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Dispute Resolution Post COVID – Speed in arbitration

  • Market Insight 01 August 2020 01 August 2020
  • UK & Europe

  • Coronavirus

Dispute Resolution Post COVID – Speed in arbitration

The phrase 'justice delayed is justice denied' was frequently referred to in the context of fixing virtual hearings at the start of the COVID outbreak. It was said, with force, that a failure to fix a merits hearing in a reasonable time, was not something that clients who had disputes that needed resolving, should put up with. 

But too often we have been involved in arbitration cases that have run on for many years, without the justification of a pandemic to excuse long delays. So we thought in this article we would address the issue of the speed of the arbitration process, reflect on the consequences of slow process, and consider what steps parties might be able to take to move things along.

How long is a typical arbitration?

There are various statistics which have been published by the different institutions concerning the average length of arbitration proceedings. One has to treat these with a certain amount of caution because each case is different, and the average can often hide very different extremes. But the statistics seem to show an average of between 16 months and 2.5 years, depending on the institution. However, what also needs to be borne in mind is that arbitrations are seldom commenced immediately a dispute arises, and it would be common for a year or more to pass, during which negotiations may take place, before proceedings are commenced. And at the other end, there may of course be applications to amend, annul and/or enforce proceedings, which will add to the duration of the resolution of the dispute.

What is the impact of excessive delay?

Of course the starting point is that for a claimant, any delay in resolution of its dispute may well lead to commercial difficulties, whether in relation to a delay in collecting money properly due, or in having a contract term interpreted or determined, which in today's difficult economic climate, may well lead to follow on consequences that can ill be afforded.

But delay in the proceedings can also damage the process itself. Witnesses may move on and may no longer be available to give evidence. Documents may be lost or corrupted. Physical evidence may no longer be available, particularly in relation to disputes involving construction and/or the physical condition of goods etc, where the problems that have arisen may have to be rectified, in the process destroying evidence which the tribunal might have wished to see for itself.

In this context, delay can damage the ability of the Tribunal to make a fair and proper determination of the underlying dispute.

What are the causes of excessive delay?

There are multiple causes of delay in arbitration, and, without intending to attribute any blame at all, they can perhaps be put into three categories.

First, there is delay caused by parties themselves in failing to meet a timetable set out. The reasons for that may be many, and sometimes they are beyond the control of the parties, but it is right to recognise that in some cases a party, normally the Respondent, has a commercial interest in proceedings being slowed down.

Second, there may be delay that can be attributed to the Tribunal.  By way of example, if you pick 3 very busy arbitrators, you are unlikely to be able to fix a week long hearing very quickly. There are also arbitrators who operate at different paces for other reasons.

Third, different institutions operate at different paces. There are often particular reasons for this, but it is important to understand the differences so that an informed choice can be made about the impact of the choice of institution on the speed of proceedings.

So what can be done about excess delay?

Again, turning to the first issue, party delay, even when one party has an interest in slowing down proceedings, there is much that can be done to keep the process moving. We would suggest that the starting point is to get a timetable all the way to the hearing, including fixing hearing dates, agreed as early as possible.  Some institutions and arbitrators pretty much insist on that, right from the outset, but some do not.  Where the speed of the process may be an issue, we would encourage parties to press for agreement on a full timetable at the earliest possible opportunity.

First, turning to the timetable, in addition to ensuring it covers all likely phases, it is worth putting proper effort into ensuring that the timetable is likely to work and that you will be able to comply with it. There is no point in agreeing a timetable that is too ambitious to follow as once deadlines in the timetable are missed, it doesn't take much for the entire timetable to collapse, at which point a revised timetable may well end up pushing back, considerably, the time for a hearing.

Second, turning to arbitrator delay, or at least delay that may be under the control of the tribunal, there is much that can be done to manage this issue. It is now common for lawyers to interview party appointed arbitrators before they are appointed. At that stage, it is perfectly reasonable, and indeed advisable, to ask if there are any particular timetabling issues that may impact on their appointment.  Moreover, good counsel will have an idea about different arbitrator's attitudes towards timetabling and the speed of the process. For example, there are certain arbitrators who have a reputation for taking a very active role in managing the arbitral process, whereas others have a reputation for being less interventionist.

Third, in terms of institutions, of course a choice of institution is usually made when the contract is drafted. But when you are considering the choice, it is now possible to refer to many institution's websites, which will indicate average length of proceedings, which may be a key factor in the choice you make. You should also consider whether the institution you have chosen has rules which allow for an expedited arbitration, whether in terms of parts of the process, such as the appointment, or indeed the entirety of the process.  Commonly these expedited rules apply to smaller matters, but it would be fair to say that they are not used by parties as often as they might be.

You will also need to have in mind that if you nominate an institution that is heavily involved in the arbitration process, then you may find that additional delay can creep in.  For example, in relation to the ICC process, awards are scrutinised by the ICC Court, and if you are involved in an arbitration involving a state, the scrutiny process can be protracted.

Finally, in relation to delay, you may want to think about how you configure your hearing.  Inevitably, the longer the hearing, the more difficult it will be to arrange. So you should think about whether you really need a full week, or perhaps you don't need to cross examine all the witnesses.  And perhaps, in this brave new world, you might seek agreement to a virtual hearing, which, in our experience, is much easier to arrange that a physical one, as time for travel does not need to be built into availability.

In conclusion, it is the view of these authors that the whole arbitration community needs to seriously address the issue of unnecessary delay in arbitration, and take more active steps to expedite both simpler and more complex matters.  But we hope that, in the meantime, some of the thoughts we have set out here, will help you to take action to minimise delays.

How can we help?

If you would like to discuss any of the points or issues raised in this article please contact us.


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