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Judicate West Welcomes Judge Clay M. Smith in Southern California - SYS-CON Media (press release)

Google International ADR News - 6 hours 24 min ago

Judicate West Welcomes Judge Clay M. Smith in Southern California
SYS-CON Media (press release)
The firm's successful formula involves top-tier neutrals and an experienced staff who is dedicated to being the gold standard in alternative dispute resolution (ADR). Judicate .... The 20th International Cloud Expo has announced that its Call for ...

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Where Angels Fear to Tread: The Availability of Disclosure in Support of an Application to Remove a Tribunal

Kluwer Arbitration Blog - Sun, 2017-04-23 22:44

Richard Power

Clyde & Co.

The recent decision in P v Q [2017] EWHC 148 (Comm) provided, for the first time, guidance on how a Court will approach an application for disclosure in support of an application to remove Arbitral Tribunal members under s.24 Arbitration Act 1996.

Background

The Claimant had brought an application to remove two wing members (the “Co-Arbitrators”) of an Arbitral Tribunal under s.24(1)(d)(i) Arbitration Act 1996 (“AA 1996”).1)Judgment was handed down on this application on 9 February 2017 and is reported at 2017 EWHC 194 (Comm) jQuery("#footnote_plugin_tooltip_4639_1").tooltip({ tip: "#footnote_plugin_tooltip_text_4639_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); The Claimant had previously applied before a specialised LCIA Division (appointed by the LCIA Court) for dismissal of the entire Tribunal, based on the arbitrators’ alleged failure to appropriately conduct the arbitral proceedings by delegating their roles to the Tribunal Secretary. Further, serious doubts were raised as to the Chairman’s impartiality. This application culminated in the removal of the Chairman but not the Co-Arbitrators, and so the Claimant applied to Court for their removal.

In support of that application, the Claimant applied for disclosure of various documents from the Co-Arbitrators, including “instructions, requests, queries or comments from the Co-Arbitrators (or from [the Chairman] to which the Co-Arbitrators were copied) to the Secretary” and all communications sent or received by the Co-Arbitrators which related to the role of the Secretary and/or the tasks delegated to the Secretary.

The principles governing the disclosure application

The Claimant contended that the governing principles were those in respect of specific disclosure pursuant to CPR 31.12, from which the Court derived its power to make the order sought. Provided the documents were relevant, the Court had discretion to order disclosure, to be exercised in accordance with the overriding objective.

The Defendants argued that given that the material sought was especially sensitive (being akin to documents relating to Judge’s deliberations); the nature of the s.24 proceedings; and the policy considerations reflected in sections 1, 33, and 40 of AA 1996, disclosure should only be granted in “rare and compelling cases” where there was a strong prima facia case on the merits of the s.24 challenge, and disclosure was strictly necessary for the fair disposal of the s.24 application.

Popplewell J acknowledged that there was no existing case law on such an application. He held that the following principles should govern an application for disclosure of a Tribunal’s materials:

Principle 1 – real prospect of success

Popplewell J declined to impose a merits threshold which was higher than the default position on “normal” interlocutory applications. He reasoned that the relevance and nature of the material sought, and the merits of the removal application, could be taken into account in the exercise of the Court’s discretion. The correct test was that which would have to be established if facing a summary dismissal, i.e. namely that the s.24 application has a real prospect of success.

Given the Claimant’s failure to fulfil the necessary criteria laid down under Principles 2 and 3 (see below), Popplewell J did not consider it necessary to express his views on whether this test was satisfied in the current case.

Principle 2 – strict necessary

Popplewell J held that the documents sought in the disclosure application must be “strictly necessary for the fair resolution” of the s.24 application, for the following reasons:

This is the test generally applicable in interlocutory proceedings.
Perhaps more significantly, the arbitral context (and the overriding objective) requires cases be resolved without unnecessary delay or expense and with minimal Court intervention. Popplewell J commented that the s.24 process is an intrusion by the courts into the arbitral process (especially where, as here, the arbitral institution has already considered and ruled on the question) and an order for disclosure would likely delay the resolution of the dispute, enforcement of the award and increase the costs.
Where disclosure is sought in litigation from non-parties, the test is one of necessity. While the Co-Arbitrators were technically parties to the s.24 application, their position was analogous to non-parties.

Popplewell J held that the documents sought were not strictly necessary, pointing out that s.24 and s.68 AA 1996 claims are regularly concluded without disclosure, as are recusal applications to judges.

Principle 3 – factors affecting the exercise of discretion

Popplewell J held that in exercising its discretion, the Court will have regard to the overriding objective and all the circumstances of the case. In particular, given the arbitral context:

disclosure in support of Arbitration Claims will usually be inimical to the principles of efficient and speedy finality and minimal Court intervention which underpin AA 1996;
where an arbitral institution has the power to grant disclosure and has declined to do so, the Court will not normally order disclosure;
the Court will not normally order disclosure of documents which the parties have expressly/implicitly agreed with each other and/or the Tribunal should remain confidential; and
it will only be in the very rarest of cases, if ever, that arbitrators (who are in a position analogous to the judiciary) will be required to give disclosure of documents; it would require the most compelling reasons and exceptional circumstances for such an order to be made.

On the facts, Popplewell J held the case was neither wholly exceptional nor rare. Moreover, the documents sought would amount to disclosure of the confidential deliberations of the Tribunal, which would be impermissible under the principles applying to disclosure of a Judge’s deliberations and under the parties’ agreement on confidentiality in Article 30.2 of the LCIA Rules.

Conclusion

The theme throughout Popplewell J’s judgment is that the Court will respect its role in the context of arbitral proceedings of supporting Tribunals and arbitral institutions, and the principle of party autonomy, with minimal intervention. This is as laudable as it is clear.

Practically speaking, it is apparent that a Claimant is unlikely to obtain disclosure from the Tribunal in support of an s.24 application, meaning that he will face considerable (if not insurmountable) evidential difficulties.

In the circumstances, parties should give serious consideration as to whether to bring a removal application under s.24 AA 1996, given the unavailability of disclosure, the reluctance of Courts to intervene in the arbitral process, and the damage it will do to relations with the Tribunal.

References   [ + ]

1. ↑ Judgment was handed down on this application on 9 February 2017 and is reported at 2017 EWHC 194 (Comm) function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors:

The post Where Angels Fear to Tread: The Availability of Disclosure in Support of an Application to Remove a Tribunal appeared first on Kluwer Arbitration Blog.

Neutrality Of Arbitrators The Road Ahead - Live Law

Google International ADR News - Sun, 2017-04-23 03:59

Neutrality Of Arbitrators The Road Ahead
Live Law
The Amendment Act with the intent to improve credibility of arbitration as an alternative dispute resolution mechanism, has sought to identify and define as to who shall not be construed as neutral or impartial in order to being appointed as an ...

Consumer Redress and “The New Handshake”

Business Conflict Blog - Sun, 2017-04-23 00:48

For many years, a tempest has surrounded public policy approaches to consumer protection, largely implicating three utterly inapt legal constructs:  FRCP 23, the Federal Arbitration Act, and traditional principles of contract formation.  Accustomed to managing customer complaints but unwilling to expose themselves to the coercion of class actions, companies have sought to require consumers to waive rights to collective remedies.  Courts have recognized the validity of contracts containing such waivers if they are embedded in agreements to arbitrate.  And consumer agreements to arbitrate have been enforced despite widespread acknowledgement that consumers have no idea that they are agreeing to anything, what they are agreeing to, or what rights they are waiving.

So intractable has been the legal discourse that Congress, through Dodd-Frank, created an agency to promulgate rules protecting consumers of financial products from “forced arbitration and class action waivers.”  And so vulnerable is our regulatory environment that once Congressional power shifted that promulgating agency (the Consumer Financial Protection Bureau) and its proposed rules are presumed to be dead before ever having come to life.

The whole thing has been a testament to the futility of the law to address a felt need in a way that conforms to our legitimate expectations.

Comes now Prof. Amy J. Schmitz of the University of Missouri and Colin Rule of Modria with an extra-legal, market-driven, empirically-based approach whose values reflect old-time America and yet whose execution relies upon cutting-edge technology.

Prof. Schmitz remembers when she would buy ears of corn from a local farm stand, hand the farmer a buck, and shake his hand.  The dollar signified the market value of the corn.  The handshake signified the farmer’s willingness, in the event that an ear was wormy, to replace it with a good one.

Harry Truman expressed his frustration with economic advisors who equivocated “On the one hand… but on the other hand…” by declaring that what this country needs is a one-armed economist.  Schmitz and Rule suggest that what this country needs is a New Handshake.  Their book of that name makes a compelling argument.

In a calm and informed voice, the authors explain the legitimate expectations of online retailers and their online customers.  Both seek, and almost always realize, accuracy, satisfaction, efficiency and responsiveness.  Retailers devise easy methods of product identification, ordering, payment and order fulfillment.  Moreover, they compete with others in the marketplace to provide those experiences better than their customers’ alternative suppliers.  Consumers want ease of use, quick delivery, conforming goods, and both privacy and safety with respect to the details of their financial transactions.

The question is, if 98-99% of those transactions go as contemplated, what do consumers expect with respect to the 1-2% that do not?  And what are the market justifications for retailers’ trying to meet those customer expectations?

Rule and Schultz argue that the online nature of the transaction presents the opportunity for an online resolution of the disputes arising from this economy, and that management of disputes through the internet, arising from internet-based consumer transactions, presents opportunities for both customer satisfaction and enhanced business.  Setting aside the concerns of third party advocates, regulators and lawyers, the authors propose that what customers really want is a dispute process that is as easy to access as the sale was; is online, like the sale was; is fair, quick, private, confidential, effective and direct.  They do not want coupons, negotiations, arguments, excuses, or offers of discounts for future purchases, and they certainly do not want to have to pick up a telephone and have a recording tell them how important their call is.

Here comes the most compelling part of the study: based on a study of the buying behavior of millions of consumers on the retail site eBay, the authors conclude that consumers who are offered, and who initiate, online dispute processes concerning their purchases actually engage in more purchases – irrespective of the outcome of the dispute process they initiated.  That is to say, the mere availability of a direct, simple online access to remedy boost customer loyalty with respect to that online merchant.  The authors even call this phenomenon “Return on Resolution,” or RoR.

This can backfire if done badly, of course.  If the online consumer redress protocol is perceived as unfair, or complaints get lost, or other adverse experiences lead customers to feel hoodwinked, things will change rapidly for the worse.  But the empirically-based proposition is that the presence on a retail website of an online consumer dispute mechanism results in enhanced customer loyalty. It acts like a farmer’s handshake.

If you accept the validity of this behavior – and we’re talking about consumer behavior, not self-described consumer “satisfaction” – then a whole new world of online dispute resolution (ODR) presents itself, driven and enforced by the market rather than by legal theories or regulatory initiatives.  The authors envision a global, uniform, multi-lingual, cross-cultural system of online consumer redress that possesses certain design criteria:

  • The process is easy to access and to understand
  • The system is highly automated
  • User of the process are treated fairly and their privacy is respected
  • The system identifies “bad guys” – fraudulent sellers and repeated claimants – and uses a “tripwire” system to exclude them from participation or notify appropriate authorities
  • The process is sufficiently sophisticated to detect other efforts at “gaming”
  • The process must yield benefit to the merchants who take part
  • The system must self-improve through iterative lessons-learned

They go on to spell out in some detail how such a global network, www.newhandshake.org, might be built on a single platform.  And they offer hypothetical case studies of how it would work in instances of buyer nonpayment, seller failure of delivery, dissatisfaction with quality of service, or other common B2C disputes.

This is timely, innovative, creative stuff.  And it is a refreshing reminder that the law follows, and seldom incites, human endeavors.  New developments in trade relationships come from the felt needs of the market, and when the market undergoes fundamental reshaping – such as the multi-jurisdictional, multi-legal, cross-cultural, click-able world of contemporary online retailing – we lawyers are fortunate to have people like Amy Schultz and Colin Rule to point us to the leaders, and encourage us to follow.

Principles of Effective Interpersonal Communication skills

Communication and Conflict Blog - Sat, 2017-04-22 08:25
Basic principles of effective interpersonal communication and how to apply them. This page explains The Principles of Effective Communication drawn from the experiences of mediation.

4-word-build, A Conflict Resolution Exercise and Teamwork Exercise

Communication and Conflict Blog - Sat, 2017-04-22 08:22
4-word-build - a conflict resolution exercise for gaining a shared understanding of a concept in a group or team. The exercise enables all present to participate in the creation of the shared view.

Giurisprudenza ed economia a Summer school Unicusano/VIDEO - Dire

Google International ADR News - Fri, 2017-04-21 23:00

Dire

Giurisprudenza ed economia a Summer school Unicusano/VIDEO
Dire
Le tematiche affrontate riguardano i seguenti settori: International Commercial and Corporate Law; International Tax Law; Torts Law; European Union Law, Adr – Alternative Dispute Resolution; Ancient Roman Law; Environmental Law; Bitcoin & Blockchain, ...

Stories Mediators Tell – World Edition

Business Conflict Blog - Fri, 2017-04-21 18:05

Many of the presentations at the ABA Dispute Resolution Section Meeting introduced new books in the field.  A notable example was Prof. Lela Love and her co-editor Glen Parker explaining the ongoing effort to open up mediation to people around the world who have may not have experienced it by compiling of “Stories Mediators Tell” — now supplemented by “The World Edition.

The volume is purposely anecdotal.  The idea is to “popularize” mediation by telling stories.  Prof. Love explained that stories educate and inspire, educate and entertain people.  We are more eager to hear stories than to be taught.  The volume perfectly vindicates her proposition.

The hour-long panel consisted, suitably, of a group of internationally-based mediators who told their stories.

  • Thierry Garby of France told the story of a Parisian theatre that, 100 years after its construction, was remodeled and provoked neighborhood complaints because of noise. Five expert reports, 13 parties and 12 years of litigation yielded no acceptable outcome.  The remedy would cost $8,000,000 but, Garby discovered, the building was worth $250,000.  It settled in two hours.  Once he discovered this anomaly,
  • Maria Camelino of Argentina said that she uses media to resolve conflict. In her country, in 2002, there was dramatic political upheaval and economic crisis.  She initiated a conflict resolution on Argentine TV, offering advice from social workers and others on a particular case. Lawyers could bring cases to the panel and viewers could learn from them.  Subsequent mediation parties would be invited to watch clips from the show, changing their perspectives.
  • Jarwad Sarwana of Pakistan related an instance of a trademark mediation that was interrupted with the afternoon prayer towards Mecca, including the invocation by an imam to pray for peace. The mediation was about to re-commence after afternoon prayers but first one party asked to speak.  He reported having been moved by prayer, and proposed that he and his chief adversary discuss directly an incident that had occurred in Frankfurt years before.  Clarity was thereby achieved by means seemingly unrelated to, but likely possible only through, mediation.
  • Judge Srdan Simac of Croatia told a Christmas story. As chief of the mediation service in his court, he received a request from a party on December 23 to conduct a mediation the next day, so it would be done before Christmas.  He agreed and conducted a Christmas Eve mediation that proved successful.  The grateful parties arranged for the delivery of two boxes of cakes for the court.  The Judge explained that he was obligated to refuse it and asked if it could be re-delivered to the local orphanage.  All agreed.  Later in the afternoon he found one of the attorneys at the end of a corridor, crying.  It transpired that the lawyer had spent World War II in that very orphanage as a child, and was moved by the unexpected turn of fate by which he himself had been an agent of the very kindness he had so yearned for.

Prof. Love noted that there is a tendency for mediators to tell inspiring and successful experiences, not dull, boring, tedious or unsuccessful ones.  That’s okay with me.  Inspiration is in short enough supply in our business that no one is well advised to turn it down when it’s offered.

 

This Is Dedication

ADR Prof Blog - Fri, 2017-04-21 17:46
Kelly Browe Olson and Alyson Carrel, the Spring Conference Standing Committee Co-Chairs of the ABA DR Conference here in San Francisco, are truly dedicated to the success of the event. Here they are at the Thursday reception. Not only do they match, they are wearing the color scheme of the commemorative tote. Bonus photo! Whose … Continue reading This Is Dedication →

'See You In Court' Or 'See You Out Of Court'? A Burdened Judicial System – Can ADR System Be An Answer? (Part I) - Live Law

Google International ADR News - Fri, 2017-04-21 08:37

Live Law

'See You In Court' Or 'See You Out Of Court'? A Burdened Judicial System – Can ADR System Be An Answer? (Part I)
Live Law
In 2013, Transparency International reported that 36 per cent citizens had paid a bribe to the judiciary. Comprehensive surveys have also been carried out to disaggregate the bribe .... It has been suggested that the problem of adjournments can be ...

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Taming the “Mercantile Adventurers”: Third Party Funding and Investment Arbitration – A Report from the 14th Annual ITA-ASIL Conference

Kluwer Arbitration Blog - Thu, 2017-04-20 23:32

James Egerton Vernon

ITA

In his 2014 Assenting Opinion on a security for costs motion in RSM v. Saint-Lucia, arbitrator Dr. Gavin Griffith Q.C. described third-party funders as “mercantile adventurers” and associated their activities with “gambling” and the “gambler’s Nirvana: Heads I win and Tails I do not lose.” This was no voice in the wilderness. The increasingly prevalent role of third-party funding (“3PF”) in international arbitration has raised concerns with many stakeholders that it will fuel a rise in frivolous claims. In particular, the role of 3PF in investment arbitration raises unique concerns for policy-makers because, ultimately, a State’s taxpayers will be liable for satisfaction of any award favoring the claimant. For their part, funders, and the claimants and law firms with which they generally collaborate, decry as unfounded the criticism of Dr. Griffith and those of his ilk, and note that their careful screening of claims acts as an effective filter for any unmeritorious action. Funders, after all, have a nakedly capitalist motivation; what do they stand to gain from supporting claims unlikely to turn them a profit?

These starkly divergent views have led to similarly contrasting opinions as to how, if at all, 3PF in international arbitration should be regulated. Calls for regulation have historically embraced two extreme options. At one end of the spectrum a “do not ask, do not tell” approach – viz. no regulation at all. At the other “a total ban on 3PF.” How, then, should the arbitral community proceed in the face of such a fractious debate?

The answer came in 2014 when the International Council for Commercial Arbitration and London’s Queen Mary School of Law formed a joint taskforce on “Third-Party Funding in International Arbitration” (the “Task Force”) co-chaired by three leading arbitration academics, Profs. Catherine Rogers, William (Rusty) Park and Stavros Brekoulakis. The Task Force’s aim is to “systematically study and make recommendations regarding the procedures, ethics, and related policy issues relating to third-party funding in international arbitration.” A working draft of the Task Force’s findings was presented, for discussion purposes, at the 14th Annual ITA-ASIL Conference on Third-Party funding, held in Washington, D.C. on 12 April 2017 (the “Draft Report”).

Proceedings commenced with a keynote from Professor Park, in which he highlighted four “musketeers” (viz. issues) identified by the Task Force as needing to be addressed:

First transparency, without which the very legitimacy of the arbitral process risks being undermined.

Second privilege. While in the U.K. and the U.S. common interest privilege would likely cover a claimant and funder working together on a case, this may well not be the case in civil law jurisdictions.

Third the issue of costs. To what extent should the existence of 3PF be taken into account in allocating costs in an increasingly “loser pays” legal environment? Should it be a factor when considering whether to grant an order on security for costs?

Fourth and finally (or as Professor Park put it, the “d’Artagnan” issue of the musketeers of 3PF), the question of definitions. Who or what exactly is a third party funder?

Thereafter two prestigious panels consisting of commercial funders and representatives from the worlds of academia and public policy entered into a lively discussion of the issues raised in the Draft Report. Below, with a focus on the role of 3PF in investment arbitration, I detail five key take-aways.

1. 3PF in Investment Arbitration: ‘Relatively Widespread’

While the generally-confidential nature of 3PF and the consequent lack of publicly-available empirical evidence has militated against certainty, it has been the accepted wisdom in recent years that 3PF is becoming increasingly prevalent in investment arbitration. The Eurogas v. Slovak Republic tribunal confirmed as much when it described 3PF, in a 2015 Procedural Order, as “a common practice” in investment arbitration. It was thus particularly instructive to be provided, at the conference, with hard data confirming that:

• In the 2015 Queen Mary and White & Case International Arbitration Survey “39% of the respondent group” “[had] encountered [3PF] in practice.” This “suggest[ed] that its use is relatively widespread.
• 3PF has been used by claimants in at least 19 investor-state arbitrations.
• In the 2013 Queen Mary / PwC Arbitration Survey49% of respondents reported having used discounted hourly rates with … a success fee …”.
• Contingent or conditional fee agreements have been used by claimants (and at least one respondent) in at least 10 investor-state arbitrations.
• Investment tribunals have awarded success fees in both ICSID (Siag v. Egypt – ordering payment of $6.9m in legal fees, of which $3.2m was a success fee) and UNCITRAL (Khan Resources v. Mongolia – awarding claimants $6m to pay their counsel’s contingent legal fees) arbitrations.

2. Issue 1: Uncertainty Remains – What is 3PF in Investment Arbitration?

As Professor Park noted in his opening comments, the definition of 3PF – who or what exactly is a third-party funder? – is key. Ensuring this definition is both accurate and fair is crucial if any proposed regulations are to be effective. As one prominent voice from the funding community recently noted, regulations based on too narrow a definition could result in a situation where “it is proposed that [a funder’s] 5% interest in a matter should be disclosed, but a creditor’s 10% interest need not be.”

While the Task Force members acknowledged that the definition of 3PF is contentious, and that there remained much debate on this even within Task Force’s subcommittee on definitions, the Draft Report adopted the following Working Definition:

The term ‘third-party funder’ refers to any natural or legal person who is not a party to the dispute but who enters into an agreement either with a disputing party, an affiliate of that party, or a law firm representing that party: a) in order to provide material support or to finance part or all of the cost of the proceedings, either individually or as part of a selected range of cases, and b) such support or financing is provided either through a donation or grant or in return for remuneration dependent on the outcome of the dispute.

While scholars and funders have provided their own varying suggestions as to what the definition of 3PF should encompass (and the issue of how after-the-event insurance should be categorized remains especially contentious), states have also been responsive to this issue. The Draft Report notes, for example, that the revised Comprehensive Economic and Trade Agreement, ratified by Canada and the E.U. in October 2017, includes the following definition of 3PF:

Third party funding means any funding provided by a natural or legal person who is not a disputing party but who enters into an agreement with a disputing party in order to finance part or all of the cost of the proceedings either through a donation or grant, or in return for remuneration dependent on the outcome of the dispute.

The treaty further provides for disclosure of “the name and address of the third party funder.” Similar provisions are contained in the (as yet unratified) E.U.-Vietnam Free Trade Agreement, as well as the French and Slovak Model Bilateral Investment Treaties. The E.U. has, further, put forward specific language defining and addressing 3PF to be included in its Transatlantic Trade and Investment Partnership with the U.S.

This, however, remains the extent of state involvement to date. While it is thus possible to discern a relatively uniform E.U. approach to the definition of 3PF in investment arbitration, we remain none-the-wiser as regards the views of other major investor-state stakeholders such as the U.S., China, Africa and Latin America. This is thus an area where the conclusions of the Draft Report will be especially helpful.

3. Issue 2 – Conflicts of Interest

The issue of 3PF and potential conflicts of interest was a key theme throughout the conference, with potential conflicts identified as being those:

Between the arbitrator and the funder, including: where the arbitrator is a member of the investment advisory panel of a funder; where he or she serves as a consultant to the funder; where the same arbitrator is regularly appointed in cases financed by a particular funder; or where the arbitrator has acted as counsel or an expert in other proceedings financed by the same funder.

Between the attorney and the funder, including: the risk of a waiver of privileges (such as the attorney-client privilege) through disclosure to the funder during the due diligence process; “intermeddling” by the funder in the attorney-client relationship (e.g. through the funder attempting to influence the attorney in key strategic decisions); and the funder appointing one or more nominees to the board of the funded company.

Between the claimant and the funder, including: the funder “intermeddling” in the attorney-client relationship (e.g. by influencing the attorney in key strategic decisions); and through appointing directors to the board of the funded company.

Between the claimant and the contingent fee attorney, including: the possibility of discord when it comes to settlement; issues as to what is covered and not covered in the contingency arrangement (e.g. funding may be required for more than just legal fees); and the potential need to revise a contingent fee arrangement should the budget be exceeded and the claimant require additional funding from a funder.

4. Issue 3 – 3PF Can Adversely Affect the Conduct of Investors

A number of pertinent observations were also made regarding the influence the availability of 3PF may have on investors vis-á-vis host states, as follows:

• The object and purpose of a number of bilateral investment treaties is to advance sustainable development, a goal potentially at odds with the involvement of profit-driven funders.
• The availability of 3PF to fund an investment claim could adversely incentivize investors, in particular at a time when relations with the host state are beginning to deteriorate. Will the availability of funding weaken an investor’s resolve and render it more likely to abandon attempts to settle in favor of leaving and claiming damages? Does the availability of lost profits in investment claims perversely incentivize such behavior?
• While the counter-argument to the “adverse incentive” point is that it makes no sense for funders to fund frivolous cases, perhaps we should instead be considering whether the presence of 3PF enables more marginal, as opposed to frivolous, investment claims to be brought, and whether that, in turn, is a good thing.
• Finally, the research of two scholars (Chen & Abrams) into the effects of 3PF on Australian litigation was highlighted. This study confirmed not only that 3PF leads to more claims, but also that funders have tended to support cases raising novel issues. Funders can thereby enjoy an outsized influence over the development of the law in influential areas, which in turn warrants particular caution as concerns 3PF in investment arbitration.

5. Possible Solutions & Conclusion

While the aim of the Draft Report was limited to stimulating a preliminary debate (a goal which was certainly achieved at the conference), some potential solutions to the issues identified above were nevertheless discussed, all of which, interestingly, utilize existing arbitral tools:

• Conflicts of interest involving funders could be resolved through the careful application of the IBA Guidelines on Conflicts of Interest in International Arbitration;
Tribunals can order disclosure of the existence of a third-party funder (as they did in both Muhammet Ҁap v. Turkmenistan and South American Silver v. Bolivia); and
• As noted above, states can and some have included specific provisions pertaining to 3PF in their investment treaties.

In sum, the Draft Report marks but an initial step in a lengthy process, particularly as regards the role of 3PF in investment arbitration. As Prof. Franck noted in her closing remarks, there remains a great deal of work to be done. The Task Force will be revising the Draft Report and posting a version for formal public comment in July 2017, as well as organizing further public events.

The arbitration community will be monitoring these developments with a keen interest.

More from our authors:

The post Taming the “Mercantile Adventurers”: Third Party Funding and Investment Arbitration – A Report from the 14th Annual ITA-ASIL Conference appeared first on Kluwer Arbitration Blog.

Lawyers as Peacemakers and Changemakers

Business Conflict Blog - Thu, 2017-04-20 14:34

Lincoln famously wrote: “As a peacemaker the lawyer has a superior opportunity of being a good man.”  Without challenging this proposition, I have often wondered to what extent lawyers are uniquely positioned to achieve “goodness,” or to do “good” for others.  Don’t teachers also have a “superior opportunity” to do good?  Landscapers?  Artists?  Butchers?

Kim Wright, Eileen Barker and Ann Marie Puente conducted a panel at the 2017 ABA Dispute Resolution Section Meeting investigating “expanding what is possible for lawyers.” The panel sought to show “how we can lead as peacemakers and changemakers in the current social and political environment.”

Kim Wright’s most recent book is “Lawyers as Changemakers.”  She described the “Integrative Law Movement” as part of rapid change in a broad swath of professional society, including shifting corporate governance paradigms and re-emergence of holistic medical practice.  She cited factors such as public disrespect for lawyers, lawyers’ disrespect for each other, and lawyers’ frequently reported personal distress and dissatisfaction, as incentives for professionals to self-reflect and critically assess.  One outcome, she proposes, is a re-adoption of ancient and fundamental values of individual purpose and worth – unfashionable though those terms may be to some.  She cited a trust and estate lawyer who stated that his firm’s mission was “helping clients to express their love for those most important to them.”  She seeks to “reunite law and love,” in recognition that all of law deals, in one way or the other, with relationships.  And the incorporation of these fundamental values into the individual legal practice may render one’s self a “changemaker” – in principle movingly illustrated by a remarkable 4-minute film on the consequence of the re-introduction of wolves to the Yellowstone National Park.

Eileen Barker described the process whereby she left litigation and opened a mediation practice as an intentional choice to conform her professional life with her personal desire to foster relationships and wrestle with the challenges of forgiveness.  She wanted to use her legal training to “help people to heal, and be at peace.”  She found, moreover, that helping people resolve a particular conflict was frequently only the tip of the iceberg, merely the first step of transforming and liberating people away from other-directed blame and towards self-directed nurturing and growth.  She noted Ken Cloke’s observation that, “in every conflict, forgiveness, like revenge, is always possible.” She insists that there is a fundamental human impulse to forgive, an impulse towards empathy, that can either be encouraged or dissuaded by facilitation.  She made it seem obvious: “Most people want peace.”  Pressed on the fact that most people also want moral vindication, she noted that forgiveness can also include acknowledgement of harm, accountability, restitution and other elements of moral suasion.

Ann Marie Puente urged a design analysis to problems that lawyer often address.  Regulation is a sign of design failure, she suggested – pollution is a flaw of systems design, as is injustice.  Thus, design is admittedly intentional, value-laden and outcome-oriented. Were lawyers to follow a design of numerous informal face-to-face interactions, she argues, outcomes would be more attractive to those effected by them.  She termed it a “culture of informality,” allowing porous and humane interactions that would yield progressive and enjoyable outcomes.  This principle is particularly urgent in times that are violent, uncertain and insecure, as she suggests we find ourselves now.  Humanity, not technology, will drive change.

To some degree, the concepts conveyed in this program are applicable to landscapers, butchers, and anyone who serves clients.  Our job is to fix our client’s problems – the dripping faucet, the tasty portion of beef, the elegant outcome of a conflict.  All of us who serve others express our caring for them, and are required therefore to bring our integrity and values – one of which is to refrain from saying “This is what you want” in favor of asking “What do you want?”  Those who are uncomfortable doing so when practicing law may find themselves rightly confused.

At the same time, if the desire to be at peace and the desire to morally vanquish are both intuitive, one can still ask whether the lawyer the professional agent best qualified to respond to both needs.

Israel Reflections 2017–The Truth (?) of Masada

ADR Prof Blog - Thu, 2017-04-20 11:37
From student J.J. Moore, here is a reflection on how the story that is told depends on the storyteller.  I have always loved ruins. Ruins tell a story and bring an appreciation of the past. However, a forgotten aspect of ruins is the stories that surround them. The combination of beauty and history converge at … Continue reading Israel Reflections 2017–The Truth (?) of Masada →

International arbitration for construction and real estate projects in the Middle East - Lexology (registration)

Google International ADR News - Thu, 2017-04-20 10:32

Lexology (registration)

International arbitration for construction and real estate projects in the Middle East
Lexology (registration)
In the past few years we have seen a number of newly established institutions come into play across the region including those now in the United Arab Emirates, Bahrain and Egypt with other alternative dispute resolution establishments in the likes of ...

Arbitral Institutions Are Doing Their Bit; What About The Other Players?

Kluwer Arbitration Blog - Thu, 2017-04-20 10:14

Andrew de Lotbinière McDougall and Fiona Candy

White & Case

White & Case’s recent research should provide some comfort to the arbitral community by showing that arbitral institutions are becoming increasingly flexible and responsive to users’ needs. Flexibility was in fact a characteristic which the 2015 survey conducted by White & Case with Queen Mary University of London established as being one of the most valuable ones in arbitration.

What proved to be positive in itself was the very data gathering process from the various institutions in that it revealed a growing willingness by the institutions to publish and share data, some of which up until now they had either been reticent to disclose or at least considered not relevant to disclose. Statistics regarding female arbitrator appointments, for instance, were only made available, if at all, from 2014. Given the apparent increased drive by institutions to please their users as well as the heightened competition amongst them all, it will be a safe bet to say that many more institutions will be publishing data on female appointments (as well as other issues) in the coming year and years.

The results of the research, put simply, show that (a) more parties are wishing to use expedited proceedings, a tool that is becoming more widely on offer by the institutions; (b) there is an increase in, even preference for in some cases, single member tribunals over three member tribunals, and (c) more female arbitrators are being appointed, at least by the institutions themselves.

These steps and attitudes displayed by the arbitral institutions no doubt have a positive impact on the arbitration process by recognising that parties are wishing to exercise more control in an effort to save time and costs. This however should not be considered in a vacuum; indeed, to gain the optimal benefit from this welcome move by institutions, the other players must co-operate and play their part as well.

Taking female arbitrator appointments, it is all very well that the institutions themselves are making impressive efforts to appoint females, but what about the appointments by parties and co-arbitrators which is lagging behind considerably? There is room for much improvement here. It is noteworthy that the Equal Representation in Arbitration Pledge has been signed by about 2,000 users, including individuals, lawyers, law firms, corporates and arbitral institutions but parties and co-arbitrators are not yet, in practice, appointing nearly as many female arbitrators as the institutions. Why is this so? Is it perhaps due to a mindset along the lines of “in the ideal world, it makes sense for more females to act as arbitrators but in my particular case, especially given it’s my money and my reputation at stake, I prefer to go with the known figures”? Maybe in part. What’s the solution? A start could be law firms providing more opportunities to women internally which could have a snowball effect with good female counsel being appointed as arbitrators. There is also probably room for counsel to better enlighten and educate clients as to the benefits (or at least lack of harm) of appointing female arbitrators. Perhaps a conscious change of mentality is required amongst co-arbitrators as well where they tell themselves that old habits should be broken and that they can really make a difference.

The rise in the use of sole member tribunals is also to be welcome in light of the obvious benefits of speed and cost. This though cannot be looked at in isolation of the circumstances of each case. This is where counsel and parties must carefully analyse the possible risk of losing out on quality, especially in a particularly complex and large case, when a sole member tribunal is appointed.

Similar concerns apply to expedited proceedings. It is applaudable that parties are optimising an ever increasing array of tools on offer by institutions to allow for expedited proceedings but again, this will not be appropriate in all circumstances. There is an argument that something is inevitably lost in the name of efficiency. To illustrate that expedited proceedings are not necessarily appropriate for all cases lies in the fact that the institutions will not necessarily accept all applications. What is appreciated in any event is that the parties have the choice and that after careful consideration with counsel, can opt for this procedure.

Finally, it would be amiss not to make mention of time and cost. The results of the research indicate that there is room for improvement by the institutions. To stop there though would be to ignore the fundamental role of parties, counsel and arbitrators. Much is also in their hands to maximise efficiency and minimise cost such as avoiding unnecessary delay tactics by parties and counsel and stronger case management by arbitrators.

More from our authors:

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Rome Wasn't Built in a Day: Progress Report on the Creation of a UNCITRAL Convention on Enforcement of ... - Lexology (registration)

Google International ADR News - Thu, 2017-04-20 09:20

Lexology (registration)

Rome Wasn't Built in a Day: Progress Report on the Creation of a UNCITRAL Convention on Enforcement of ...
Lexology (registration)
Over the past few decades, alternative dispute resolution (“ADR”) has become the preferred method of conflict management in the commercial world. Contemporary trends in ... Whose Time Has Come?) The door to establish an enforcement mechanism for ...

Aragaki – The Dao of Friendly Skies

ADR Prof Blog - Thu, 2017-04-20 01:19
FOI Hiro Aragaki (Loyola-LA) provides his thoughts on last week’s United Airlines debacle. In the past week the Internet went ablaze with news reports of United Airlines passenger Dr. David Dao’s merciless ejection from a Louisville-bound flight.  Members of the AALS Contracts list serve picked the incident apart from multiple perspectives—breach of contract (by whom?), … Continue reading Aragaki – The Dao of Friendly Skies →

TRUSTe Expands Industry Leading Data Privacy Management Platform With New Enterprise Application Integration ... - SYS-CON Media (press release)

Google International ADR News - Wed, 2017-04-19 07:01

TRUSTe Expands Industry Leading Data Privacy Management Platform With New Enterprise Application Integration ...
SYS-CON Media (press release)
Subsequent releases have included modules for alternative dispute resolution, EU cookie compliance, website tracker monitoring, privacy risk assessments and data inventory management. Today the platform actively ... SYS-CON Events announced today that ...

and more »

Council Election 2017: Blairgowrie & Glens (Ward 3) - The Courier

Google International ADR News - Wed, 2017-04-19 00:03

The Courier

Council Election 2017: Blairgowrie & Glens (Ward 3)
The Courier
He grew up in Scone where he now practices Alternative Dispute Resolution, particularly International Commercial Arbitration and Meditation. He is committed to the fundamental principles for which the party stands, most importantly equal opportunities ...

Interfaith Efforts at Peacemaking

Business Conflict Blog - Tue, 2017-04-18 19:22

There is so much to do, see, hear and learn at the ABA Dispute Resolution Spring Meeting that I frequently find myself at a loss how best to spend my time.  If you find yourself in such a quandary, I urge you to consider, at 1:45 p.m. Friday, in Room Pacifica 1, a gentle and inspirational hour with three women of faith who have responded to a mission of mutual understanding and peace.

The panel, titled “Interfaith Efforts at Peacemaking,” features leaders of Christian and Muslim congregations in the San Francisco area who have devoted themselves to service in the conviction that people of faith have something unique to offer, through simple interfaith dialogue and intercultural cooperation.  Speakers include Faith Ferde Ates of Pacifica Institute, Linda Crawford of Interfaith Center at the Presidio, and Rev. Susan Strouse of First United Lutheran Church.

Persecuted Coptic Christians; banned Muslim travelers, Jews subjected to newly awakened antisemitism — We are all too familiar with religion being used as a tool for division.  I encourage you to consider meeting and speaking with three inspired women who are committed to its use as an agent of healing and peace.

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