"Too many faces in the trough": why the roundtable was needed

In an interview, J William Rowley KC tells GAR why he came up with the idea of the GAR-LCIA Roundtable: "Has international arbitration lost its way".

"In recent years, I have been struck by changes in the way people have been doing things and presenting their cases in international arbitration, making proceedings very different from the way they were 30 years ago," Rowley, a Canadian arbitrator based in London and former chair of the LCIA, told GAR. "And, I haven't been alone in being troubled by it."

The reason for the changes, he said, was the same reason that GAR was so instantly successful when it first launched in 2007. "At around that time, international arbitration came of age. Suddenly, the number of cases exploded and every global law firm was setting up a dedicated practice group separate from their wider disputes group. There was no self-respecting city around the world that wasn't touting its credentials as an international arbitration centre and seeking to attract work."

With this huge increase, he explained, came a growth in the number of players in the field, as highlighted by Emmanuel Gaillard in his famous Freshfields Lecture on "the Sociology of International Arbitration" in 2014. What used to be the exclusive domain of a handful of Swiss professors, Gaillard said, had become a huge industry supporting a host of full-time arbitrators, counsel and experts. 

New players were also entering the field, including third-party funders and specialists in enforcement and set-aside (since disputes no longer settled as much as they had done in the past but went to full hearings, with the awards subsequently attacked and challenged in the courts). 

Over time, the roles of some of  these players became more significant. Experts no longer just produced the odd written advice on a narrow technical point but testified for weeks about a host of issues. 

On the periphery of the scene, were publishers of directories that ranked arbitration practices and arbitration reporters. 

As a result of so many people seeking to derive income and support themselves and their families from arbitration, the costs of the process have soared and new problems have emerged, Rowley said. Participants in the process are now routinely confronted with over-long and repetitive pleadings and witness statements; expert reports of epic length but which often pass each other in the night; extensive and chaotic evidence production requests; and lengthy awards dealings with dozens of issues that could have been narrowed down earlier. 

"There are simply too many faces in the trough, too many people wanting and getting more money," he said. "And, while users are quick to complain about the length and cost of the process, their determination to win at all costs means they do not dare to let counsel pass over any argument that the tribunal might find persuasive. So, we are left with a self-feeding frenzy of time and costs."

"As a result of this, international arbitration, once the poster-boy of international dispute settlement, is now at risk", Rowley opined. "People are starting to choose international courts instead, like the SICC in Singapore. As Jan Paulsson suggested in a key note speech at the recent London International Disputes Week, it seems like the start of a backlash. Well, and I hope it's not a case of fools seldom differing, that is exactly what we – Jackie van Haersolte-van Hof, David Samuels and I – were thinking when we came up with the idea of this roundtable."

Rowley said he had been "mulling" over the idea for some time and raised it with van Haersolte-van Hof and Samuels last summer. "We wanted it to be a joint GAR and LCIA event to look at the problems and discuss best practices to combat them".

"I spoke personally to each of those invited to speak  and everyone wanted to come. One practitioner even rescheduled surgery to be there. In the end, we had filled 28 places with a full spectrum of players from different parts of the world, though unfortunately we were unable to accommodate any experts. We had full-time arbitrators and counsel from the common law and civil law worlds, as well as arbitration users. There was not a person that didn't agree there are problems that need addressing."

He added that he had based the format of the roundtable on the Iberian Lawyer's erstwhile Masterclass at the annual IBA conference, which had always provided "a good format to get people engaging and promote debate". 

Rowley said he was thrilled with the way the debate had gone and the number of helpful changes that had been proposed. "Now who's going to lead the charge in implementing these changes and saving international arbitration from losing its spot as the number one choice for cross-border dispute resolution?"

Asked by GAR what happens next, Rowley said he wants to get the recommendations arising from the roundtable, which have been drawn up by Lindsay Gastrell of Arbitration Chambers and are to be known as the GAR-LCIA Roundtable Recommendations, into wide circulation and then into widespread use. "Arbitrators will want to discuss a lot of them with parties at the initial CMC," he said. (The GAR-LCIA Roundtable Recommendations will be published along with a full transcript of the roundtable this September.)

A main point Rowley took from the roundtable, he said, is how little any players in the process want lengthy and repetitive pleadings. "The best pleading is with a cramped pen. In most cases, 30 or 40 pages could suffice for each party's first pleading, with a table of contents and a summary at the end. Then, the second pleading should not be twice the length, as it often is today, but no more than 20 per cent of it." 

He said the roundtable had also highlighted the difficulty of making changes because of "vested interests". 

Due process paranoia and threatening behaviour by counsel are further problems, Rowley said. "A lot of arbitrators are just too scared to implement robust procedural requirements because counsel have complained that they are not being given a full opportunity to present their case, which always raises the temperature in the arbitration room."

In fact, Rowley said, the actual risk of a court setting aside an award because of misconduct by the arbitrator in their procedural handling of the case is extremely low. 

In a preface to a soon-to-be-published report on the roundtable containing the recommendations, van Haersolte-van Hof wrote that it was "a privilege" for the LCIA to support Rowley's initiative. 

She said the roundtable "provided a unique opportunity to ask ourselves whether arbitration, as it is presently being conducted, "is broke...and needs fixing", with participants discussing whether "some of the practices which have become mainstream... are optimal and genuinely result in the type of dispute resolution users want".

Van Haersolte-van Hof noted that the diversity of participants was key to getting a holistic view of the best and suboptimal practices.

"Too often views are attributed to 'users' without acknowledging and accounting for the different roles and distinct interest  of those involved, " she explained. "While the roundtable may not have resolved all differences and distinctions, the inclusive make-up of the group contributed to a more fulsome discussion than is often seen at conferences and events."

She added that GAR's involvement was key. "As the premier platform for arbitration news, GAR is, and has been for many years, in a strong position to bring together key players in the field."

At its own events, she said the LCIA routinely applies Chatham House rules to facilitate honest discussion of potentially controversial topics by a large number of players. She said the roundtable brought together thought leaders for  "more in-depth discussion in a smaller setting", with GAR being "uniquely placed" to "promulgate discussion outcomes and... recommendations."

Van Haersolte-van Hof also voiced her hope that "the considerations and recommendations.... will be of use to users of all kinds and further the ongoing discussion to ensure that arbitration meets the needs of users worldwide."

GAR's publisher David Samuels offered his own takeaways. A "silly summary beforehand" he said, "would have been: 'Isn't it funny how international arbitration is still going wrong in all the ways that benefit the lawyers involved the most, financially?'"  

"But having sat through the excellent – and honest discussion – it's clear the reality is sadder, and more tragic. The road to hell really is paved with good intentions. Everyone around the table wants to do better – wants international arbitration to be better. And yet it continues to underwhelm. So then the question becomes – how do you get out of that? And I think at long last possibly, we started to get somewhere."

"It's clear we have to do something," he added. "I say 'we' because GAR has a dog in this fight: international arbitration's success is our success. And at the moment arbitration simply isn't living up to its potential."

"It's like the proverbial Alfa Romeo – or the British weather. Absolutely the best experience going in its category, when operating properly – which is almost never."

"If international arbitration didn't have its de facto monopoly as the only truly neutral territory for cross-border disputes, I don't think anyone would use it. And that's not a very reassuring thought. Especially as it is now, finally, facing real competition – from open jurisdiction courts."

"Fingers crossed this year marks the start of bringing real imagination to bear. The thing I'm personally thinking on is, how does one encourage certain arbitrators to engage  more at the beginning of a case. And if they can't, because they're too busy, how do we make them less busy, or, else, accept that that's simply the reality, those are the economics and won't ever be different, and engineer around it? Because as Chris Bogart I think said – when you get clear guidance from the tribunal early on, good advocates will play to that, and then everything sort of clicks into place." 

(Samuels said anyone who wants a sense of quite how busy the top arbitrators really are should look at the GAR arbitrator research tool. Put a name in the search bar, then click on the "worked-with" on the arbitrator's page and see exactly how many counsel they have been before over the past two years.  (This data is compiled uniquely by GAR).

You can read our report on the roundtable here. A full transcript plus the GAR-LCIA Roundtable Recommendations will be out in September.