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The Arbitration Act 2025 (the AA 2025) came into force on 1 August 2025 and marks the most significant update to the UK’s arbitration framework since the original Arbitration Act 1996 (AA 1996). The AA 2025 modernises procedures, enhances efficiency, and reinforces the UK’s position as a global leader in arbitration.
For the rural sector, especially for landlord and tenant disputes, arbitration is the most common forum. Arbitration allows the appointment of a specialist surveyor or lawyer engaged in an agricultural specialism expertly to manage and resolve disputes, in a more flexible and adaptable process than the civil courts.
What key changes does the AA 2025 bring for the rural sector?
1. Summary disposal powers
The AA 2025 introduces section 39A, granting arbitrators the express power summarily to dismiss claims or defences that have no real prospect of success. These changes mirror the court’s powers to dispose of claims and defences summarily.
This will reduce costs and streamline proceedings by allowing early disposal of weak claims. It could also deter tactical claims or defences brought simply to cause delays or exploit the negotiating positions.
For landlords, this might make the process of resolving Case B notices to quit for developments more straightforward, particularly when all the requirements are met.
Tenants might opt to use this procedure where a particular oppressive landlord is asserting pressure on the tenant without any legal merit.
For those advising the parties, it provides a more cost effective route to dispute resolution.
2. Jurisdictional challenges
The AA 2025 tightens the rules around jurisdictional challenges under Sections 32 and 67 of the AA 1996. Courts are now restricted from rehearing evidence already considered by the arbitrator unless it is in the interests of justice. Furthermore, parties cannot seek a court ruling on jurisdiction e.g. if the Agricultural Holdings Act 1986 applies or not, if the arbitrator has already made a determination.
These changes will prevent duplicative litigation and offer parties increased certainty.
3. Arbitrator’s duty of disclosure and immunity
A new statutory duty requires arbitrators to disclose any circumstances that might reasonably give rise to doubts about their impartiality, including those they ought reasonably to be aware of. Furthermore, arbitrators are now immune from liability for resignation unless it is unreasonable, and they are protected from cost orders unless bad faith is proven.
This should encourage arbitrators to take on complex cases without fear of personal liability or exposure and give the parties greater comfort on conflict issues. Arbitrators are often appointed in the local rural area where they are familiar with the parties. This means that arbitrators must report conflict concerns at the outset of the matter.
4. Court powers
The AA 2025 has widened the powers that the court has in relation to the conduct of arbitration. Courts can now issue orders not only against parties to the arbitration but also against third parties, enhancing the ability to preserve evidence, freeze assets or compel witness testimony.
Conclusion
The AA 2025 will not provoke radical changes for the agriculture industry. However, it will allow greater efficiency for running disputes.
Parties will benefit from increased certainty both from the outset, given the risks of summary awards (where tactical referrals or delay tactics may be used) and after a decision is made, given the barriers now to overturning decisions