Empirical Data On The Cost Of International Arbitration
The CIArb Costs of International Arbitration Survey, based on 254 arbitrations conducted between 1991 and 2010, contains the most extensive analysis of the cost of international arbitration to date. The survey included data from ICC, LCIA, LMAA, AAA, SCC, ad hoc and other types of arbitrations, and found the overall average cost of international arbitration to be approximately GBP 1,580,000 (USD 2.6 million or EUR 2 million using September 2014 exchange rates) for Claimants, and approximately 10% less for Respondents.
The precise breakdown of how much each party spent, on the basis of three ranges of amounts in dispute, is shown in the table below, taken from the CIArb Survey.
While not insignificant, arbitrator fees and administrative expenses (common costs) represented only 20% of the total cost of international arbitration according to the findings of the survey. This corresponds to previous findings of the ICC, which similarly determined that roughly 20% of all costs are for arbitrator fees and administrative expenses.
Party costs, found by the survey to be between GBP 1,348,000-1,521,000 per arbitration, included the costs of experts, witnesses and arbitration legal fees and represented 80% of overall costs. 74% of party costs were attributable to the costs of arbitration legal fees, implying average international arbitration legal fees of GBP 997,520-1,125,540 (USD 1.6-1.8 million or EUR 1.3-1.4 million) per arbitration.
In order to reduce arbitration costs dramatically, a high-quality but cost-effective boutique arbitration law firm such as Aceris Law SARL may be used for legal representation, since legal fees constitute by far the greatest single expense.
The full CIArb Costs of International Arbitration Survey 2011 is shown below.