Arbitrators’ Fees

ARBITRATORS’ FEES

The recent increase in Lloyd’s Open Form salvage arbitrators’ fees has prompted us to compile a study of the fees payable to arbitrators in other specialist London arbitral fora. The study was compiled in February and March this year and is derived from a number of sources including arbitral secretariats, barristers’ clerks, arbitrators themselves and this firm’s experience.

Generally the broader the range of arbitrators the wider the range of hourly rates. Q.C.s seldom try to charge more than £450 per hour for sitting, reading into a case and producing the award which is less than many charge for advocacy work but still seems high to some users of the system.

We have not attempted to cover all the commercial arbitration options available in London (such as, for example, the infrequently used collision and salvage arbitration service offered by the Admiralty Solicitors’ Group) but have focused on the more frequently used systems.  One lesson to draw from this information is that it is possible in many cases to negotiate a better hourly or daily rate at the outset of the case than might otherwise be available if this is left to be addressed later or, as frequently happens, not at all.

Arbitrators’ Fees Under Various Arbitration Systems

Appointment Fee

Booking Fee when Hearing Date is fixed

Charge-out Rate per hour

Cancellation Fee

 

Range

Average

1. LCIA None[1] None

£250-£450

None available

Cancellation fees are only recoverable by arbitrators if agreed by the parties.  If the case settles the Tribunal is entitled to fees for work actually done. [2]
2. ICC Yes[3] – Provisional advance Yes3 – Advance on costs

N/A: Fees are primarily calculated by reference to the amount in dispute and other factors – see ICC’s Costs Calculator e.g. For a US$3m claim the average fee of a sole arbitrator would be about $70,000 or £46,650

No cancellation fee is payable but the ICC Court will award the Tribunal costs which take into consideration the amount of work done (e.g. how spent on the case) and disbursements incurred until notified of the cancellation. 3
3. LMAA Yes£250 Yes[1]Payable within 14 days of reservation.  For Hearings of less than 10 days, a fee of £1,000 per hearing day per arbitrator;Hearings 10-14 days: £1,300 per hearing day per arbitrator;Hearing 15-20 days: £1,600 per hearing day per arbitrator;Over 20 days – as agreed. 

£125-£450

£275

The Appointment fee and booking fee is not returnable if the hearing is cancelled less than 3 months before the hearing date.  50% of the booking fee is refunded if the date is vacated more than 3 months before the hearing all at the Tribunal’s discretion.
4. GAFTA None.  But a deposit of up to £5,200 is payable once the Tribunal is constituted and the claim submissions have been received (GAFTA Arbitration Rules No. 125 Rule 4.1) None

£125-£300

£175

No, but the Tribunal is entitled to charge for work actually done at his hourly rate.  This would usually be taken from the deposit.
5. LOF (Up to 31/12/2012) None(But security for costs is required) None at present referred to in any LOF Rules or Clauses.  However LOF arbitrators are operating a system.[2]

£4,000 p.d. or £400 ph

(2010-12)

As for booking fees – see 5 below.


[1] LMAA Rules, Schedule one, Para D.  The rate of £1,000 p.d. runs from 01.06.2012.

[2] Booking/Commitment Fees

 

  1. From time to time, the Arbitrators will notify Lloyd’s of the daily sitting rates to be charged by them in arbitration hearings. The daily sitting rate to be charged by an Arbitrator where an arbitration has been fixed for hearing between 2010 and 2012 is £4,000 (plus VAT where applicable). 
  1. The following booking/commitment fees are payable: 
  1. Save where the hearing is fixed for 2 days or less, or for more than 20 consecutive days, as soon as dates are fixed for the hearing,15% of the total sitting fee for the hearing becomes due and payable in any event. 
  1. In addition to the booking fee referred to in (3) above, the following commitment fees are payable: 

(a)     25% of the total sitting fee that would have been due for the hearing if the hearing is vacated 3 calendar months or less but more than 1 calendar month before the date fixed for the hearing.

(b)     50% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 calendar month or less but more than 1 week before the date fixed for the hearing.

(c)     60% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 week or less before the date fixed for the hearing.

(d)     75% of the total sitting fee that would have been due for the hearing if the hearing is cancelled on or after the first day of the hearing.

  1. Where the hearing has been fixed for 2 days or less, but that date is then vacated and a request is made to re-fix the hearing for a later date, the booking fees referred to in 3 and 4 above shall apply to the re-fixed hearing. 
  1. Where the hearing has been fixed for more than 20 consecutive days, as soon as dates are fixed for the hearing, 15 % of the total sitting fee for the hearing becomes due and payable in any event. In addition to this booking fee, the following commitment fees are payable: 

(a)     30% of the total sitting fee that would have been due for the hearing if the hearing is vacated 3 calendar months or less but more than 1 calendar month before the date fixed for the hearing.

(b)     60% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 calendar month or less but more than 1 week before the date fixed for the hearing.

(c)     70% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 week or less before the date fixed for the hearing.

(d)     75% of the total sitting fee that would have been due for the hearing if the hearing is cancelled on or after the first day of the hearing.

 


[1] A registration fee of £1,750 is payable upon commencement of LCIA arbitration proceedings.  If LCIA is acting as an Appointing Authority only a charge of £1,250 is payable but neither charge goes to the arbitrator.

 

[2] LCIA Rule 1998, Rule 28.5.  The LCIA has a standard cancellation formula which may be adopted by the Tribunal if a hearing is cancelled or postponed late as follows: “In the event of cancellation or postponement less than 4 weeks before the start of the hearing, or at any time during the hearing, the Tribunal may charge 50% of its notional daily sitting rate, based on a [?]-hour day multiplied by the number of days reserved for the hearing; and in the event of cancellation or postponement more than 4 weeks, but less than 12 weeks, before the start of the hearing, 30% of its daily sitting rate multiplied by the number of days reserved for the hearing.” 

The notional sitting day, to be inserted in the formula, will be agreed by the Tribunal, once appointed, and is subject to a maximum of 8 hours.

[3] A non-refundable filing fee is chargeable upon commencement of ICC arbitration proceedings.  The Secretary General will request a provisional advance payable by the claimant which is intended to cover the costs of the arbitration until the “Terms of Reference” are completed.  Until the provisional advance is paid the ICC will not constitute the Tribunal.  This is followed by a request for an “Advance on costs” after the “Answer”/or counterclaim is filed.  The Advance is borne equally by the parties.  The Court of Arbitration fixes the costs of the arbitration (i.e. the ICC’s administrative costs and arbitrators’ fees) at the end of the case taking into account the amount a stake, the hours worked by the Tribunal, the seniority of the arbitrators, the complexity of the issues and any other issues relevant to the particular case.

A registration fee of £1,750 is payable upon commencement of LCIA arbitration proceedings.  If LCIA is acting as an Appointing Authority only a charge of £1,250 is payable but neither charge goes to the arbitrator.

[1] LCIA Rule 1998, Rule 28.5.  The LCIA has a standard cancellation formula which may be adopted by the Tribunal if a hearing is cancelled or postponed late as follows: “In the event of cancellation or postponement less than 4 weeks before the start of the hearing, or at any time during the hearing, the Tribunal may charge 50% of its notional daily sitting rate, based on a [?]-hour day multiplied by the number of days reserved for the hearing; and in the event of cancellation or postponement more than 4 weeks, but less than 12 weeks, before the start of the hearing, 30% of its daily sitting rate multiplied by the number of days reserved for the hearing.” 

The notional sitting day, to be inserted in the formula, will be agreed by the Tribunal, once appointed, and is subject to a maximum of 8 hours.

[1] A non-refundable filing fee is chargeable upon commencement of ICC arbitration proceedings.  The Secretary General will request a provisional advance payable by the claimant which is intended to cover the costs of the arbitration until the “Terms of Reference” are completed.  Until the provisional advance is paid the ICC will not constitute the Tribunal.  This is followed by a request for an “Advance on costs” after the “Answer”/or counterclaim is filed.  The Advance is borne equally by the parties.  The Court of Arbitration fixes the costs of the arbitration (i.e. the ICC’s administrative costs and arbitrators’ fees) at the end of the case taking into account the amount a stake, the hours worked by the Tribunal, the seniority of the arbitrators, the complexity of the issues and any other issues relevant to the particular case.

[4] LMAA Rules, Schedule one, Para D.  The rate of £1,000 p.d. runs from 01.06.2012.

[5] Booking/Commitment Fees

  1. From time to time, the Arbitrators will notify Lloyd’s of the daily sitting rates to be charged by them in arbitration hearings. The daily sitting rate to be charged by an Arbitrator where an arbitration has been fixed for hearing between 2010 and 2012 is £4,000 (plus VAT where applicable).
  2. The following booking/commitment fees are payable:
  3. Save where the hearing is fixed for 2 days or less, or for more than 20 consecutive days, as soon as dates are fixed for the hearing,15% of the total sitting fee for the hearing becomes due and payable in any event.
  4. In addition to the booking fee referred to in (3) above, the following commitment fees are payable: 

(a)     25% of the total sitting fee that would have been due for the hearing if the hearing is vacated 3 calendar months or less but more than 1 calendar month before the date fixed for the hearing.

(b)     50% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 calendar month or less but more than 1 week before the date fixed for the hearing.

(c)     60% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 week or less before the date fixed for the hearing.

(d)     75% of the total sitting fee that would have been due for the hearing if the hearing is cancelled on or after the first day of the hearing.

5.  Where the hearing has been fixed for 2 days or less, but that date is then vacated and a request is made to re-fix the hearing for a later date, the booking fees referred to in 3 and 4 above shall apply to the re-fixed hearing.

6.   Where the hearing has been fixed for more than 20 consecutive days, as soon as dates are fixed for the hearing, 15 % of the total sitting fee for the hearing becomes due and payable in any event. In addition to this booking fee, the following commitment fees are payable: 

(a)     30% of the total sitting fee that would have been due for the hearing if the hearing is vacated 3 calendar months or less but more than 1 calendar month before the date fixed for the hearing.

(b)     60% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 calendar month or less but more than 1 week before the date fixed for the hearing.

(c)     70% of the total sitting fee that would have been due for the hearing if the hearing is cancelled 1 week or less before the date fixed for the hearing.

(d)     75% of the total sitting fee that would have been due for the hearing if the hearing is cancelled on or after the first day of the hearing.

[6]1.   Where a hearing is fixed for two days or less, the following commitment fees are payable:

(a)     25% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 1 calendar month or less before the date fixed for the hearing.

(b)     50% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 2 weeks or less before the date fixed for the hearing.

(c)     The whole of the siting and reading fee that would have been due for the hearing if the hearing is cancelled 2 days or less before the date fixed for the hearing.

2.   Where a hearing is fixed for 3-9 days the following commitment fees are payable:

(a)     15% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 3 calendar months or less before the date fixed for the hearing.

(b)     30% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 6 weeks or less before the date fixed for the hearing.

(c)     40% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 4 weeks or less before the date fixed for the hearing.

(d)     50% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 3 weeks or less before the date fixed for the hearing.

(e)     60% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 2 weeks or less before the date fixed for the hearing.

(f)      75% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 1 week or less before the date fixed for the hearing.

(g)     The whole of the sitting and reading fee that would have been due for the hearing if the hearing is cancelled 2 days or less before the date fixed for the hearing.

3.   Where a hearing is fixed for 10 days or more, the following booking and commitment fees are payable:

(a)     15% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 3 calendar months or less before the date fixed for the hearing.

(b)     25% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 2 calendar months or less before the date fixed for the hearing.

(c)     30% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 6 weeks or less before the date fixed for the hearing.

(d)     40% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 4 weeks or less before the date fixed for the hearing.

(e)     50% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 3 weeks or less before the date fixed for the hearing.

(f)      60% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 2 weeks or less before the date fixed for the hearing.

(g)     75% of the total sitting and reading fee that would have been due for the hearing if the hearing is vacated 1 week or less before the date fixed for the hearing.

(h)     The whole of the sitting and reading fee that would have been due for the hearing if the hearing is cancelled 2 days or less before the date fixed for the hearing.

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  • Ben Browne Consultant

    Ben is a member of our Shipping group and a member of the Emergency Response team. He specialises in Insurance and Reinsurance work and has a particular emphasis on casualty work.

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