Arbitration Act 2025 | Part 3: What did not change?

The Arbitration Act 2025 (“2025 Act”) introduces some important changes to the arbitration framework in England, Wales, and Northern Ireland, while also incorporating other key improvements. In Part 1 and Part 2 of our Series about the 2025 Act, we explore how these reforms to the Arbitration Act 1996 (the “Act”) will affect arbitrations (and arbitration-related court proceedings) once they come into force.

The new law is largely based on recommendations from the Law Commission of England and Wales (“Law Commission”) following its public consultation on the Act. During that consultation process, and the legislative process itself, other important issues impacting arbitral stakeholders were considered for inclusion in the new law, but were ultimately omitted from the 2025 Act. In this Part 3, we examine these issues and their current state of play, namely:

1. Appeals on a point of law (section 69 of the Act)
2. Arbitral Corruption
3. Confidentiality
4. Non-Discrimination
5. Third-Party Funding 

Important topics considered but not addressed by the 2025 Act

1. Section 69 – Appeals on a point of law

Section 69 of the Act allows parties to appeal an arbitral award to the courts on a point of law.  To do so requires either (i) agreement of the parties or (ii) permission of the courts, which is only given if the award is obviously wrong, or open to serious doubt and is a matter of general public importance. Parties may agree to opt-out of this right and some arbitral rules (e.g. LCIA Rules and ICC Rules) contain a blanket opt-out.

This section is an important aspect of arbitrations in England, Wales, and Northern Ireland and its inclusion is a significant deviation from the UNCITRAL Model Law adopted by many jurisdictions.  Many regular arbitration users cite this opportunity for appeal (which is presumed into every arbitration agreement unless expressly excluded by the parties) as a key feature of London as a seat. 

In its consultation process, the Law Commission asked respondents whether any expansion or limitation of this right was seen as desirable.  The resounding response was “no” and users generally felt that section 69 strikes the right balance between promoting finality of arbitral awards and providing an opportunity for blatant errors of law to be corrected.  Notably, in its own recent arbitration law reform consultation, Singapore considered adding a section 69 type opportunity for appeal to its international arbitration regime, but the legislature declined to do so. This unique feature of the 2025 Act continues to set London apart and to underpin its competitiveness globally as an arbitral seat.

2. Arbitral Corruption

During the Law Commission’s consultation process, several respondents said that new provisions addressing allegations of corruption in arbitration should be included in the updated law.  However, this was not included in either the Law Commission’s final recommendations or any drafts of the 2025 Act.  UK Parliament discussed this topic in detail in the legislative process. It led to (i) arbitral institutions being consulted on how they mitigate corruption risks and (ii) Lord Hacking proposing adding mandatory language to section 33 of the Act, namely that a tribunal has a general duty to “safeguard the arbitration proceedings against fraud and corruption”.  After extensive discussion, this proposal was not included because the Law Lords felt:

1. that arbitral corruption is not caused by any issue with our arbitral framework, which already provides several effective remedies to quash corrupt practices; and 
2. assured by the arbitral institutions’ responses as to how they are handling corruption risks.

In reality, corruption has not been identified by commentators as a significant issue in the UK, nor are there many reported instances of corruption amongst arbitrators. This is likely due to the high number of experienced and reputable arbitrators present in the UK, a list which includes former judges, Kings Counsel and senior partners at prominent international law firms. However, and despite this, the UK Government is pushing for the adoption of anti-corruption best practices and says it will support sector initiatives in this regard (like the ICC’s anti-corruption taskforce).  

3. Confidentiality

The 2025 Act is silent on confidentiality, but this was a hotly debated topic during the reform process.  Arbitrations seated in England, Wales and Northern Ireland are subject to general principles of confidentiality, with the contours and limitations of that duty outlined in case law.   The Law Commission did not seek to codify this area of law – which is complex and hence one default position on confidentiality cannot apply to all arbitration cases - and felt that it would be best left to the courts to develop the law of confidentiality “alongside the bespoke practices of arbitral rules”.

In light of this, and given the different approaches to confidentiality adopted in the arbitral rules, it is essential that parties carefully consider the arbitral rules and applicable law when drafting their contracts, and consider whether an express, tailored confidentiality provision needs to be included in their arbitration agreements. The rules of certain arbitral institutions (such as the LCIA) contain specific provisions establishing the confidentiality of arbitral proceedings. Other institutions (such as the ICC) also invite parties to waive confidentiality and to agree to publication of any partial or final award that is issued. This is ultimately for each party to consider and agree to if it is comfortable doing so.  

4. Non-Discrimination

In its September 2022 consultation paper, the Law Commission sought to address non-discrimination (and lack of diversity) in arbitrator appointments by proposing that the 2025 Act:

• Prohibit arbitral appointments on the basis of an arbitrator’s protected characteristics; and
• Render unenforceable arbitration agreements requiring an arbitrator to have a protected characteristic(s), unless in the context of the arbitration in hand it is a proportionate means of achieving a legitimate aim.

After consulting arbitral stakeholders – some of whom felt this proposal was not workable - the Law Commission then broadened the topic and asked if discrimination should generally be prohibited in arbitration and what the remedies should be.  

Ultimately, the Law Commission did not recommend addressing this topic in the 2025 Act.  This was because their review “revealed that the law is already concerned with discrimination in arbitration proceedings in several important ways”. Additionally, the Law Commission concluded that legislating to prohibit discrimination in arbitrator appointments by private parties would not necessarily improve diversity of appointments and might instead lead to unwarranted satellite litigation and award challenges.

Despite the 2025 Act providing no further guidance on this topic, all arbitral stakeholders should continue to make efforts to promote inclusivity and diversity within the global arbitration community, and it is very encouraging that arbitral institutions are now actively doing so.  The LCIA’s new Equality, Diversity and Inclusion (“EDI”) Guidelines, launched in December 2024, are a good example of this, as they are designed to help parties integrate EDI principles across various stages of an arbitration.

It is worth noting that despite there being no legislative requirement, many arbitration practitioners have taken real steps to improving EDI within UK arbitral practice. For example, over 4,000 parties, counsel, arbitrators and institutions have signed the Equal Representation in Arbitration Pledge, established in 2015. These initiatives have led to tangible results – the number of women, for example, appointed as arbitrators nearly doubled from 12.6% in 2015 to 26.1% in 2021. 

5. Third-Party Funding

Although some consultees said that disclosure of third-party funding could be an area of potential legislative reform, the Law Commission did not address third-party funding in its consultation process; hence this topic did not feature in the draft legislation.

However, given the prevalence, and impact, of third-party funding in international arbitration, it remains an important and “hot” topic. This is particularly the case in this jurisdiction following the UK Supreme Court’s decision in PACCAR which held that funding agreements are damages-based agreements (“DBAs”), and, therefore, unenforceable unless they comply with the DBA regulatory regime. This decision has had a significant impact on the funding market, with many funding agreements being renegotiated.

The UK Government has decided to await a report from the Civil Justice Council (due this summer) on its review of litigation funding before deciding whether to legislate to address third-party funding.  The report is expected to make a number of important recommendations.  We will continue to monitor this rapidly developing area, which is expected to impact funding arrangements in the arbitration context.

Missed our commentary on the key changes and improvements in the 2025 Act?