Learning more about costs under the LCIA Rules

Learning more about costs under the LCIA Rules

map_euIn what is hopefully a move towards greater transparency across all institutions, the LCIA has recently revealed two sources of data about its costs and about how its tribunals reach decisions on costs.

LCIA on costs and duration

The London Court of International Arbitration  (LCIA) itself recently released data on the costs and duration of arbitrations. Its comparisons to costs under other institutions has the potential to have ruffled a few feathers (as a general pattern the LCIA data shows that costs in International Chamber of Commerce (ICC) and Singapore International Arbitration Centre (SIAC) arbitration would be more expensive but arbitration under Hong Kong International Arbitration Centre  (HKIAC) would be slightly less expensive).

In respect of costs the data showed that:

  • the mean cost of an LCIA arbitration is US$192,000
  • the median costs of an LCIA arbitration (which the LCIA suggest is the more reliable indicator) is US$99,000

Clearly this only covers the LCIA's arbitration costs, not the parties’ other costs.

ICC decisions on costs

The LCIA has also provided data to the ICC Commission which reported on Decisions on Costs in International Arbitration.

In its submissions to the ICC,  the LCIA examined 46 awards from 2012 from which:

  • in 37 cases, the claimant prevailed in some or all of its claims
  • in 30 cases, the respondent was ordered to pay all of the costs of the arbitration
  • in 32 cases, the respondent was ordered to pay all or most of the claimant's legal costs (15 all, 17 some)
  • the respondent prevailed in eight awards, in six, the claimant was ordered to pay all of the costs of the arbitration (costs were split unequally in the other two). In all eight, the claimant was ordered to pay some or all of the respondent's legal costs
  • in one case, damages claims from both sides were dismissed and the parties ordered to bear their own costs
  • in five cases, each party were ordered to pay their own legal costs. In most of these cases, the tribunal considered that the parties had been equally (un)successful or that the claim arose because of a good faith misunderstanding

The LCIA also examined 46 awards from 2013, which showed that:

  • in 35 cases, the claimant prevailed in some or all of its claims
  • in 26 cases, the respondent was ordered to pay all of the costs of the arbitration, in 32 cases, the respondent was ordered to pay all or some of the claimant's legal costs (15 all, 17 some)

the respondent prevailed in 11 cases, in 10 of these, the claimant was ordered to pay all of the costs of the arbitration and some or all of the respondent's legal costs

in only two cases, each party was ordered to pay its own legal costs. In one case, this was ordered following an agreement between the parties

the costs of the arbitration were split equally in six cases and in proportion to success in six cases

So what does the data show?

Using a very unscientific analysis, these figures would tend to show that parties to LCIA arbitration will pay less in administration fees than at other comparable institutions and, on the whole, over 70% of successful parties (which a claiming party will generally be in some or all respects) will recover some or all of their costs.

Without comparable data from other institutions we cannot draw any concrete comparisons from this data, but, one could suggest that the release of this information has done the LCIA no harm in terms of being a claiming party’s institution of choice.

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