Light at the end of the tunnel

Alternative dispute resolution (ADR) has been a major growth area in the UK in the last two years, with London’s dispute resolution sector in a “pre-eminent position” for international business disputes, suggests recent research.

The success of the ADR sector is partly due to the economic downturn, and will receive a further boost when the new Business, Property and Commercial Court opens in London in 2011.

A total of 34,541 disputes were resolved through arbitration and mediation in the UK in 2009, an increase of more than three-quarters on 2007 figures. Disputes mainly involving international parties rose by 59% over the same period to 5,297 in 2009, according to a report, Dispute resolution in London and the UK 2010, by TheCityUK, an independent financial industry membership body.

Duncan McKenzie, senior manager, economic research, at TheCityUK, says: “The main dispute resolution organisations have experienced a surge in referrals in recent years due to the economic recession and financial crisis.”

The Royal Institution of Chartered Surveyors handled the most referrals, with 8,845 in 2009. It was followed by the Chartered Institute of Arbitrators at 4,659 and the London Maritime Arbitrators’ Association with 4,445: both were up around two thirds from 2007. Disputes referred to the London Court of International Arbitration recorded the biggest increase, more than doubling from 137 to 285.

Khawar Qureshi QC, chairman of TheCityUK’s legal services and dispute resolution group, says the report confirms London’s pre-eminent position for international business disputes.
“The data in the report shows that the ADR sector has grown significantly in the aftermath of the financial crisis.”

In addition, the state of the art Business, Property and Commercial Court to be housed in the Rolls Building in London “will greatly enhance” the UK’s attraction as an international centre for litigation,” he says. The new court is scheduled to become operative next summer.