Notes on the cost capping provisions of the Arbitration Act 1996

 

DRAFT

The information herewith gives general guidance. It should not be regarded or relied upon as a complete or authoritative statement of the law or treated as a substitute for specific legal advice concerning individual situations. Read our full legal notice on the left.

 

The Arbitration Act 1996 consolidated earlier provisions and gave "power back to the parties" to control their disputes by appointing an independent Arbitrator in a quasi judicial capacity to provide an Arbitration Award that is final, confidential, private and enforceable as a County Court Judgement. 

 

There are specific provisions in the 1996 Act that apply the concept of proportionality of costs to the value of the sums in dispute.  Section 65 of the Arbitration Act 1996 gives the Arbitrator the power to cap recoverable costs that might be awarded against a party if they lose.  Either party can still expend whatever they like on professional advice but only that pre designated capped sum will be awarded to them in costs to be paid by their opponent if that party wins their claim.  This has the effect of striking a balance between opponents of different sizes and wealth to limit the financial risk of entering an arbitration.

 

Kay Linnell

Kay Linnell & Co

 

The information herewith gives general guidance. It should not be regarded or relied upon as a complete or authoritative statement of the law or treated as a substitute for specific legal advice concerning individual situations. Read our full legal notice on the left.

 

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