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17 Extent of immunity for arbitrators

237 SECTION 13 OF THE ARBITRATION ACT provides:

An arbitrator is not liable for negligence in respect of anything done or omitted to be done in the capacity of arbitrator.

238 The question has been raised with us as to whether that immunity ought to be extended beyond negligence so as to preclude the possibility of speculative causes of action being framed to defeat the objective of section 13. Given that, for reasons set out in paragraph 15 above, the arbitrator is a party to the arbitration agreement, the fact that a claim may be brought in contract creates an issue as to whether the term “negligence” is sufficient.

239 The Arbitration Act 1996 (UK) provides an immunity for arbitrators in the following terms:

29.-(1) An arbitrator is not liable for anything done or omitted in the discharge or purported discharge of his functions as arbitrator unless the Act or omission is shown to have been in bad faith.

240 Given that the basis for arbitral immunity is the analogy with judicial immunity, it seems to us to be preferable to express the immunity in the terms adopted in the United Kingdom. In passing, we note that the choice of words in section 13 of our Act is taken from Australian precedent.²³⁷

241 While expressing the view that the wording adopted in the United Kingdom may be preferable, we take the matter no further as we have not consulted on the issue. If legislation is introduced to give effect to recommendations in this report, it will be for the sponsoring minister to decide whether to amend section 13 in the manner suggested, or leave the matter for submissions to a select committee.