Exploring Uncharted Territory: Which Anticipated Amendments to the Arbitration Act 2025 Weren't Included and the Reasons Behind Their Omission?
The Arbitration Act 2025, which came into effect on August 1, 2025, has brought significant changes to the arbitration landscape in England, Wales, and Northern Ireland. However, one key aspect that remains unchanged is the approach to arbitral confidentiality.
Unlike some other jurisdictions, the Arbitration Act 2025 does not introduce a statutory presumption or rule of confidentiality in arbitration. Instead, confidentiality is primarily upheld through the parties’ agreement and implied duties recognized by courts.
The Law Commission, an independent body that reviews the law of England and Wales, considered introducing a new provision to explicitly state that arbitrations are private and confidential, but they decided against it. The Commission concluded that a statutory rule on confidentiality would not be sufficiently comprehensive, nuanced, or future-proof.
The Civil Justice Council (CJC), which is currently leading a review of the UK third-party funding market, has recommended a different approach. The CJC Report suggests that litigation funding of arbitration proceedings not be subject to formal regulation. Instead, it proposes a "light-touch regulation of litigation funding."
The issue of corruption in arbitral proceedings has gained increased prominence in recent years, with similar reports of affected proceedings in other jurisdictions. Despite this, the Law Commission did not recommend any new legislative provisions to address the issue of corruption.
The CJC Report also recommends that the effect of the Supreme Court's decision in PACCAR be reversed by legislation, confirming a categorical difference between contingency fee funding and litigation funding. The Report further recommends separate regulatory regimes for the two types of funding.
It is yet to be seen how the Government will respond to the findings and recommendations in the CJC Report. For the time being, it seems unlikely that any further legislative amendments will be made to the AA 2025 with respect to third-party funding of arbitral proceedings in England and Wales.
The AA 2025 largely enacts recommendations set out in a report from the Law Commission (the "Law Commission Report"). Section 69 of the AA 1996, which entitles parties to appeal against an arbitration award on a point of law, remains unchanged in the 2025 Act. Successful appeals under Section 69 remain few and far between.
In conclusion, the English approach to arbitral confidentiality continues to be governed by party agreements and established case law without a statutory confidentiality rule. This position is maintained by the Arbitration Act 2025 despite its comprehensive reforms.
In light of the Arbitration Act 2025, the English business landscape continues to separate international arbitration from litigation, with the former primarily relying on party agreements for confidentiality, unlike some other jurisdictions. Meanwhile, the Civil Justice Council (CJC) has proposed a different approach for third-party funding of arbitration proceedings, suggesting a "light-touch regulation" rather than formal regulation, and advocating for distinct regulatory regimes for contingency fee funding and litigation funding.
