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06 August 2020
The global disruption caused by the COVID-19 pandemic has affected all areas of life and all sectors of industry, including legal practice and dispute resolution. In the immediate wake of the wide disruptions and restrictions imposed in response to the pandemic, the difficulties faced by parties, counsel, arbitrators and arbitral institutions (not to mention the many other essential participants, such as fact witnesses, experts, translators and transcribers) in resolving disputes efficiently and effectively seemed overwhelming. Dispute resolution – whether mediation, arbitration, litigation or other – has historically relied on bringing all participants together in one room to hash out a resolution. But that is no longer practical, permitted or wise in many instances. Thus, preconceived notions of how disputes can or should be resolved have had to adapt swiftly.
Benjamin Franklin famously said "out of adversity comes great opportunity", and that is certainly the case for international arbitration and other alternative dispute resolution mechanisms. Parties, counsel, arbitral institutions and adjudicators of all types have proactively taken steps to ensure continued access to fair, impartial and efficient justice. This has been helped by the inherently consensual and flexible nature of international arbitration. But the rapid pace of change in the arbitration community should not be underestimated – for many years, critics of international arbitration have noted that it has too often replicated traditional court proceedings rather than embraced innovations that might drive efficiencies. The pandemic has been the impetus for change – and there has been wide-scale, rapid adoption of online and virtual dispute resolution technologies and processes in various forms.
Not all of these innovations are new – arbitration documents have been filed and served electronically for decades and pre-trial issues and motions are regularly dealt with by phone or video hearing. The economics of doing so works – avoiding the costs of travel and protracted written exchanges. Moreover, there are often practical benefits of getting parties together virtually to agree early procedural issues rather than doing so in writing – one key benefit being that parties and counsel get to familiarise themselves with the tribunal and how it operates, as well as their opposing parties and counsel, which ultimately makes for a more efficient and substantively better final hearing. It also provides impetus for all participants to be better prepared in advance of the final hearing, which can aid in narrowing issues and provide opportunities for settlement sooner in the process.
However, there is now greater collective attention on if and how best to deal with online and virtual dispute resolution processes. As a result, a significant amount of advice and guidance notes has been produced to support those coming fresh to these technologies. Further, many training courses and seminars on conducting virtual dispute resolution are being made available by law firms, barristers and arbitral institutions and centres. A large body of excellent resources is now available, and the community is actively discussing some of the trickier issues.
Online dispute resolution will not be appropriate in all circumstances or for all parties or disputes. When embracing new technologies and processes, the parties, counsel and arbitrators must also be alive to the difficulties that can arise when replacing physical proceedings with virtual ones. Consideration must be given to practical issues, such as participants being based in different time zones or speaking different languages and differences in availability of technology, including functional internet speed and bandwidth. Advance consideration of and preparation for the potential issues is key. Arbitrators must be willing and able to offer confident and strong procedural case management. They must also be conscious of the need to address potential asymmetry between the parties – for example, experienced arbitration counsel from large firms will likely have conducted some form of virtual proceedings and may feel on firmer ground with the process and the issues than, for example, some in-house or governmental agency lawyers.
Participants must also be willing to accept that there will be circumstances in which it will be inappropriate for the final hearing to be conducted virtually, including some 'bet the bank' cases, cases involving extensive complex or technical evidence or significant amounts of documentary or physical evidence or cases requiring lengthy final hearings. This must be assessed on a case-by-case basis and merely falling into one of the prior categories should not automatically disqualify the case from being determined virtually. The question must be considered holistically, including by looking at whether some justice being done would be more acceptable than a lengthy delay that might result in no justice being done at all. When deciding whether (and at which stages) to proceed virtually and how the process should play out, arbitrators must remain on firm ground, bringing the parties and counsel along in the decision-making process and documenting it as appropriate.
Concerns have been expressed as to whether the use of virtual hearings and other novel technologies and processes might lead to a spate of challenges to awards on due process grounds. While possible, this may be a little overhyped – as an example, approximately 40 courts are taking up virtual hearings and other online dispute resolution. That is not to dismiss questions of enforcement risk – these must be considered and dealt with where possible as part of the case management process. Parties, counsel and arbitrators will need to take into account regional variations of approach to due process and other relevant matters, considering, at a minimum, the seat and likely places of enforcement. However, challenges and risks to enforcement have always existed in one form or another, and sophisticated arbitrators are accustomed to dealing with such issues.
The resilience and innovation shown by the international arbitration community in recent months should be applauded. In the face of significant adversity, new and improved ways to resolve disputes and maintain access to efficient and effective justice have emerged. Notwithstanding the terrible circumstances that provided the impetus, recent months have disrupted the status quo and challenged normative beliefs around how disputes can and should be resolved. For many years, there have been discussions about how to drive greater time and cost efficiencies in the arbitration process. Some of the solutions being used now have those benefits but, more importantly, their rapid introduction has shown how adaptable and open to change parties, counsel, arbitrators and institutions are. Innovation and flexibility in resolving disputes in a commercial and efficient manner are the cornerstones of international arbitration. It is hoped that continued acceptance of technological and procedural innovations will be the new normal, and that this path of progress will continue even after COVID-19 restrictions are lifted.
For further information on this topic please contact C Mark Baker at Norton Rose Fulbright by telephone (+1 713 651 5151) or email (email@example.com). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com.
Cara Dowling, of counsel, knowledge, contributed to the preparation of this article.
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