Cost is usually discussed in the wrong way. The instinctive question is which forum is cheaper. Arbitration and litigation generate costs differently, so the better question is: which forum has the more suitable cost-risk profile for the dispute the business is likely to face?

Under Article 32 of the 2018 DIS Rules and Article 41 of the 2026 ICC Rules, the costs of the arbitration include arbitrators’ fees and expenses, institutional administrative fees, the fees and expenses of tribunal-appointed experts, reasonable party costs including legal fees, and, if applicable, party-appointed expert and witness expenses. Cost allocation is left to the tribunal’s discretion, taking into account all relevant circumstances, including the outcome of the proceedings under the DIS Rules and the parties’ procedural efficiency under both sets of rules. Under Article 40 of the 2026 ICC Rules, advances on costs are now fixed by the Secretary General rather than the Court, although certain matters may still be referred to the Court.

Ordinary litigation has a very different cost architecture. German court litigation is more structured at the front end. Statutory lawyers’ fees under the German Lawyers’ Remuneration Act (Rechtsanwaltsvergütungsgesetz) and court fees are generally calculated by reference to the amount in dispute, which makes the baseline cost picture easier to estimate in many standard disputes, though parties usually agree on hourly fees that exceed the statutorily recoverable amount.

Arbitration may allow broader cost recovery for the winning side, but it also creates wider downside exposure for the losing side. Multi-party cases can accentuate that. In practice, procedural choices such as document production, transcript use, and expert evidence often drive arbitration costs more than the nominal filing stage ever does.

This is why lower-value disputes often still point towards court litigation, while higher-value international disputes may justify arbitration’s broader cost architecture because neutrality, enforceability, tailored confidentiality protections, and expertise matter more. Lower cost at the start is not necessarily lower cost over the full life cycle of the dispute.

Reed Smith’s Arbitration Pricing Calculator enables users to forecast arbitration costs at key arbitral institutions worldwide by navigating the myriad cost structures quickly and accurately. Please find more information on the APC App on our webiste.

Key takeaway 

The right forum is rarely the one with the lowest visible entry cost – it is the one whose full cost, enforcement, and risk profile best matches the business importance of the dispute.

German Disputes Bites series

We hope you are enjoying our series of blogs on Litigation vs Arbitration. This series will cover different aspects of the choice between a litigation or arbitration forum. Previous posts in the series:

German Disputes Bites – Arbitration vs Litigation: confidentiality doesn’t make a dispute invisible

German Disputes Bites – Arbitration vs Litigation: deciding who decides?

German Disputes Bites – Arbitration vs Litigation: tribunal choice is key strategic phase

German Disputes Bites – Arbitration vs Litigation: procedural flexibility advantage if managed

German Disputes Bites – Arbitration vs Litigation: choosing the right forum for enforcement

German Disputes Bites – Arbitration vs Litigation: arbitration gets messy when dispute is not bilateral 

German Disputes Bites – Arbitration vs Litigation: speed depends on lifecycle realities

German Disputes Bites – Arbitration vs Litigation: urgency often sends arbitration users back to court

German Disputes Bites – Arbitration vs Litigation: finality appeals until you need an appeal