Arbitration's Image Problem

Arbitration has an image problem.?

Its critics come at it from all angles... Barristers appearing against and in front of others from the same Chambers. Justice being done behind closed doors. Criticism by the senior judiciary that the development of the common law is being harmed. Wing members who are accused of being along for the ride and taking their cheque, rather than doing any useful work. Institution costs and delay. Huge legal costs by the parties’ lawyers rendering arbitration no longer the more nimble sister of litigation. Poor regulation of bad arbitrators or bad awards. Rules which bend and are malleable, and parties that are as a result accused of getting away with procedural murder. The capability (or lack thereof) of arbitrators appointed by certain institutions. Vast swathes of clients including financial institutions who don’t want to use arbitration. And the clique of ‘arbitration practitioners’ that is difficult for fresh-faced newcomers to break into.?

In this jurisdiction, there is paranoia about advancing arbitration venues like Singapore. There is criticism of the appointment of ex judges who treat arbitration like court. And some big, sometimes overseas, law firms pour water on the split profession in this country, warning clients that it merely leads to an overlapping of costs.?

That image problem needs some repair. I suggest three things that should be done.

The First is a point that is close to home. I gave a talk earlier this year where I said that in broad terms, the professional split of barristers and solicitors in England is that barristers are specialist advocates whilst solicitors run and operate the strategy of the entire case. There was some criticism of that on the basis that the roles overlap, and sometimes they do. But we need a simple message that plays to our respective strengths.

One of the reasons that English law and practice is so successful globally is because of the split profession. There are specialists here like no other jurisdiction. We have become shy of saying so. Rather than shying away from that differentiating factor between England and much (though of course not all) of the rest of the arbitrating world, we need to trumpet it from the rooftops. Specialist advocates are making submissions and cross examining witnesses more than other lawyers could ever do. Solicitors are not distracted by months out of action in preparation for trial, to the detriment of their other clients.?

This is a system that allows clients to choose a big (often but not always, US) law firm, or a solicitor / barrister team, and to compare their relative cost and ability. That choice is one unique amongst major arbitral jurisdictions. Likewise, London offers eminent ex judges as arbitrators if you want that, and commercial specialists if you do not.??And those arbitrators are drawn increasingly from diverse and broad backgrounds. Indeed, that is one of the aims of the new ICC UK Arbitration Database, which is open – very deliberately – to anyone.

The Second piece of repair is a global one. Legal skills, including advocacy, transcend borders. Annual comparative studies of national arbitral venues, which drop into our inboxes, encourage a nationalistic view of arbitration. The truth is we are all international arbitration lawyers, able now more than ever to provide legal services worldwide, whether that is in Singapore, Dubai, Geneva, Paris or Mumbai.?

Arbitration lawyers are united by the same procedures, which enables them to collaborate and work across borders in a seamless manner. That’s why arbitration conferences are so successful and can be held anywhere in the world: the language of arbitration is the same wherever you are. Litigation lawyers just can’t talk to each other in the same way.

We should move away from a venue vs. venue approach, and stress the things we have in common globally, not what makes us different. That will strengthen the arbitration process and its legitimacy, and avoid the sideways criticism that comes from jurisdictions jostling for position.

Instead, jurisdictions need to share what works. In England & Wales, the availability of powerful injunctions including freezing orders, anti-suit injunctions and effective enforcement mechanisms are well liked by clients because they provide strong support for arbitration clauses and the arbitral process. Some of those measures are viewed with scepticism, particularly in civil law jurisdictions, and it is our obligation to explain globally what they are and why they work.?

The Third element is structural. Increasing transparency of the arbitral process is both inevitable and desirable. Confidentiality is still the predominant reason that clients pick arbitration, but in many cases it’s a mirage. Much of the criticisms / ills that I referred to at the outset could be dealt with by cracking the door to the tribunal room open a little. It would address concerns over appointments and diversity of tribunal members, cost and effectiveness of the process. Because shining a torch in perceived dark corners does that.?

This won’t make arbitration like court. Instead, it will remind us that arbitration’s strength – and the real reason for its success – is the resolution of?international?disputes. As the late, great Johnny Veeder QC said, in those cases arbitration is “the only game in town”.?

The ICC has made brave steps towards increasing transparency of the process, including checking the experience and availability of arbitrators, enhanced disclosures by arbitrators, allowing parties to request the ICC Court provide reasons for its decisions and, most recently, the actual publication of awards. The arbitral community should demand more and increasing transparency over the coming years.?

It is these things which will repair arbitration’s image problem.

Iain Quirk QC, Essex Court Chambers, September 2021.

This article is based on a talk given as Guest Speaker on 14 September 2021 at a webinar entitled “Arbitrating under the ICC Rules”.

Iain practices in the troika of commercial law, international arbitration and entertainment. His work ranges from multi-party fraud in the Commercial Court, through commercial and investment treaty arbitration in London, Dubai or Singapore, to football and Formula 1 sponsorship disputes. He is rated as a leading silk by Chambers & Partners / Legal 500 in International Arbitration, Energy, IT and Telecoms, EU and Competition, Employment Law, and Media & Entertainment.

See Iain’s latest cases?here.