Niamh Leinwather, Secretary General of the Vienna International Arbitral Centre, stepped in to moderate this International Arbitration Forum session and brought an institutional perspective. She was joined by Miljana Bigovic, Managing Associate at DLA Piper in Stockholm, who spoke from the counsel’s seat, and Michail Risvas, Lecturer in Law at the University of Southampton, who drew on both academic and recent case experience. Andrew Mackenzie contributed a Scottish arbitration perspective.

Overview

Leinwather opened with the Queen Mary survey: of more than 1,200 respondents, 90% still prefer international arbitration for cross-border disputes (alone or combined with ADR), yet many would give up features such as unlimited written submissions for a cheaper, faster process. She reframed the question from whether arbitration is expensive to whether it is worth the cost. Bigovic was candid that counsel are the problem, since their fees are the largest cost and counsel also do most of the work.

Bigovic described a third-party funder who regarded legal fees above 10% of the value in dispute as unreasonable, a threshold often exceeded in practice; a €2 million dispute could generate counsel costs of around €500,000. She also noted criticism, voiced by Philippe Sands at a Harvard conference, of firms raising excessive issues and filing submissions too long to be read. Yet she argued that fees reflect a market and not a monopoly. Risvas suggested that market forces will push prices down as arbitration expertise spreads beyond a handful of hubs, and that AI may contribute. Mackenzie argued that cost problems often start at contract drafting, because parties rarely consider the cost implications of their dispute resolution clause. In his view, institutional charges are seldom the main burden.

On practical levers, Leinwather noted that expedited proceedings are popular and can instil discipline, but parties who have not agreed to them in the clause rarely agree once a dispute arises. Risvas cautioned that low value does not mean simplicity, citing a roughly US$25 million case involving more than seven witnesses, three technical experts and a hearing of a week and a half. Bigovic had mixed views on tribunals policing costs: it depends on whether the arbitrator knows the market, and fear of curtailing a party’s right to be heard can produce endless submissions and blown cost estimates. On AI, she warned that checking its output can add hours, while Leinwather described an award containing an apparent AI-generated remark, which the centre flagged for deletion. Institutional guidelines encourage parties to discuss AI use at the case management stage, though few record it in procedural orders.

Key Takeaways

• Counsel fees are the main cost driver. Lawyers should scrutinise their own staffing, submission length and cost estimates, because clients and funders measure fees against the value in dispute.
• Costs are shaped at the drafting stage. Advisers should help clients compare institutions and procedures, including expedited rules, before agreeing a clause.
• Put expedited procedure in the clause where appropriate. Parties in dispute rarely agree to it afterwards.
• Do not equate low value with low complexity. Early strategy discussions should test whether a fast track genuinely suits the dispute.
• Tribunals have a role in cost discipline. Firm case management, reading submissions and considering conduct when allocating costs can curb escalation, provided arbitrators understand market rates.
• AI may add work before it saves any. Verification time and uncertain disclosure expectations mean counsel should raise AI use early in procedural discussions.