Should tribunals use “consultant” experts?

During a session at GAR Live Damages, panellists and delegates debated whether an independent consultant appointed by the tribunal could help arbitrators to “umpire” disagreements between the experts.

The idea came up at a question time session at the London conference on 8 February, which was chaired by Shreya Gupta of Oxera Consulting and John Trenor of WilmerHale. The session was designed to cover various topics but became dominated by the idea of the consultant role. 

Panellist Ronnie Barnes, Cornerstone Research’s head of international arbitration, recalled a GAR Live event in Atlanta which had considered the advantages of a tribunal-appointed “umpire” or “referee” to assist the arbitrators in understanding complexities in parties’ expert reports. He noted that one possible incarnation of the role is similar to that played by the video assistance referee, or VAR, in professional football matches – someone to flag issues that the tribunal may have missed, while leaving decision-making power in the hands of the tribunal itself.

Over the course of the session, the panel decided that the role might be deemed that of a “consultant” expert rather than an “umpire”, to clarify that it would play no role in decision-making.

GAR’s publisher David Samuels said that he supported Barnes’s idea. He said that arbitration could learn from the world of antitrust law, where economists’ evidence tends to be pivotal and where the administrative bodies responsible for taking decisions now routinely retain a “chief economist” on their staffs.

Samuels said the job of those chief economists was not to opine on the correct decision but merely to umpire the battle of the experts to ensure they properly engage with each other, a role that only a fellow expert could sometimes play, much as chess grandmasters see more when watching high-level chess than average players. He said it was logical for there to be a similar sort of adviser role in arbitration.

Angeline Welsh KC of Essex Court Chambers raised the issue of transparency of communications between the tribunal and any “consultant” expert, noting that at least in England awards risked being successfully challenged if they are based on conclusions not put to the parties. She said that there are less radical ways to help a tribunal with complex issues, and tribunals have tools to engage more with the parties’ experts throughout the proceedings.

Barnes agreed that more engagement from the tribunal with the experts would always be a good thing, but said it would not solve the problem of tribunals not understanding some of the more complex damages issues and needing to ask for assistance.

Trenor said that another alternative to umpires that some tribunals have employed is to simply ask the parties, if they consent, to use their party-appointed experts to assist them with the final quantum calculations. This can help to ensure that the material is both more accurate and more comprehensible for the tribunal.

Panellist Nathalie Voser of Rothorn Legal said that this exact issue – the use of consultants by the tribunal – had come before the Swiss Federal Supreme Court in a case where the sole arbitrator had been challenged for using the assistance of an architecture consultant to decide a technical dispute (case number 4A_709/2014).

In that case, Voser said the court had found the approach perfectly valid. She said the court found that tribunals should not be precluded from using external assistance, so long as they do not delegate their decision-making powers. She said the court had also found that arbitrators would not need the parties’ mutual consent to use such a consultant. This could be a way to strike a balance between the primary relevance of legal issues and the lack of special knowledge of the arbitrators. 

Schellenberg Wittmer partner Benjamin Gottlieb said that any failure to understand quantum issues properly on the part of the tribunal is really a failure of the parties. He argued that it is not for the tribunal to investigate matters not presented to it – although he distinguished between the common law presumption that arbitrators have a duty to seek out truth and the civil law principle that the responsibility for setting out the damages case lies with the claimant.

Ultimately, he said it was the duty of the parties to convince the tribunal of their arguments, and that if the tribunal didn’t understand the quantum case, the parties had not argued it properly.

Transparency concerns

Welsh returned to the issue of transparency, saying that it was important that parties know what input a “consultant” expert would give to a tribunal. Trenor added that the umpire might be giving the tribunal advice that cannot be tested or questioned by the parties – in contrast to a tribunal-appointed expert, who could be put under cross-examination.

Gupta said that she understood the concern from a legal perspective and that the ability to cross-examine was important. Gottlieb added that lawyers should completely trust their experts, but that damages and technical issues were only parts of a case. He said that experts speaking without counsel input was a risk without them knowing the whole case strategy.

Samuels suggested that the umpire’s input be presented to the parties by the tribunal, to overcome the transparency concerns.

Alexander Yean of Twenty Essex said that the issue was not just transparency, but the potential “abdication of the fact-finding function of the tribunal”. He wondered whether there would be a risk that whatever the consultant said in a technically complex case would be accepted by the tribunal without question.

Voser emphasised that the point of a consultant would not be to decide on any of the issues before the tribunal, and that the tribunal must decide them for itself. She said that so long as the expert was in the relevant field, and used the evidence presented over the course of the proceedings, she didn’t see a need for further transparency.

Welsh said that in a highly technical dispute where the tribunal felt the need for a “consultant” expert, she would still be concerned about the disproportionate influence that such a person could have on a tribunal if he or she preferred the position of one particular expert over the other. Gupta agreed, saying the umpire should help a tribunal to decide matters, but should not be deciding those issues for themselves.  

Speaking afterwards, Samuels said: “This is the first time that the Ronnie Barnes idea of a consultant to assist the tribunal gained as much traction – thanks almost entirely to the contribution from Nathalie Voser, which surprised the whole room. She revealed that the idea everyone seems to struggle against in London is already accepted practice in Switzerland. And has sign-off from the highest court in the land! The Swiss Federal Tribunal.”

“You feel the engagement in the room change from that point on. I think part of the problem is it’s a very new idea and everybody hears it a certain way the first time and perhaps jumps to conclusions about what it is that aren’t being suggested. In my mind, the concept isn’t a whole lot different from expert witness hot-tubbing. Everybody thinks that works – so long as the tribunal prepares. A consultant expert is more of the same. They’d help the tribunal prepare but throughout the case. And then they can do a better job of making sure the experts really engage.”

The event took place at the Butchers’ Hall building in London. At the start of the day’s conference, Samuels had referenced some thoughts from Airbus’ head of disputes Karl Hennessee submitted ahead of a GAR Roundtable entitled, “Has international arbitration lost its way? Is it time for a reset?” The roundtable will be published later in the year.

Hennessee had queried “an over-reliance by parties, tribunals and counsel on quantum expert witnesses – amounting to a near out-sourcing of the comprehension of quantum issues to third parties not accountable in legal or ethical terms to the process”. He said that the secondary effects of this “include a general decline over time in the numeracy of counsel and tribunals”, manifest in an “increasing number of awards that either simply parrot the analysis of one expert or seek to sew together elements of different expert submissions, often with incoherent results”. 

“This state of affairs is unacceptable to users who must explain these outcomes to business leaders who are quite fluent in financial matters and are puzzled, to say the least, that the arbitration practice is so careless with their money and easily bamboozled by experts.” 

Samuels said sentiments such as those on the part of clients indicate the importance of considering issues around expert evidence.

GAR Live Damages was held at 87 Barts Close in London on 8 January. The event was sponsored by gold sponsors Cornerstone Research and Docket Navigator, silver sponsors Accuracy and Oxera Consulting and supporting organisation Lexology.

GAR Academy has launched a course on damages in international arbitration, helping participants understand damages issues more clearly. See here for more information.