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DAS Convention 2016: 'Ethics and Conflicts of Interest in ADR'

Friday 09 December 2016

The Chartered Institute of Arbitrators held its fourth annual Dispute Appointment Service (DAS) Convention on Friday 2 December, 2016. Hosted by Reynolds Porter Chamberlain and graced by panels of distinguished ADR experts, the day’s discussions centred around ‘Ethics and Conflicts of Interest in ADR’.

The keynote address this year was given by Lord Peter Goldsmith QC, London Co-Managing Partner and Chair of European and Asian Litigation at Debevoise & Plimpton.  He provided key insight into the creation of new services such as Tribunal Secretaries and the impact this has had on perceived suspicion of arbitration as a method of dispute resolution. He emphasised that whilst arbitration is still very much useful and continues to grow we must question whether the arbitration community has given the general public full confidence of its neutrality. Lord Goldsmith stated that in the last 30 years there has been a growing discussion about the need for a code of ethics in arbitration. The question is, who should enforce these standards?

The first panel of the convention was tasked with the role of discussing the issue of ethics and conflicts from an institutional perspective. Chaired by Mark Jackson-Stops ACIArb (Founder, In Place of Strife), the lively and engaging discussion began with Jacomijn Van Haersolte-van Hof (Director General, LCIA) who echoed the need to regulate ethical conduct. She stated that whilst a universal code of conduct for all stakeholders could be quite challenging, diversity is a good starting point and there must be sanctions for breach of ethical guidelines.

Another prestigious member of the first panel, Alexander G. Fessas (Managing Counsel, ICC), asked the question, “Is there a need for institutional regulation?” Suggestions put forth in his presentation included utilising soft law set out by institutions such as CIArb, utilising IBA guidelines, and more involvement from bodies such as the Bar Association as well as arbitral tribunals and parties themselves.

Product Group Director for Alternative Dispute Resolution, RICS, Dr John Fletcher added that there has been recent focus drawn on the relationship between representative firms and adjudicators, thus the need for more robust accreditation systems. He highlighted the fact that this will no doubt be quite a difficult task since accreditation varies from country to country.

As concerns mediation, Chair, Mark Jackson-Stops stated that it is widely unregulated in the UK which aids flexibility and creativity. He affirmed that whilst mediators provide no determination of disputes it is the service provider’s role to maintain high standards of conduct.

The second panel of the DAS Convention explored the topic of ‘Examining the Status Quo: Standards, Guidelines and Rules for Dispute Resolvers’. This panel was chaired by Shawn Conway FCIArb (Partner, Conway & Partners) and was joined by Leonardo D’Urso (CEO, ADR Center), Karen Gough C.Arb (39 Essex Chambers) and Robert Bourns (President, The Law Society).

In Karen Gough’s presentation titled ‘Adjudication: Common Sense or Creeping Bureaucracy?’, she touched on the issues of impartiality and what the various statutes have to say on the issue. She highlighted in particular section 108 of the Housing Grants Construction and Regeneration Act 1996 and the duty of impartiality imposed on Adjudicators. CIArb’s code of Professional and Ethical Guidance as well as RICS’ 2012 Global Professional Guidance were also cited as sources of an imposed duty for Adjudicators to act with integrity and fairness.

Robert Bourns followed the discussion and reiterated that whilst London faces keen competition from seats of arbitration like New York, Paris, Singapore and Geneva, the future of arbitration is still bright as it continues to grow as an alternative to the court system.

Leonardo D’Urso gave great insight into the barriers to mediation in Italy such as: low court fees, complicated mediation agreement signing process and minimal exposure to mediation. He indicated that the conflicts that may arise in mediation could stem from the fact that the law allows mediators to ask for a success fee on top of mediation fees. This may serve as an incentive for a mediator to push for a resolution which may not be in every party’s interest. However, he clarified that the Italian mediation model requires parties to have an informative mediation meeting before going to court; and that consequently, 50% then agree to mediate.

In closing, Chair Shawn Conway stated that CIArb’s Practice and Standards Committee continues to make strides in the area of ethics and conflicts. Dispute resolvers must now make a declaration of independence upon nomination for appointment and must disclose any reasons for lack of impartiality.

The third panel consisted of Peter Ashford FCIArb (Partner, Fox Williams), Nicholas Gould FCIArb (Partner Fenwick Elliott), Mercedes Tarrazon FCIArb (Partner, Dispute Management, SL) and Cyrus Benson (Partner, Gibson Dunn).

Nicholas Gould kicked off the discussions around ‘Party Representatives’. He stated that the courts are always eager for people to utilise adjudication unless natural justice will not be adhered to if it is used. He cited recent case law which highlights the impact of referring to the same adjudicator repeatedly in dispute proceedings and how an apparent bias may be perceived. He called for the need for open and transparent appointment processes and urged party representatives to think hard before approaching the same candidates for appointments.

In addition to this and from a mediation perspective, Mercedes Tarrazon added that there is a need for an explicit set of rules to be implemented and gave the example of the GEA Code of Good Practice for Mediation of which Article 18 asks that mediators act at all times in good faith. Her final thoughts were at a minimum, soft law should be implemented to guide the way.

Cyrus Benson in his opening statements reiterated the fact that ‘ethical’ means different things in different places. In a survey conducted in 2008 it was found, he stated that at any given time arbitrators were bound by several different codes and guidelines such as guidelines set out by arbitral institutions and legal professional bodies.  He indicated that as a result it is not always clear what guidelines apply especially in circumstances where there are several international parties involved in the same arbitration proceedings.

Peter Ashford echoed the need for sanctions for misconduct in arbitration and cited the main sources of such sanctions as the IBA guidelines on Party Representatives in International Arbitration and the 2014 LCIA Rules. These sanctions include admonishing, reprimanding and cautioning arbitrators. In closing he asked the question, “does the Arbitral Tribunal have the authority to rule on party misconduct?”

‘Experts and Witnesses’ was the topic for the fourth panel, which was chaired by Alan Redfern C.Arb (One Essex Court). He stated that “there are various codes of conduct governing the presentation of evidence. The problem is that they are usually codes of conduct to govern a particular profession. Even the English lawyers are subject to different codes, one for barristers and one for solicitors. And what about international codes? The IBA has a set off rules and a set of guidelines, which are useful but in no sense obligatory.”

Charles Brown, former CIArb President added that a dispute resolver’s traditional duty to disclose any relationship with a party in dispute resolution proceedings is being extended to include relationships with the legal or any other representatives of the claiming/referring party. The duty is to disclose, however what the concerned party does with such a disclosure is another question and an arbitrator/adjudicator may decide to resign or continue on with the case. In conclusion, Mr Brown reiterated that “the problem is not the relationship but the disclosure or lack of disclosure.” “If in doubt,” he added, “the party asking the questions must decide what to do next.”

Kay Linnell C.Arb (KCLA) lent her valuable opinion to the discussions by drawing attention to the fees paid to experts. She asserted that the best experts “are accepting full-rate fee work in high profile cases, or perhaps have turned their backs on the expert witness world following the loss of immunity for opinions given in expert evidence and the potential personal liability following a true change of opinion.” In closing she declared, “life as an expert is a minefield”. This sentiment was shared by Phillippa Rowe (Phillippa Ross & Co) who added her voice to the panel.

The fifth and final panel of the day, ‘Parties and their Funders’, comprised Jonathan Wood MCIArb (Partner, Reynolds Porter Chamberlain), Craig Arnott (Managing Director, Burford Capital) and Professor Stavros Brekoulakis (The School of Law at Queen Mary University).

As the discussion focused on assumptions of third party funding, Craig Arnott shared the opinion that the market is changing rapidly and that concerns with IBA’s highly regulated approach could lead to over ‘lawyering’.

Professor Stavros Brekoulakis added that the potential issues raised by 2014 IBA guidelines is the widened duty of disclosure. He asked if this duty is now too wide? He added that tribunals must be cautious not to allow parties to attempt to delay proceedings and exhaust the budget for funding.

The 2016 DAS Convention received positive feedback from attendees and also served as a hub for those seeking to further the cause of better ethics in ADR.

For more information, contact Helen Ampofo at das@ciarb.org

Lord Goldsmith- Keynote Speech 2 December 2016 Lord Goldsmith- Keynote Speech 2 December 2016

Presentations

Stavros Brekoulakis Stavros Brekoulakis 
Peter Ashford Peter Ashford 
Nicholas Gould Nicholas Gould 
Mercedes Tarrazón Mercedes Tarrazón 
Alexander Fessas Alexander Fessas 
Craig Arnott Craig Arnott 
Mark Jackson Mark Jackson 
Karen Gough Karen Gough 
Jacomijn van Haersolte-van Hof Jacomijn van Haersolte-van Hof
Cyrus Benson Cyrus Benson 
John Fletcher John Fletcher