Archive for the ‘Law’ Category

Musing about AI and responsibility

A recent article on the Ethics of AI led me to think about responsibility for the consequences of decisions by an AI entity.

Arguably, however autonomous an AI entity, its manufacture, programming, and energising must derive, directly or indirectly from an human originator or human enterprise – a creator – accessible in a way our Creator is not – at least in this world.

That creator may have delegated duties to an operator such as the driver/pilot of an autonomous vehicle. My point is that, at some level, the most autonomous device always will be directly or indirectly traceable to a legal person; a second – or higher – level device ultimately will be so traceable.

Even when the intellect of the artefact becomes superior to that of the human originator, as it may, the artefact will remain an artefact. Its decisions are the responsibility – be it never so indirect – of a human.

There will be a question as to the human succession when the first originator dies but the law, though differing from jurisdiction to jurisdiction, can deal with such problems.

An autonomous vehicle at large is, I imagine, no different from a tiger. The owner is responsible. The English case of Rylands v Fletcher [1868] UKHL 1, LR 3 HL 330, (1868) LR 3 HL 330 provided strict liability for the release of dangerous things that cause damage. I would expect other jurisdictions to have such a law. I would suggest that it is a logical part of Natural Law.

I haven’t seen much discussion of ultimate liability in the generalisations about the ethics of quasi-autonomous entities, but I may not have been looking. I would be interested in any reaction to my proposition. There is something finite about an accessible, worldly creator.


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The main part of the title is taken from an article by Nicholas Peacock, Donny Surtani, and Pritika Advani, of Herbert Smith Freehills  – here is a link to the article.   The argument, I suggest, is not restricted to India.  Every time the crime of fraud arises in arbitration, whether in Claim or Counterclaim or even in incidental evidence or argument, an arbitrator has to look into his or her appointment and, indeed, conscience, to know what to do.

I have argued long and often that arbitration is no process at law.  Arbitration has no role to play in criminal law.  An arbitrator’s decision can neither convict a criminal nor can it give effect to truly criminal acts and intentions.

Like any other proposition, any assertion of fraud relevant to the outcome of an arbitration must be tested and assessed according to the balance of probabilities, that is to say that, to succeed,  they must be found more probable than not.  Whether or not there is fraud alleged is a private matter within the arbitration and it is submitted that the mere fact of fraud and its consequences in the arbitration can be decided by the arbitrator or arbitrators,

There is no direct link between the private process of arbitration and the public processes of the criminal courts.  A decision of fraud in an arbitration is private and remains so.  However, an arbitrator who is satisfied, from the evidence, that a fraud may have been committed, may have a duty – either to his own country or another country affected by the offence – to report the suspicion.  Confidentiality, if it exists at all, exists from the nature of the arbitration agreement itself.  It cannot override the public duty to report the crime.

It could be sufficient for an arbitrator to rely upon a party or Counsel to report a fraud.  It is possible, but unlikely, that the parties will be complicit in some fraud against a third party.  It is hard to envisage Counsel as being complicit in such a fraud.  However, arbitrators are not concerned with the regulation of party representatives who may be anyone of a party’s choice.  The representatives may themselves be selected to be privy to the fraud.

In my opinion, an arbitrator should be very reluctant to report a fraud unless he or she is certain beyond a peradventure that a fraud has taken place and the perpetrator can be identified.  If there is no more than a suspicion, however strong, the correct action should be to withdraw from the reference.  It may be necessary to account to the parties with an explanation, but that may have to be very carefully worded,

Having said that, the arbitrator may be compelled to report his suspicions, should he or she consider that the is a risk to the person.

If the arbitrator has a duty to report a fraud, is that duty owed to the seat of the arbitration, to the domicile of one or other or both parties or to the place of performance of the contract (as when constructing a building)?

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Lawyers understandably regard the Rule of Law as the Rule of The Law, that is to say the The Law of their nation states or an international consensus – insofar as can be achieved – derived from those states or bodies, such as the ICJ, created by them.

The word “Arbitration” means different things to different folks.  In history there has been various English legislation, of which the Arbitration Act 1996 is but the latest example of a series that may have begun with that of 1698 that followed the report of John Locke a year or two earlier.

The distinguishing feature of those Acts was that they said to disputants, in effect: “You may settle your disputes yourselves and come to the Court only as a last resort.”  Indeed, the current statute speaks in terms: “the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;” and notably, “in matters governed by this Part the court should not intervene except as provided by this Part.”

The Act then makes it clear that the so-called tribunal is no more and no less than an extension of the parties themselves.  There are agencies, the ICC arbitration facility is one such, which exist to provide a commercial service.  That service includes administration and the use of a set of rules but, crucially the parties retain the ability to select their arbitrators (save in certain circumstances) and even the presiding arbitrator – often selected by the other two.

That is the arbitration contemplated by the lexicographers of OED when they wrote the definition: “The settlement of a dispute or question at issue by one to whom the conflicting parties agree to refer their claims in order to obtain an equitable decision.”

There is a difference between the arbitration I have considered so far and the arbitration beloved of my lawyer friends.  Their approach seems to appeal to authority, not the Judges but the arbitrations arranged, shall I say authoritatively.  The thread seems to run through the argument.  John Mortimer, in the context of his Rumpole stories named it as the golden thread of The Law.  The Law of states because what other Law can there be?

Now isn’t the time to seek an answer to that question.  Aristotle seems to have come close to it but I won’t try lest, like Icarus, I fall.

Sadly, there seems to be a difference that cannot be resolved.  Laymen (and those who drafted the legislation, in England and elsewhere – vide the UNCITRAL Model Law) expect the arbitrators to be their peers (as still they are, e.g. in trade associations).  Lawyers expect to clothe arbitrators with authority, even if it only a notional authority.

I have come to the conclusion, reluctantly, that the debate, if it is still a live debate cannot be resolved.  There is a street in the ancient city of Chester, where the upper stories of the houses overhang the pavement so that the occupants can converse from one side of the street to another.  Sadly, we like they, will never resolve our difference while we argue from different premises.

Perhaps, if we can think of an arbitrator – but of which kind?

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I couldn’t find this extract by searching through the usual sources, so I thought it might be handy to put it here.  I have no idea whether or not it remains good law (the old White Book has been superseded by CPR – this is all about England and Wales) but is seems worth an airing!

Note to s.67, Solicitors Act 1974

Extract from The Supreme Court Practice 1982 at [3071] p.851.

As far as the fees of expert witnesses are concerned, in the case of Re Leighton (Solicitor), Young v Leighton, in Chambers, 1969 unreported, Mocatta J. called on the Taxing Masters for a certificate as to the practice. This was given in the following terms:

To the Hon Mr Justice Mocatta

In compliance with your Lordship’s direction the Taxing Masters of the Supreme Court Taxing Office beg respectfully to certify as follows:

  1. It is within our knowledge that solicitors who engage the services of a professional witness, or who call such a witness to give evidence on behalf of a client are personally liable as a matter of professional etiquette to discharge that witness’s fees, whether or not they have expressly or impliedly contracted to do so. It is settled practice for solicitors to pay such fees, which are treated as a professional disbursement as between solicitor and client in a solicitor and client bill of costs.
  2. Such disbursements are habitually treated upon taxation of such a bill as an item properly so introduced.

Dated November 21, 1969 Signed . . . . . . . . . .

Judgment was given in accordance with the terms of the certificate.

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I don’t know how friendly they are at Le Canard or anywhere else in the French printing industry.  Compositors in London are a pally sort of lot.  Perhaps it’s because they often work in the evening or at night.  I don’t know because this is a blog post about arbitration.  Isn’t that a surprise!

Arguments abound as to whether arbitrators are obliged to follow the black letter law – and if so what black letter law.  Are we talking about the arbitration law of the place of arbitration; what if the arbitration isn’t taking place at the seat?  And what about that Court decision handed down as you sat down to write the Award?  Does the law of the Contract prevail – or the Lex Mercatoria, the law Merchant.  Where does the Natural Law fit in – or the National law of the Claimant or the Respondent?

There’s enough there to make yet another arbitration manual, perhaps even a tome of 1000 pages.  Arbitration certainly isn’t the simple product of an agreement any more but who is a layman to challenge the great intellects of the law?

After three paragraphs, I have avoided my subject long enough.  Today, I am discussing arbitration agreements that permit the arbitrators to decide ex aequo et bono or as amiable compositeur(s).  I debated in my mind whether to italicise these two expressions as words foreign to English and decided against it.  In the context of  my subject they have become part of the language.

To put these terms into perspective, I would start with what seems to me a good point of reference, Article 28. of the UNCITRAL Model Law on International Commercial Arbitration,  “Rules applicable to substance of dispute”.  I know that the Model Law may not be law where you come from, or your jurisdiction may have adopted a variant or legislated on a frolic of its own, but I need a starting point and Article 28 is as good as any!

(1) The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system of a given State shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State and not to its conflict of laws rules.
(2) Failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.
(3) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so.
(4) In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

Most modern arbitration statutes and most institutional Rules have broadly similar arrangements.  The 2010 UNCITRAL Arbitration Rules read, at Article 35:

Applicable law, amiable compositeur
Article 35
1. The arbitral tribunal shall apply the rules of law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the arbitral tribunal shall apply the law which it determines to be appropriate.
2. The arbitral tribunal shall decide as amiable compositeur or ex aequo et bono only if the parties have expressly authorized the arbitral tribunal to do so.
3. In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract, if any, and shall take into account any usage of trade applicable to the transaction.

I noticed UNCITRAL themselves put the words under discussion into italics; some amiable compositor, no doubt.  Enfin, je reste sur mes positions.

No doubt you all will be delighted at (2) of the Model Law.  Why conflict of laws rules are preferable to the arbitral tribunal simply applying the rules of law which it considers applicable (I think that’s called the voie directe)  rather than going via the conflict of laws rules (the voie indirecte) I shall never know.  Conflict of laws is an unnecessarily complex field of circular arguments whose principal purpose seems to be as an area of academic study (and possibly a source of fees, unless that’s just a layman’s cynical view).  I note that the CoR rules are excluded specifically in (1) and that the Rules adopt the voie direct.  Isn’t law fun?  The whole business of CoR might be said to be dicey (a joke about English jurisprudence – my apologies to all you serious teachers!).

The principle that can be distilled from these formulations is simply that an arbitrator or a panel of arbitrator shall do as the parties expect – or rather as the parties must be deemed to have expected when they made their agreement.  That’s an argument to be developed another day, however.   It is the provision relating to “. . .  as amiable compositeur or ex aequo et bono.” that I discuss (italics as I quote – I wish I hadn’t started this!).

The two terms are so often together, often, as in the UNCITRAL texts, in the same sentence the distinction becomes blurred.  Both imply some departure from law but Articles 25(1) of the Model Law and 35.1 of the Rules already provide for rules of law which need not be the black letter law of a nation state.  Religious laws such as the Islamic or Jewish laws, UNIDROIT, Lex Mercatoria, all are rules of law, however uncertain of interpretation, but these two terms must mean something different.  Not only are they different from law or rules of law, they must be different from one another.  Otherwise why would the draughtsman (who may, of course be a woman – let’s not go there) use two terms rather than one?

Something to be decided ex aequo et bono (I give up. the italics are handy) is something that is to be decided by principles of what is fair and just without any constraint of law.  If a decision is to be made according to extra-legal principles it is as well to explain them in the reasons for an award.  There is, however, no obvious reason for departure from the process of evidence and argument.  Indeed argument may be of value in developing the necessary principles and appealing to the arbitrator’s sense of Justice.

To make an award as amiable compositeur (I’ll live with it now!) may take us out of our legal comfort zone but in a different way.  The usual French meaning is that of conciliator, a word which is used by many lawyers interchangeably but, I think, wrongly with mediator.  I haven’t found much in the  jurisprudence to help with this meaning so I am flying blind.  Professor A F M Maniruzzaman, in his commentary, The Arbitrator’s Prudence In Lex Mercatoria: Amiable Composition And Ex Aequo Et Bono In Decision Making (Mealey’s Arbitration Reporter, December 2003)  discusses the application of Lex Mercatoria in Amiable Composition but, I would argue with great respect,  is less concerned with the sense of conciliation which the French usage seems to imply.   I suggest that the role of the Amiable Compositeur involves more than the decision making itself and includes the steps inherent in conciliation.   Conciliation leading to a decision.  Lex Mercatoria, after all, can be the rules of law which 25(1) and 35.1 permit.  Insofar as there is a law merchant peculiar to the matters in hand, perhaps the references in 25(4) and 35.1 point to something more than black letter law.

If I am right then an Amiable Compositeur proceeds differently from the usual arbitrator.  He or she conciliates and records, if successful, the eventual agreement of the parties as an arbitral  award.  If the conciliation is not successful, the arbitrator makes an award based on the conciliation process the decision the parties couldn’t make.  To my mind it is axiomatic that the conciliation of an amiable compositeur should not include caucusing or anything else that excludes either party.  On the other hand, the very word amiable implies that the arbitrator will be down among the parties as a friend.

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Note of an intervention in a recent discussion

“If a Layman may comment on what seems an esoteric legal debate.  I suggest that ordinary arbitration is not a process at law.  Nor are arbitrators judges; Equally they are not delegates.  The word tribunal is misleading; arbitrators form a panel or ad hoc committee.
To justify by Natural Law the duty of each member to form his own opinion while seeking to achieve a collegiate finding would perhaps take too long, (I expect that I will try that one day.)  Suffice to say that the duty of the empanelled members to seek common ground is well-founded in custom; remember the two arbitrators who used to refer to an umpire only if they could not find that common ground.
If the three arbitrators cannot, in all conscience, sign the award, or if someone cannot sign it without expressing reservations, then the Collegiate process has failed.
But these arbitrators are paid by the parties alone.  With the most sincere respect to the Supreme Court in Jivraj v Hishwani, they are still servants of the parties if not employees.  The parties are entitled to know what went wrong.  Just as they have a right to the reasons for the Award, they have a right to the reasons for dissent.
The danger, we are told, is that the memorandum of dissent will be taken into account by a Court in proceedings for setting aside or for enforcement.  The answer to that, I suggest, is simple.  The dissenter is either wrong or right.  If the dissent is wrong, the Court will discard it; no harm done.
If, on the other hand the dissenter is right, then the Court will no doubt find accordingly and harm, possibly serious harm will be averted.
It seems entirely logical, but then I’m an Engineer and no Lawyer.​”

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I was talking, well chatting over the Internet, about the cost of arbitration when a  friend said, “And what about the cost of all that disclosure?”.  It made me think, because, before I studied Law, I had to learn a smattering of Swiss Law rather quickly, having been appointed as arbitrator on a panel in Switzerland.  Berne actually – it may be the capital but it was not easy to get scheduled flights from London or Budapest.  You might argue that both sides were equally inconvenienced.

Anyway, there was no discovery and, as I recall, no requests for disclosure.  To common lawyers, that may seem strange.  Those piles of documents are part of the fun, as is sitting in an opponents office reading his files in case there’s anything interesting there – there never is, but the Client is paying . . .

But why discovery?  To answer that, one must go back to the first meeting with the arbitrator.  One party, often the respondent, will say, “We don’t know how much time and what witnesses we need until we know their case.”  Really?  These parties have been wrangling for months, perhaps years, over every jot and tittle of the facts and the arguments that got them here.  In the Arbitration Act 1996 (England and Wales – by the way, the University of Glamorgan is now subsumed into the University of South Wales) is the proposition, “The object of arbitration is to obtain the fair resolution of disputes . . .”.   There has to be a dispute, a claim that is not accepted, for an arbitration to exist at all.  It’s no good saying, as one might in a Court, “I’m sure he’s liable for something, let me sift through his papers to see what it is.”.

I don’t say that disclosure is never necessary but it isn’t necessary for the creation of a case, for making a claim.  It may be necessary as proof but then the claim has been set out and it’s proof that is needed.

I’ve never known whether English/US style discovery is purely for fishing of if lawyers hope that the prospect of all those documents will persuade their opposite numbers to make a deal.  Whichever it is, it doesn’t often work.  The high cost of disclosure and the associated reading and copying – never selective – seems to be slipping into International Arbitration, as if it weren’t expensive enough.  It would be good to avoid it.

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