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Will the New Fixed Costs Regime push parties away from litigation to arbitration and mediation?

Dictionary definition of the word Arbitration

Waleed Tahirkheli, Jenna Kruger and Anastasia May of Eldwick Law recently looked at whether changes to the Fixed Costs Regime (FCR) would push parties in dispute towards arbitration.

In their article, published on the Eldwick website on 5th December 2023, they reported that the new FCR, extended to civil proceedings under £100,000, introduces fixed recoverable costs based on complexity bands, potentially driving parties towards arbitration for cost control.

Key Takeaways:

  • FCR now applies to civil proceedings valued under £100,000.

  • FCR introduces fixed recoverable costs based on complexity bands (1 to 4).

  • Parties may turn to arbitration for cost control and agreements on cost liabilities.

  • Effective arbitration agreements should include provisions such as seat, governing law, inarbitrability, ad hoc or institutional nature, number of arbitrators, language, and opt-out provisions.

  • Poorly drafted arbitration agreements can lead to delays and costs.

  • Businesses should seek expert advice when drafting arbitration agreements.

Gregory Hunt, Founder & Chief Executive of Hunt ADR, says:

Those seeking cost-capped arbitration services should consider Hunt ADR for further information. Our expertise and commitment to efficient, cost-effective dispute resolution makes us a valuable resource for anyone navigating arbitration processes.
Furthermore, arbitration is not the sole solution for disputes that end up in litigation. Mediation, which has gained more strength recently after the Court of Appeal ruling in Churchill v Merthyr Tydfil County Borough Council, still stands as an excellent choice for those who prefer to negotiate an outcome instead of having an arbitrator or the court impose one on them.

Contact us for further information.


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