The LCIA has announced it is introducing a number of new measures to its arbitration and mediation services.

The measures include:

• a revised Schedule of Costs for arbitrations and mediations,
• revised terms and conditions, and
• an updated Guidance Note for Parties and Arbitrators, to bring it in line with the 2020 LCIA Rules.

Head of International Arbitration Sherina Petit, senior associate Mark McMahon and knowledge lawyer Olivia Amos review the new measures.

Revised Schedule of Costs for arbitrations

The LCIA has published its revised Schedule of Costs, which introduces a range of hourly rates for the fees of the Arbitral Tribunal, an increase in Emergency Arbitrator fees and an increase in hourly charging rates for tribunal secretaries and the LCIA Secretariat. The Registration Fee (£1,950) remains unchanged.

The revised Schedule of Costs will take effect from 1 December 2023 and apply to LCIA arbitrations registered on or after that date. The previous Schedules of Costs will continue to apply for arbitrations commenced prior to 1 December 2023.

Fees of the Arbitral Tribunal

Unlike other major arbitral institutions such as the ICC, SIAC and CiArb, which set arbitrator fees (in part) according to the monetary value of the claims, the LCIA Court considers the overall complexity of the case and not simply the amount in dispute when setting arbitrator fees.

This holistic approach to setting fees will not change under the LCIA’s new Schedule of Costs. However, the current cap on the Arbitral Tribunal’s fees of £500 per hour will be replaced by a range from £250 to £650 per hour. The increase in the maximum hourly rate from £500 to £650 is intended to address concerns that the hourly rate of £500 was too low for complex and high-value arbitrations.

In addition, the updated ‘Guidance Note for Parties and Arbitrators’ (addressed further below) now helpfully provides examples of what types of cases might justify lower or higher hourly rates for the Arbitral Tribunal (see para 132-133 of Guidance Note). Cases that may require a higher rate include those involving:

• Complicated sanctions issues that go to the substance of the dispute or where multiple sanctions regimes are alleged to impact the merits or substance of the claims
• Significant allegations of fraud
• Complicated shareholders’ disputes
• Satellite litigation, or
• State parties.

By contrast, examples of cases where a lower rate may be set are those involving straightforward debt claims where the only issue to be decided is one of contractual interpretation or cases where the dispute is confined to an assessment of a payment obligation under a guarantee.

Emergency Arbitrator, Tribunal Secretary and LCIA Secretary fees

The application fee for the appointment of an Emergency Arbitrator will be increased from £9,000 to £10,000, and the Emergency Arbitrator’s fee will be increased from £22,000 to £25,000.

The hourly rate for a tribunal secretary will increase from £75 to £175 per hour to £100 to £250 per hour, while the equivalent rates for the LCIA Secretariat will be raised as follows:

• Registrar/Deputy Registrar will increase from £280 to £300 per hour.
• Counsel will increase from £250 to £285 per hour.
• Case administrators will increase from £195 to £220 per hour.
• Casework accounting functions will increase from £165 to £190 per hour.

Revised Terms and Conditions

Revised terms and conditions for the LCIA’s other services have also been introduced. These include revised terms and conditions for (i) fundholding, (ii) the administration of and/or provision of specific services in UNCITRAL arbitrations, (iii) the holding of funds by way of security, and (iv) appointment-only services in adjudication, expert determinations and ad hoc arbitrations.

These changes will also come into effect on 1 December 2023 and apply to all new requests for such services on or after that date where the LCIA agrees to provide them in the proceedings.

Guidance Note for Parties and Arbitrators

An updated Guidance Note for Parties and Arbitrators has also been introduced. This integrates the LCIA’s previous three Guidance Notes (Notes for Parties, Notes for Arbitrators and Notes on Emergency Procedures) and reflects the new 2023 Schedule of Costs. The new guidance note is stated to provide “additional guidance, and points of ‘best practice’” on the application of the LCIA’s Arbitration Rules 2020. It also states that some guidance will be relevant to all LCIA arbitrations.

The guidance note states that as of 1 December 2023, the LCIA’s policy on receipt of funds will be that it will only accept payments from an account held in the name of a party to the arbitration or from an account held in the name of a person(s) or law firm(s) who is authorised to act for that party and who is on the record for that party in the arbitration (see para 37 of Guidance Note).

Revised Schedule of Costs for mediations

In addition to the revised Schedule of Costs for arbitrations, the LCIA has also published a revised Schedule of Costs for mediations, which comes into effect on 1 December 2023 and will apply to LCIA mediations commenced on or after that date. The changes to the Schedule of Costs for mediations include the following:

• The current cap on the mediator’s fees of £500 will be increased to £650.
• The rates for the LCIA Secretariat will be increased on the same basis as the revised Schedule Costs for arbitrations.

Comment

By far the most significant of the revisions is the change in the Arbitral Tribunal’s fees from a flat, maximum cap of £500 per hour to a range of £250 to £650 per hour. While this represents an increase in the maximum hourly rate that may be charged, moving from a cap to a range reinforces that the LCIA will continue to set a fee that is appropriate to the dispute at hand (and, in many cases, should be much lower than £650).

The increase in the maximum hourly rate should also ensure the LCIA remains competitive against other major arbitral institutions and continues to attract high-quality arbitrators.

Sherina Petit, Head of International Arbitration at Stewarts, sits on the board of the LCIA and comments:

“It is great to see that the LCIA, once again, is forward-thinking in its approach. The updates to the LCIA’s services are sensible and forward-thinking, particularly the increase in the level that arbitrators may charge for their fees. This should result in arbitrators wanting to sit more often in LCIA cases because the rate being offered is commensurate with their experience. The range itself is also sufficiently broad that it should accommodate all types of cases.

“As to what was driving the increase in the top rate, arbitrators were calling for it, and users were content to pay accordingly for the arbitrator’s services, so it should be received well by both sides.”

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