality extends not only to the proceedings themselves but also the awards.

But is this legal secrecy really necessary and appropriate in the 21st?Century???We suggest not.

First, confidence is never absolute.??For instance, appeals on points of law under s.69 of the 1996 Act are heard in court in public, with details of arbitration awards thus disclosed, seemingly with no ill-effect on the arbitral process.

Secondly, the somewhat quaint notion of confidentiality is more honoured in the breach than the observance.??There is a manifest disconnect between legal theory and real-world practice.??What proportion of rent review awards actually remain shielded from public gaze and are not cited as comparable evidence in later cases???Is this departure from confidentiality a bad thing???Does it result in any true harm???Should there be such a startling difference between the determination of rents fixed on review and on renewal? We firmly believe not.??Indeed, we consider that transparency is positively a good thing for both the open market and practitioners, and it serves to promote the understanding and development of law and valuation, and to achieve consistency of outcomes.

Thirdly, there is no one-size-fits-all.??CRCA s.18 mandates that awards must be published together with the reasons for them, excluding only confidential commercial information which would or might significantly harm the legitimate business interests of a party.??This has resulted in a plethora of CRCA awards on the FCA website for all to see – with more in the pipeline.??This is surely helpful to all who practise and advise in the area.

https://www.falcon-chambersarbitration.com/crca/awards]

Why shouldn’t this ‘open book’ approach be applied generally to all domestic property arbitrations???In our view, it plainly ought to be.??We see the benefits of transparency as heavily outweighing any contrary factors, especially in the light of the protection afforded to truly sensitive material.

What do you think???We (and, we think, the Law Commission) would be very interested in your views