The City Disputes Panel is negotiating with the States of Jersey for a five-figure sponsorship deal amid reports from City firms that the financial services mediation and arbitration service is being less well used than expected.
The non-profit-making organisation receives no Government support, and its main source of funding is fees. Arbitrators are likely to charge between £1,250 and £2,000 a day.
The director of the States of Jersey financial services department, Richard Syvret, said it planned to sponsor the panel in an effort to prevent its courts from becoming overburdened.
“The figure we are discussing with the panel is very small in comparison with the potential for saving court time and benefits to the parties who are in dispute,” said Syvret.
But a corporate partner at a leading City firm, which pays £1,000-a-year corporate membership to the panel, said the panel was towards the bottom of its considerations when deciding how to resolve disputes. He said: “We tend to think of the panel as a way for blue-blooded City organisations to settle quietly and without much fuss. The first choice for most remains litigation through the courts.”
Lawrence Collins, head of the litigation and arbitration department at Herbert Smith, confirmed that his firm had acted for clients in some major settlements brokered by the panel. He said his impression was that so far it was only in special circumstances (especially with multiple parties) that the panel became actively involved in major disputes.
But Richard Freeman, chief executive of the City Disputes Panel, angrily denied it was in urgent need of extra sponsorship money.
He said sponsorship was a form of “disproportionate subscription or super membership”.
“We are profitable. We have been so active that our fees have been sufficient to cover our costs. We did not approach Jersey, they came to us,” he added.