INTERNATIONAL ARBITRATION 1/3LY
IN CONVERSATION WITH ALEC EMMERSON 29
COSTING CONCERNS: TOO MANY LAWYERS SOMETIMES FOCUSING ON THE WRONG ISSUES
SUSIE What’s your most recent frustration in any given case in relation to costs? ALEC I’m a co-arbitrator in an ADCCAC case where the request for arbitration was first made in June 2013 and I was only appointed in February 2014, after nomination in October 2013. However, despite me and the other co-arbitrator agreeing the chair very quickly, we still haven’t received the file and have had to work with the parties and chase up the institution to get things moving. We have actually moved the case forward without getting the file from the institution, though we expect that necessary procedural step will occur very soon! SUSIE So there’s not much transparency from the centre? ALEC Yes that’s right. It’s also true of certain other institutions. Tribunals often don’t really know what’s going on in terms of the deposits until some sort of application is made. Ideally, there should be full transparency, with all communications copied to everyone, so that the tribunal knows what’s happening in terms of the deposits, what disagreements there are and why there’s been a delay. Unfortunately, that’s not always the case and in many cases fiddling around getting the money does cause delay. Courts are a public service so comparatively their fees are not huge, although they are going up. For example, in England and Wales a 3% cap on court fees has been introduced for Commercial Court cases. Essentially the UK Government’s questioning why it should run a nearly free service for high value commercial cases. Looking ahead, litigating commercial disputes is likely to become hugely expensive compared with arbitration. However, it’s also possible that as public courts increase their fees, arbitral institutions will follow suit.
SUSIE As a Tribunal, how do you deal with that – do you have any tips? And do you try to point parties in the right direction? ALEC You can try but it’s much more difficult than you’d think because you can’t absolutely stop a party: parties have the right to be heard and must have a fair hearing – that applies to the whole process, not just the hearing itself. That said, you can make suggestions. For instance, if you’re looking at a complex set of issues which appear to be a bit all over the place, you can go back to parties and suggest they focus on issues ‘x, y, z’ and question whether they have considered whether issues ‘f, g, h’ actually need to be included in their pleadings. Posing open-ended questions sometimes has an effect but it doesn’t generally tend to solve the problem. Parties don’t ignore it per se but they’re often reluctant to depart from the arguments they first advanced. A related point is that cases evolve and develop with the personnel running them. At the beginning, a case is often resourced by a couple of associates supervised by a partner but as the arbitration progresses, the team gets bigger – particularly around disclosure, when paralegals become involved. As the hearing approaches, the advocate appears on the scene (whether it’s an English barrister, a US trial lawyer or an advocate from the law firm itself) often a bit too late in the game, which can result in a lack of ownership. The advocate who has been introduced to the case late may well say “of course I didn’t draft these pleadings” and produce an opening that does not correspond with the way the case has been put on paper. It’s very interesting that litigation and arbitration funders usually want to know who the whole team is at the beginning of any case, including who the advocate will be. I completely agree with this and think the advocate, subject to timetables, should be involved from the beginning.
SUSIE Sticking to the theme of costs, and in terms of how arbitrations could be better managed by party counsel, we recently discussed an arbitration where you encountered certain costs concerns. Tell me more about that. ALEC Actually, it wasn’t just one case. I think many arbitrations are “over-lawyered” and / or “over-experted” and there are multiple layers of costs that could be reduced if the individuals involved were able and willing to focus on the key issues at hand. SUSIE Is this due to a lack of experience by lawyers or is it tactical? ALEC I think it varies. You probably experience this as party counsel yourself. There’s real diversity of skill and expertise of counsel, and even between experts. There are also individuals who spend a lot of time and money going down a blind alley. It’s easy to advocate focusing on the key issues but it’s tricky to implement with a client or legal team that needs to demonstrate to management that no stone has been left unturned. I’ve certainly been involved in cases where the tribunal has to deal with lots of side issues, lacking in real relevance to the claim or the defence. But those non-core issues still generate a lot of irrelevant and non-core disclosure, so the volume of data and paper increases significantly.
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