CIArb Publishes Cost Survey

The CIArb's Survey into the Costs of International Arbitration has now been published. It's a fascinating survey worthy of study and discussion. Here's a brief summary of some of the findings:

"What did they spend it on? Regardless of the nature of the dispute and the amount of money that a party spent (whether claimant or respondent), the cost breakdown by percent was remarkably much the same. Six cost categories were listed in the survey; Chart 12 illustrates the percentages allocated to each one. 74% of party costs were spent on external legal costs (including where applicable barristers’ fees), with the remaining 26% spread across the other headings. For example, as Chart 12 indicates, out of a total expenditure of £1,000,000, the costs a party would incur might be distributed as follows:

■ £740,000 for external legal fees

■ £100,000 for experts’ fees and expenses

■ £80,000 for external expenses

■ £50,000 for witness fees

■ £30,000 for management costs"

"Of the 74% of costs referred to on the preceding page, Chart 13 shows that, irrespective of the nature of the dispute, parties spent 19% on the pre-commencement/commencement of the arbitration, 25% on the ex-change of pleadings, 5% on discovery, 14% on fact and expert witnesses,* and the remaining 37% on the hearing (before, during and after). To illustrate the practical application of these percentages, a party with external legal costs of £740,000 might have spent:

■ £140,600 on pre-com/com work

■ £185,000 on the exchange of pleadings

■ £37,000 on discovery

■ £103,600 on witness costs

■ £273,800 on the hearing (before, during and after)"