The LCIA has published its analysis on the costs and duration of cases it administered between 1 January 2017 and 12 May 2024. The report revealed that the median amount in dispute in these cases was $4.6 million, with at least 61 disputes exceeding $100 million in value.
In high value cases like these, is it possible to achieve value for money?
Arbitration can be seen as a cheaper alternative to litigation (although whether or not that translates in practice is debatable). However, parties tend to have more flexibility over the process of arbitration than they do in litigation.
Perhaps if parties can find a way to arbitrate more efficiently, there is a more compelling case for these high value disputes to be resolved through LCIA arbitration.
In this article, we look at the ways in which the LCIA has modernised its practices to make resolving disputes more efficient. We also consider the ways in which parties can take advantages of the flexibility of LCIA arbitration to resolve their disputes in the most cost-effective manner.
The new summary dismissal mechanism
In its 2020 rules, the LCIA introduced a process for the early determination of claims or defences. This reduces the risk to the parties of wasted time and costs on claims that are entirely without merit or outside the jurisdiction. Bolstering this power, the new Arbitration Act 2025 empowers tribunals to grant awards on a summary basis.
This should dissuade parties from starting vexatious claims, or claims that are unlikely to be successful. Even if a party begins a doomed claim, it can now be quickly nipped in the bud before the costs escalate.
However, it remains unclear where lines will be drawn in the contrast between the legislation and the LCIA rules themselves. Currently the LCIA rules require claims/defences to be “manifestly without merit”, where the new legislation requires “no real prospect of success” – arguably a lower bar. It is unlikely that the LCIA will lower the standard.
In any event, having this power to summarily dismiss unmeritorious claims will make LCIA arbitrations more efficient.
Appointing arbitrators with sector-expertise
Perhaps one of the greatest advantages of arbitration over litigation is the ability to choose the arbitrator for the dispute. This means that parties can appoint arbitrators with sector-specific knowledge. In particularly technical areas, this can save time and costs in the dispute, and minimise appeals on possible errors in law, as the arbitrator understands the issues in dispute.
This can be particularly useful in specialist areas such as cryptocurrency, construction, and shipping for example.
Getting the best result through arbitration
Remember that if you want LCIA arbitration as an option to resolve your dispute, you need written agreement between the parties. That usually comes in the form of an express Governing Law and Jurisdiction clause in your contracts.
It may be worth having a periodic review of your contracts to check that you have LCIA arbitration as an option, if you think the flexibility and technical expertise would help to resolve your disputes more quickly.
At Rahman Ravelli, we have expertise in this area and can review your relevant contact for you to advise whether you already have an arbitration agreement in place or not.
