For parties considering arbitration under the 2020 LCIA Arbitration Rules with the 2023 Schedule of Costs (currently in force) (“LCIA Rules” and “Schedule of Costs”), understanding the costs involved is essential for informed planning.
An LCIA arbitration typically involves five heads of costs: (1.) LCIA administrative fees, (2.) the arbitral tribunal’s fees, (3.) legal fees, (4.) expert fees (if needed) and (5.) hearing costs, all of which are normally recovered from the losing party, under the LCIA Rules and English law, as will be explained below. A table of LCIA arbitration costs can be downloaded here.
1. LCIA Administrative Fees and Expenses
An LCIA arbitration begins with a non-refundable registration fee of £1,950, payable with the Request for Arbitration (Article 1.1(i) of Schedule of Costs). The arbitration is not treated as commenced until this fee is received (Articles 1.1(vi) and 1.4 of the LCIA Rules).
Beyond this, the LCIA charges time-based administrative fees for case management by the Secretariat and LCIA Court, typically £190–£300 per hour, depending on the staff member involved. An additional 5% of the arbitral tribunal’s fees is charged by the LCIA for overheads, along with reasonable expenses such as postage and telephone.
Both the LCIA’s and tribunal’s fees are initially shared equally between the parties, subject to the tribunal’s final allocation in its final award. The LCIA requests an initial advance on costs after registration to cover early stages, including tribunal appointment (LCIA Guidance Note for Parties and Arbitrators (“LCIA Note”), para. 328), followed by further advances as the case progresses (LCIA Note, para. 330).
If there are multiple claimants and/or respondents, each claimant and each respondent is not usually directed to make their own separate payments, so it will be for each side to decide among themselves how the advance should be paid (LCIA Note, para. 329).
At the conclusion of the arbitration, the LCIA normally provides to the parties and the tribunal a final account of the arbitration costs, including details of any excess amounts which were not used from the advance payments made by the parties (LCIA Note, para. 361). Unless the parties agree otherwise (or the arbitral tribunal orders otherwise), any surplus funds are returned to the parties in the proportions in which they were paid (LCIA Note, para. 362).
2. Arbitral Tribunal’s Fees and Expenses
The arbitral tribunal’s fees (usually a sole arbitrator or three arbitrators) are also charged on an hourly basis, typically ranging from £250 to £650, depending on the case’s complexity and any special qualifications required (Article 2(i) of the Schedule of Costs). The presiding arbitrator in a three-member tribunal may charge a higher rate, reflecting his or her greater administrative and drafting responsibilities.
Rates are agreed with the LCIA before appointment and may be reviewed if circumstances change. Fees may include time spent on travel or unused hearing days due to postponements, as well as reasonable expenses (e.g., flights and accommodation for attending hearings) supported by receipts.
If a tribunal secretary is appointed, the hourly rate generally falls between £100 and £250 (Article 6(i) of the Schedule of Costs).
3. Legal Fees and Expenses
Legal fees typically form the largest portion of the total arbitration costs. They include the work of counsel and their teams throughout the proceedings, from case preparation and written submissions to hearings and post-hearing briefs. They also include expenses, such as courier, travel, and accommodation.
Because such fees can be significant and unpredictable (as large law firms tend to charge on an hourly basis), careful budgeting and cost management are essential. By contrast, Aceris Law offers reasonable, capped legal fees for legal representation in international arbitrations, ensuring that clients benefit from high-quality advocacy with clear and upfront cost expectations. Aceris Law, valuing transparency and predictability, has also made available online its own Arbitration Legal Fee Calculator, where parties can have a glance at the legal fees based on the amount in dispute. Alternatively, clients may opt for legal fees on a competitive hourly basis.
4. Expert Fees and Expenses (If Needed)
In complex cases, parties often appoint technical, quantum, or industry experts, whose analyses and testimony can be decisive. Each party bears its own expert costs initially, subject to final allocation by the tribunal. Clearly defining the scope of expert work and coordinating early with counsel can help control these costs.
5. Hearing Costs
Another head of costs that parties must consider is hearing-related expenses. Hearing costs depend on the format (in-person or virtual) and the number of participants. Arbitrators, counsel, witnesses, and experts must usually attend the hearing unless remote testimony is authorised. Expenses typically include venue hire, interpreters (if needed), transcription services, visas, travel, and accommodation. Virtual hearings tend to be more cost-effective, as no travel or accommodation costs are needed. Hearing costs are initially borne equally between the parties, subject to final allocation by the tribunal in the final award.
Failure to Pay the LCIA Arbitration Costs
If one party (typically the respondent) fails to pay the advance on costs, the LCIA directs the other party to pay on its behalf, to allow the arbitration to proceed (Article 24.6 of the LCIA Rules).
In this case, the paying party may request the arbitral tribunal to make an order or award to recover the amount of the payment as a debt immediately due and payable by the defaulting party, together with interest (Article 24.7 of the LCIA Rules; LCIA Note, para. 338). A party that fails to pay may still defend the claim(s) (i.e., resist liability) but cannot pursue counterclaims (for instance, seek its own monetary relief) unless it contributes its share (Article 24.8 of the LCIA Rules).
Allocation of Costs: The Loser Pays
Pursuant to the LCIA Rules, the arbitral tribunal has the power to decide the proportions in which the parties shall bear the arbitration costs determined by the LCIA Court (Article 28.2; LCIA Note, para. 360), as well as the legal fees incurred by the parties “on such reasonable basis as it thinks appropriate” (Article 28.3), unless the parties have already agreed on such cost allocation (for instance, the parties may have already agreed in their commercial agreement to each bear their own arbitration costs).
As a rule of thumb, there are two internationally accepted principles governing cost allocation: the “costs follow the event” rule, which requires the losing party to pay the successful party’s costs and is the prevailing approach in English litigation and international commercial arbitration; and the “costs lie where they fall” rule, which requires each party to bear its own costs and is the prevailing approach in US civil litigation (see further Who Pays the Costs of International Arbitration?).
Both the LCIA Rules and English law follow the “costs follow the event” rule, meaning that costs are generally recoverable from the losing party:
- LCIA Rules: Article 28.4 provides that, when allocating costs, the tribunal shall decide based on the general principle that costs should reflect the parties’ relative success and failure, except where the application of such a general principle would be “inappropriate”. Article 28.4 of the LCIA Rules further provides that the tribunal may also take into account the conduct of the parties and that of their authorised representatives in the arbitration, including any cooperation in facilitating the proceedings as to time and cost and any non-cooperation resulting in undue delay and unnecessary expense.
- English Arbitration Law: Section 61(2) (Award on Costs) of the English Arbitration Act 1996, as amended by the English Arbitration Act 2025) mirrors this approach, stating that “the tribunal shall award costs on the general principle that costs should follow the event except where it appears to the tribunal that in the circumstances this is not appropriate in relation to the whole or part of the costs.”
- English Law: The “costs follow the event” rule is also a cornerstone of English civil litigation, codified in statute and consistently reaffirmed by English courts. A modern reaffirmation of the rule is found in the case of Nori Holdings Ltd & Ors v. Bank Otkritie Financial Corporation [2022] EWHC 1132 (Comm), in which the High Court reaffirmed that “there is no dispute that the Respondents are the successful parties and are entitled to costs orders in their favour” (para. 3). The court applied CPR 44.2(6) (UK Civil Procedure Rules), which allows the court to order one party to pay a proportion of the other party’s costs, and discussed the established principles for issue-based costs orders (para. 4). The court emphasised that while the general rule is that costs follow the event, deductions or apportionment may be made for unsuccessful arguments or conduct that unnecessarily increased costs (para. 4). The relevant part of the decision is reproduced below for ease of reference (para. 4):
4. CPR 44.2(6) provides that the court may order one party to pay a proportion of the other party’s costs. It will sometimes be appropriate to make such an order to reflect particular issues raised or arguments run (Sharp v Blank [2020] Costs LR 835, [7]). The applicable principles in this context are well-established. It is a rare litigant who succeeds on every point (see the authorities cited in R (Viridor Waste Management Ltd) v Revenue and Customs Commissioners [2016] EWHC 2502 (Admin), [9]). The Court of Appeal has warned first instance judges against too great a readiness to reduce costs orders in favour of successful parties on the basis of arguments which did not succeed, particularly where those arguments were alternative routes to the same end (see for example Fox v Foundation Piling Ltd [2011] EWCA Civ 790, [62]). However ultimate success does not provide a blank cheque for advancing arguments where it is not proportionate to do so, or in circumstances in which they will engage significant court and party time and resources but are highly unlikely to be determinative.
While under most leading arbitration rules the tribunal has generally broad power and discretion to allocate costs as it deems appropriate, the LCIA has a clear presumption that costs follow the event, closely aligned to English civil litigation. For instance, the ICC, the HKIAC, and the SIAC leave more to the tribunal’s discretion, though prevailing parties often recover costs in practice (see further Who Pays the Costs of International Arbitration?; Arbitrators’ Discretion in Awarding Costs: Are There Any Limits?).
LCIA Statistics
According to the 2024 LCIA Costs and Duration Analysis (2017-2024) (p. 3), the median LCIA arbitration costs USD 117,653 and lasts a total of 20 months, including the time required for the tribunal to issue the final award, which is typically four months.
This median figure concerns only the LCIA administrative fees and the tribunal fees; it excludes the parties’ own legal and expert costs, which typically make up the largest share of total expenditure, as well as the hearing costs.
Data from the recent 2024 LCIA Costs and Duration Analysis (2017-2024) also indicate that LCIA arbitrations are often more cost-effective than competitive institutions (ICC, SIAC, SCC, and HKIAC), particularly in high-value disputes, while maintaining high procedural standards.
Conclusion
LCIA arbitration costs comprise administrative fees, tribunal fees, legal and expert costs, and hearing expenses, each varying by case complexity and conduct. Understanding these cost elements early allows parties to plan budgets effectively and manage financial exposure, with the “costs follow the event” principle adopted by the LCIA and English law offering a fair prospect of cost recovery for the successful party.
Parties are welcome to contact Aceris Law to receive an estimate of the total costs of an LCIA arbitration.
