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Archive for October, 2012

CENTRE FOR INTERNATIONAL LAW STUDIES

Salzburg Arbitration Programme, June 15 – 18, 2000

Conference on International Commercial and Construction Arbitration

Session 12: Use of Experts in Arbitration

There is a risk attached to the use of experts in the service of the Tribunal. The expert, the person experienced in the business or techniques of the dispute, can start a cold breeze of logic and common sense blowing through the dusty rooms of the law. 

Involve an expert and you involve someone to whom the truth and the facts are more important than the tactics and games. More seriously, you involve someone to whom justice and fairness are more important than the esoteric details of positive law. Someone whose frustration, at the obfuscation found in much modern legal practice, sometimes may result in steps towards the truth being taken much more quickly than billing practice normally would permit.

My lawyer friends should be warned that, by bringing an expert into the service of the tribunal, whether as a member of a tribunal, as a sole arbitrator or as the tribunal’s own expert, they have a tiger by the tail.

Let me recapitulate briefly: I suggest the characteristics of an expert, and for this purpose I mean an expert in fields other than law, to include

  • knowledge and experience of his or her field – an expert knows what he or she is talking about;
  • the skills of logic and common-sense;
  • an ordinary man’s, or woman’s, sense of justice and fairness;
  • skills of communication and exposition, at least related to the field of expertise and often more broadly related – an expert knows how to express his or her findings or opinions.
  •  

Disputing parties, seeking a way to resolve or determine their dispute, may well look at those characteristics and think that they are precisely what is required. That is right and that is, of course, the original purpose, the raison d’être of commercial arbitration, although a modern observer could be excused for thinking otherwise.

That was how arbitration began in commerce, before the modern structure of nation states became what it is today. Merchants would choose one of their peers, preferably one whose prestige and reputation put him out of the hurly burly of immediate competition, and agree to accept his decision. He was the arbitrator – knowledge and experience, logic and common-sense, sense of justice and fairness, ability to communicate his findings. It was all that was necessary. Now is not the time to discuss how the need for control by the State has led to a corruption of the process. I have discussed that elsewhere, and the move towards a globalization of trade eventually may mean a return to the standards of the past, as trade once again passes beyond the grasp of nation-states.

My immediate point is that, far from being an exception to the arbitral process, the use of an expert is the natural, the obvious way to determine a private dispute in a specialist area of trade or professional practice.

That is my starting point. Of course there are trade disputes in which there is some obscure point of law; there are others in which a suitably obscure point of law may be invented. My essential proposition, however, is that most topics in trade and commerce are best understood by people in trade or commerce, experts in the field. That must be so, otherwise they would not be able to trade successfully day-by-day, as obviously they do.

That is why the expert plays an essential role in the service of the tribunal.
I will now turn to the principal ways in which that service may be provided. In the limited time available, I will deal with three categories.

First I will touch upon the role of the expert as a sole arbitrator and the ways in which, if necessary, additional legal support may be brought into the room.

Secondly, I will discuss the expert as a member of a plural tribunal, his or her relationship with others, and the possibility of creating a “dream team” to deal with a specific dispute.

Finally, I will look at the task of a tribunal-appointed expert and the relationship between the expert and the tribunal.

Before doing so, however, I would digress for a moment to discuss the relationship between two fields of law. For want of better definitions, I shall call them Positive Law and Natural Law. Positive Law is what it is. Holmes once said, to an attorney in his court, “This is a court of law, young man, not a court of justice.” A great jurist, leader of the American Realist school of jurisprudence, whose definition of positive law is perhaps the most exact that can be found, he was right. To paraphrase something else he said, Law is no more and no less than the prediction of what a court will decide in practice. I would not presume to argue with that; it is unarguable.

As it happens, although I teach in a Law School, I am an engineer. Engineering is variously described as a useful art or the application of science. The aim of engineers, and I quote the Institution of Civil Engineers in London, is the harnessing of the great forces of Nature in the service of mankind.

Please think about that for a moment. No one is beyond the laws of nature. I and my colleagues serve the laws of nature every day of our lives. If the bridge is not strong enough, it falls.

Engineers know well the famous accident to the bridge at Tacoma Narrows and it exemplified what I want to say. Because of a peculiarity of the wind through the gorge, and the design of the bridge – it was a suspension bridge – oscillations were induced in it and became progressively more severe over a period, eventually it broke and sent at least one abandoned vehicle down with it. The incident led to changes in design to take account of the effects of wind. It was not the first instance of a man-made bridge failing in the wind. The Tay Bridge Disaster, in the nineteenth century was another.

Now, there would have been time, once the Tacoma Narrows Bridge started to oscillate, to apply to the court for an emergency injunction to prevent it. I daresay that it would have been easy to persuade the Judge of the public interest.

But, and this is the point I wish to make, the injunction would not, could not have been effective. The bridge would still fall. Canute demonstrated to his courtiers that all his undoubted power could not cause the tide to turn. Galileo admitted to his inquisitors that the Earth did not move around the Sun. It was res judicata, but nobody told the Earth, and still it moves. That is the nature of the law I serve. Unforgiving, inflexible, certain (but only insofar as it is correctly known). A hard mistress and not one whose rules may be changed by statute, by fiat or by a determination of the court. Natural Law.

And Natural Law governs both material and immaterial matters. There are laws of Physics, Chemistry and Mathematics, but there are also Laws of Aesthetics, of Logic, of Morals and of Human Behaviour. We specialise, of course, and we can learn more of some Natural Laws than we can of others, but none can pick and choose which Natural Law to apply. It applies without our intervention.

Now this may seem a little remote from Commercial Arbitration, but it is not. The principles of the Law of Obligations are essentially Natural Law principles. In Contract, they spring from the logical consequences of the ability to communicate ideas and wishes and, in particular, promises. In other areas, tortious obligations, they spring from the twin principles of free will, which makes us responsible for the consequences of our actions, and our duty to one another, a necessary part of social existence. And Arbitration, of course, is a creature of the promise. It has a foundation in Natural Law. That is fundamental and inevitable. International Arbitration is, by definition, universal; the Laws of nation states, the only positive Laws, are not. I am not here discussing state recognition, that is another matter altogether.

That digression has been to show you something of the thinking of a non-lawyer and the context in which a non-lawyer may approach the resolution of disputes. No one ignores positive Law, of course, it governs our practical decision making. Nevertheless it is not our starting point.

I will deal only briefly with the expert as sole arbitrator. The advantages of trusting a dispute to someone who understands the nature of the problem are self evident, as is the moral strength of an agreement to abide by the judgement of a peer in one’s field of work. There are three aspects which need attention. One is the need for such and expert arbitrator to acquire the appropriate procedural skills, for which training is available. Most senior professionals, in every sphere of activity, have experience of managing meetings fairly. Another is the occasional need for the arbitrator to seek legal advice, which has always been a traditional right, although occasions for it are rare. The third is the problem of transparency, which is overcome by the expert arbitrator setting out, for the parties, such personal knowledge as may be relevant, and inviting them to deal with it if they wish. Expert arbitrators may be in a minority on the international scene today, but there are several of them and there may well be a recovery of numbers as training becomes more widely available.

The advantage of at least one or two experts in a multiple tribunal is also, I suggest, self evident. That is especially so in modern international arbitration, where the party appointed arbitrators are required to be neutral and not to act as a kind of quasi-advocate for their appointers. Non-lawyers are not accustomed to advocacy and do not have the contentious instincts of the professional advocate. That makes them well suited to a neutral role.

I wish particularly to alert you to the enormous opportunity which the parties have to create an ideal tribunal for the problem they have to resolve. I have called it the “dream team” approach. Imagine, if you will, a build-operate-transfer project, to manufacture ethical pharmaceuticals to be marketed in an area where only imported products have been available. Now assume that disputes have arisen, during construction, about the performance and profitability of the plant.

What I suggest is that the parties and their lawyers could put together a tribunal which comprised, say, a chemical engineer, an expert on project finance and a lawyer familiar with the country where the construction was taking place. Not only would those men or women be able to deal with their respective fields. If given the opportunity, they would create a collegiate team which would be able to discuss issues from widely differing points of view, bringing a synergy to the arbitral process. The whole would be greater than the sum of its parts.

That is what I had in mind when I spoke of the relationship between the members of a tribunal. It is a collegiate relationship, between colleagues, not a relationship of contentions. One distinguished commentator has suggested that the most important step in an arbitration is taken when the arbitrators have dinner the night before the first meeting.

I think that the opportunity, in arbitration, to create tribunals in which differing methods of thought interact in the interest of truth and justice, is one of the most exciting features of modern jurisprudence. It may be an exaggeration to suggest that experts eventually will play a vital role in making justice open and transparent, but I believe the possibility is there. It is why I teach and it is why I came here. We may have seen the peak of the closed legal approach of the nation-state, at least in commerce and in civil litigation. Openness is the opportunity offered by the twenty-first century and all the modern educated professions have to play their part in it.

Now I turn to the service which the expert may give as witness or investigator for the tribunal. I will not deal with experts appointed as members of the legal teams of the parties; others will discuss that role.

Various legislation covers the appointment of a tribunal expert. The English Arbitration Act of 1996 refers to advisors, assessors and experts, but does not differentiate greatly between them. Distinctions between those roles may be somewhat technical; Article 26 of the UNCITRAL Model Law(2) refers only to experts and, I suggest, sets out the natural requirements for the task. An expert or experts may be appointed – no prescription as to the nature of the expert – and, unless the parties agree otherwise, that expert must be available for examination. The Model Law also imposes a duty of co-operation on the parties.

In any reference, the decision as to whether or not to appoint an expert is a decision of the tribunal. Although the parties have the right to agree otherwise, the tribunal’s discretion is complete, both as to whether to appoint an expert and as to who the expert should be. In practice, however, it often may make sense for the tribunal to invite the parties to agree upon an expert.

The expert’s role is defined by the tribunal, in the light of the views of the parties. Ideally, there should be precise terms of reference, which may take the form of a series of questions. The expert can play a useful role in suggesting additional questions and in drawing up the terms of reference, but the final decision will be that of the tribunal(3).

The tribunal’s expert is an extension of the power of the tribunal to make enquiry. That was brought home to me by a distinguished professor of law who described a mission which arose for a tribunal of which he was chairman. The field of the dispute was esoteric, and the tribunal could not find an expert in the field who did not have connections with one or other of the parties. There were documents to be examined and enquiries to make. Accordingly, the tribunal appointed a gentleman, not from that field of business, but from a generally similar discipline, to examine the documents, to make the enquiries and to report to the tribunal. Almost an agent de police judiciaire, you might think.

One method of proceeding, which I have found successful, is for the parties to give their reasoned answers to the questionnaire before the expert’s enquiries begin. This gives a structure to the enquiries. Then, the first report is given for their comments and the final report may incorporate the comments given by the parties. That may make unnecessary the examination of the expert before the tribunal, but the tribunal may wish to have the expert present to comment upon any further evidence. Because the expert can be examined, he or she may be relieved of the obligation to ensure that both parties are present at any phase of the enquiry. That can save a great deal of time and expense, but the expert must report upon anything he or she takes into account. The principles of Natural Justice are not suspended for the expert, only made a little more practical. Any basis for the expert’s opinion must be made known, and any documents made available to the expert ordinarily should be available to the parties and the tribunal. An exception may be made for trade secrets; the tribunal may order some material to be shown only to the expert, who may then refer to it in a way which protects the secret. It is a procedure which requires care by both expert and tribunal.

There is much more to be said about the expert in the service of the parties and in the service of the tribunal. What I have said here has been only an outline. There is a more extensive treatment on the author’s web site at<http://www.hartwell.pwp.blueyonder.co.uk/Paris.htm> and I am always happy to answer questions and to discuss the topic generally.

 

Notes:

  1 External Professor, University of Glamorgan School of Law
Professor, Brunel University Law School
Senior Partner, BHA Cromwell House, Consulting Engineers coloured ballreturn
  2 Article 26. Expert appointed by arbitral tribunal

(1) Unless otherwise agreed by the parties, the arbitral tribunal

  • (a) may appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal;
  • (b) may require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in a hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue. coloured ballreturn

  3 In English litigation practice, under the Civil Procedure Rules (Article 35), the expert is not strictly a tribunal’s expert but a single joint expert appointed jointly by the parties. This leads to his being instructed by the parties, sometimes jointly, sometimes in two separate sets of instructions. The Rules are new, and the implications of the approach have yet to develop. coloured ballreturn
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Recessional

 

Rudyard Kipling wrote this in 1897

 

God of our fathers, known of old—
Lord of our far-flung battle line—
Beneath whose awful hand we hold
Dominion over palm and pine—
Lord God of Hosts, be with us yet,
Lest we forget—lest we forget!

The tumult and the shouting dies—
The Captains and the Kings depart—
Still stands Thine ancient sacrifice,
An humble and a contrite heart.
Lord God of Hosts, be with us yet,
Lest we forget—lest we forget!

Far-called our navies melt away—
On dune and headland sinks the fire—
Lo, all our pomp of yesterday
Is one with Nineveh and Tyre!
Judge of the Nations, spare us yet,
Lest we forget—lest we forget!

If, drunk with sight of power, we loose
Wild tongues that have not Thee in awe—
Such boastings as the Gentiles use,
Or lesser breeds without the Law—
Lord God of Hosts, be with us yet,
Lest we forget—lest we forget!

For heathen heart that puts her trust
In reeking tube and iron shard—
All valiant dust that builds on dust,
And guarding calls not Thee to guard.
For frantic boast and foolish word,
Thy Mercy on Thy People, Lord!

Amen.

1897

 

But we forgot,
we forgot.        
Comment, 2012

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These are some webpages with Tiny links

GMBH Front Page and Caricature  http://tiny.tw/cXQ

Dispute Closure Theory  http://wp.me/pZlBS-2X

Who Shall be the Arbitrators?  http://tiny.tw/cXR

Geoffrey’s CV http://tiny.tw/cXS

Experience as an Expert Witness http://tiny.tw/cXT

From Liber Amicorum Eric Bergsten – The Commercial Way to Justice  http://tiny.tw/cXU

An Introduction to International Commercial Arbitration http://tiny.tw/cXV

The Reasoned Award in International Arbitration. http://tiny.tw/cXW

Arbitration and the Sovereign Power  http://tiny.tw/cXX

Specimen Award  http://tiny.tw/cY2

Arbitration in Context Legal, Contractual or Ethical?  http://tiny.tw/cY3

The New York Convention of 1958, A Basis for a Supra-National Code?  http://tiny.tw/cY4

Tower Bridge, London  http://tiny.tw/cY5

A Section through one Bascule  http://tiny.tw/cY6

Ariel Steam Engine  http://tiny.tw/cY7

Use of Experts in the Service of the Tribunal  http://tiny.tw/cXY

Sighted Justice: the Ethical and Practical Role of the Expert  http://tiny.tw/cXZ

Construction Disputes http://tiny.tw/cY8

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Extracts from an essay:Ethical theory and the problem of closure, Tom L. Beauchamp, Scientific Controversies: Case Studies in the Resolution and Closure of Disputes in Science and Technology, H. Tristram Engelhardt, Jr., Arthur L. Caplan ed. – Cambridge University Press, 24 Apr 1987. ISBN 0 521 25565 1 hard covers ISBN 0 521 27560 1 paperback

Blogger’s Note:  I have tried to display the gist of Tom Beauchamp’s argument.  Necessarily much of his discussion has not been borrowed but I set out enough, I hope, to show the reasons for his classifications of closure.

Sound argument closure

The first sense of’ closure, which I shall refer to as sound argument closure, is the following: Closure occurs if, and only if, a correct position has been reached in a context of controversy, thereby rendering opposition views incorrect. Philosophers interested in problems of justification (as distinct from purely conceptual or purely meta-ethical investigations) have been interested in finding either a general method for the resolution of problems or a particular resolution of a single problem. In either case, closure is achieved if the correct answer to the central question(s) is provided. The controversial issue is then truly decided, even if social or professional controversy continues thereafter. Accordingly, closure in this sense can occur even if agreement has not been reached in the context on the merit of any given position and even if there is a pervasive conviction of non-resolution.

Consensus closure

A second sense of closure is connected to the first: Closure occurs if, and only if, in a context of controversy a consensus has been reached that some position is correct or fair and opposition views incorrect or unfair. Here it does not matter whether a correct or fair position has been reached. It does not even matter whether, as a matter of justification and method, some point of view is well defended. Nor need principals believe that a permanent solution has been found, or even a definitive one. It only matters that there is a consensus agreement that the force of one position has overwhelmed others. Issues central to a controversy have in that context been resolved, and it is therefore routinely treated as no longer a matter of controversy.

Settlement can come by any route whatever, and the settlement may be appropriate or inappropriate. Though it is unlikely, it is even possible that the controversy could be entirely decided in terms that Ernan McMullin has characterized as nonepistemic factors (see chap. 2, this volume). That is, the weight of evidence might play no role at all in bringing about the consensus. It follows that it is not a logically necessary condition of closure in this second sense that there be argument or theory, and the premises and conclusions of arguments can be irrelevant or false. It also does not matter whether the controversy later reemerges in substantially the same form. Consensus at the time, in the context, is sufficient.

Procedural closure

A third sense of closure is more familiar: Closure occurs if, and only if, an issue is ended by formal, procedurally governed efforts to terminate the sustained discussion that characterizes controversy. I call this sense of closure procedural closure. Here a correct resolution, or “sound argument closure,” need not be present (even if it is a superior resolution), for – as in the second sense – settlement could rest on irrelevant, inappropriate, or even false grounds. Considerable disagreement among disputing parties may also be sustained indefinitely.

It is doubtful that this third form of closure works effectively to end moral controversies more frequently than does the first form. That is, procedural closure usually works only temporarily, for the documents, arguments, or votes that it generates seldom if ever reach to the deepest layers of controversy.

Similarly, new cases before the courts that differ from previous precedent cases may reintroduce a controversy thought to have been resolved by previous court decisions.

Closure by natural death

A fourth sense of closure is the following: Closure occurs if, and only if, a controversy has come to an end through a gradual natural death.

I shall refer to this form of closure as natural death closure. Although controversial moral problems do not frequently find closure in this sense, such closure is not rare. Issues are sometimes closed out even though there has been no definite intention to close them out, no procedure for closure employed, and no sound argument resolution known to have been provided. Interest in the issues simply disappears, and no new arguments are found to advance them. They vanish.

Sometimes natural death closure occurs when an issue has not actually died but has crested as a topic of controversy and so has lost its status as an ongoing issue of importance. It may never die or be closed in the aforementioned senses; but its standing as an issue has been crippled, perhaps because combatants have tired, and it is no longer the focus of sustained controversy.

[It has been argued] that this concept of natural death closure perhaps unjustifiably stretches the general notion of closure beyond acceptable conceptual boundaries because in this case controversy simply disappears or is abandoned, rather than achieving resolution. That is, controversy is overtaken by a dynamic flow of events and either is never resolved or is recast in the form of some related or more circumscribed controversy. Although [the] criticism has its appeal, I think it unobjectionable to speak of a controversy’s being closed, in much the same way as a case is sometimes closed by a police department or a court – namely, in those cases where disputing parties simply stop disputing. It is irrelevant whether controversial points were closed in either the first, second, or third senses above, for the case is closed, even if no such resolution occurred and irrespective of the reason for closure. Moreover, it is also true of at least the first and third senses of closure that central issues in a dispute sometimes continue to be discussed and may ultimately turn into some related but distinguishable controversy.

Negotiation closure

A fifth sense of closure — the sense in which I use the term almost exclusively hereafter — incorporates some elements of earlier definitions but excludes other elements: Closure in this fifth sense occurs if, and only if, a controversy is settled through an intentionally arranged and morally unobjectionable resolution acceptable to the principals in the controversy, even if they regard the resolution as compromising their ideal solution. This fifth sense suggests the reaching of conclusions that are well defended by argument, perhaps argument from ethical theory. However, it is not required — as sound argument closure requires — that there be only one correct, best, or fairest answer to the central question(s) constituting the controversy. Closure can be achieved in this sense by compromise — in contrast to sound argument closure, where such compromise is impermissible.

This fifth sense does not require that an agreed-upon resolution of the controversy be fully satisfactory and so noncontroversial in terms of the preferred moral standards of each principal. It requires only that the resolution achieved be minimally satisfactory. Thus, as in the case of three previous senses of closure, this fifth sense paradoxically permits a controversy to be closed when disputing parties still hold unclosed (in one of the other senses of closure) differences of opinion on the moral issue generating the controversy. I shall refer to this sense of closure as negotiation closure: The negotiation is a process, and compromise is the outcome. (A negotiation of course need not eventuate in a compromise. There may even be a settlement without compromise.)

Quoted from Tom L. Beauchamp with acknowledgements

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