3 August 2011 | By John Blauth
Change is required to make the arbitration process on commercial rent reviews fairer and more responsive, according to Anthony Lorenz, Senior Partner at The Lorenz Consultancy.
Lorenz proposes that if arbitrators were empowered to set the fees for all parties in a case on a winner-takes-all basis, abuse of the system by expert witnesses could be halted.
He also recommends a new scale of charges for arbitrators or expert witnesses in place of the current fixed sum.
“I believe that the costs should be levied on a percentage of the rent, say 1.5 per cent of the annual agreed sum, with the current £369 fee being retained as a minimum,” he says.
“Clearly people are using the process to kick on and give impetus to discussions. If the fees were high, I believe this abuse might diminish.”
Lorenz also puts forward the idea of a forum of arbitrators to recommend experts for individual reviews, and the introduction of practical measures to combat the issue of long delays in the determination of awards, including repeat fees incurred until a settlement is reached.
By raising these issues in this article, Anthony Lorenz hopes to raise debate within the industry about what steps can take to encourage parties to settle negotiations without abuse of the arbitration process.
The arbitration process: Time for change?
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