Feeds:
Posts
Comments

Fees of Experts – Who pays?

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  I have no idea whether or not it remains good law (the old White Book has been superseded by CPR – this is all about England and Wales) but is seems worth an airing!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.

Advertisements

The Society of Construction Arbitrators, [President: Ian Salisbury MA DiplArch RIBA FCIArb] www.constructionarbitrators.org is to host a topical debate SCA logoshortly,  on the motion:

The advice of construction consultants should be privileged, as it is for lawyers.

The proposer is Mr John Riches, Chartered Surveyor, Henry Cooper Consultants

John L Riches is a Chartered Quantity Surveyor and Chartered Builder with more than 30 years’ experience in the construction industry. He started his career as a surveyor for building contractors and having become a chief surveyor left contracting in 1982 to work in consultancy. This move enabled him to develop his interests in dispute resolution in all facets of the construction industry. His experience covers all types of construction works including large and medium scale building works, power stations, nuclear and process engineering installations, roadworks, riverworks and sea defences.

He is opposed by: Mr James Bowling, Counsel, 4 Pump Court

James’s construction and engineering practice encompasses the full range of construction disputes. He appears regularly in the TCC and in domestic arbitrations. He also has extensive experience of acting in adjudications, as well as having been involved in the TCC in a number of the leading reported cases on adjudication enforcement. James’s practice also encompasses construction-related professional negligence disputes. Previous and current clients include major contractors, development firms, as well as private clients and a range of construction professionals.

The Chairman will be our President Mr Ian Salisbury .  (I acknowledge that the above details were taken from the SCA flyer for the event.)

I thought it would be fun to propose an amendment along these lines:-

As you know, I do not profess law and I do not presume to comment upon what may or may not constitute legal privilege.  However, I do assert two propositions that I verily believe. 

The first is that the paramount duty of an arbitrator or arbitrators is dictated to us by the principle audi alteram partem the necessary corollary of which is that the parties be treated equally. 

The second is that the Arbitration Act 1996 provides, at s.34:

Procedural and evidential matters.

(1)It shall be for the tribunal to decide all procedural and evidential matters, subject to the right of the parties to agree any matter.

(2)Procedural and evidential matters include—

(f)whether to apply strict rules of evidence (or any other rules) as to the admissibility, relevance or weight of any material (oral, written or other) sought to be tendered on any matters of fact or opinion, and the time, manner and form in which such material should be exchanged and presented;

Now, I suggest that the Rules of the Court and other rules as to privilege are rules within the meaning of Subsection 2(f).

If that is right then whether or not a document or other information is required is a matter for the tribunal alone.

My own personal practice of forty years or so is to respond to a request, that I order a lay advocate or adviser to disclose consultation information, by suggesting that I direct both advisers to disclose their advice and consultation materials.  Always so far the application has been withdrawn.

In arbitration, I argue, everything that is necessary for a fair decision is disclosable.  S.1 refers. 

Mr President, I beg to submit that the motion be amended to add the words “in arbitration” after “. . . privileged”.  What is done in Court is none of our concern.

I post my suggestion here for comment, preferably before the day so I may consider it.

But it didn’t –

Arbitration, as I have said many times before, is 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. That’s the OED definition and, allowing that this is the English language, and I’m writing in England, on the outskirts of its capital, that ought to be good enough for anyone. Certainly it’s good enough for me.

Lawyers, however, have their own way of doing things and, sure enough, the English Arbitration Act 1996 tries to put it’s own gloss on the perfectly sound definition. In s.1(a), we are told that, “the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense.”. To be fair (there’s that word again) that is a gloss rather than a definition, You may care to call it a purposive definition but the idea is the same, unless you care to argue that the words “fair” and “equitable” have a different meaning.

Some of my lawyer friends seek to argue that s.1(a) provides for a fair process and go on to argue that the result of a fair process must, ipso facto (engineers aren’t forbidden to use Latin, but, if you’re a lawyer read “necessarily”) be a fair outcome. They go on to say for that reason that, even if a legally correct outcome is unfair in the particular case, the section is not breached. To that the short answer must be, “Get real – read the words.”. There is a longer answer – isn’t there always? – but I’ll come to that later.

I am writing from London, but I realise that we’re not the sole arbiters of the language, even if the OED has been the authority for Britain and the Commonwealth for over a century. However, in the nineteenth century Noah Webster Jr. (October 16, 1758 – May 28, 1843) created his variant for political as well as orthographical reasons. His name became synonymous with “dictionary” in the United States, especially that published in 1828 as An American Dictionary of the English Language. (I would argue that it would have been more correct to call it A Dictionary of the American Language but that’s by the way.)

Merriam-Webster Online gives for “arbitration” the definition: “the action of arbitrating; especially : the hearing and determination of a case in controversy by an arbiter”, which doesn’t take us a lot further. The M-W Learner’s Dictionary, however gives “arbitrate” the meaning, “: to settle an argument between two people or groups after hearing the opinions and ideas of both” which seems fair enough to me.

While I am writing about glosses, Rule 3 of the Scottish Arbitration Rules, referenced in s.7 of the Arbitration (Scotland) Act 2010 reads, “Only an individual may act as an arbitrator.”. Arguably, such a rule is otiose, since any body corporate can act only through delegating to a natural person and an arbitral appointment is personal and cannot be delegated (delegatus non potest delegare).

That is an important issue, a crucial issue, for this essay. An arbitrator is an individual and the arbitral panels, typically three, more commonly seen in international disputes, comprise individuals making independent decisions in a collegiate context. Various bodies have come into being to administer or organise arbitration for an additional fee; a slice off the top, if you will, of the arbitrators’ fees. Often they use the word “Court” for reasons about which I will not speculate. Many derive their being from Chambers of Commerce as did the now autonomous LCIA, the London Court of International Arbitration, which has branches in India and, I believe, other places. The probable leader of the world of international arbitration is the Arbitration Court of the International Chamber of Commerce (ICC), based in Paris, also an autonomous non-government organisation.

The important feature of these bodies is that they don’t decide the issues that are in dispute. They may organise the panels who do but they don’t (or shouldn’t) interfere with the outcome. In passing, I note the Rule of the ICC that the panel’s Award must be scrutinised by the Court (read “Management”) before it can be published. Representatives of the ICC point out, if asked, that the Court’s concern is with the form and presentation of the Award. They argue that to call a panel’s attention to the logic of the Award and to note omissions is an administrative service and not a matter of substance. The point is debatable, it is the one individual or the panel that makes the decision – no-one else.

These arbitral institutions – and in recent years they have sprung up in many countries and cities around the world – are not necessary for an arbitration, except in China where CIETAC, the China International Economic and Trade Arbitration Commission is, at the time of writing, in difference with its former branches or agents. Generally, an arbitrator can be appointed, or a panel convened by choice without reference to them. Even in China, where Awards must be issued on behalf of CIETAC (or perhaps one of its authorised successors) the Awards are prepared by an arbitral panel of individuals chosen by the Parties, chaired by an appointee of the Commission but still acting personally.

The question arises: “If the arbitral institution merely administers the arbitration, doing what the arbitral panel could do itself, what value is added for that often substantial additional fee?”.

Administration itself is a consideration. Some Institutions handle all or most of the formal documents helping to keep the arbitrators and the Parties (and their lawyers) at arm’s length. Although contact shouldn’t be a problem it is not unknown, during a telephone call about some administrative matter, such as arrangements for a meeting, for an unrepresented party (and sometimes even a lawyer, who should know better), to start discussion of some substantive issue that should be discussed only in the presence of both Parties. An experienced Arbitrator will know how to avoid that, perhaps by three-way recording, but the buffer of a panel secretary or Counsel at an Institution is a protection.

Another benefit, not often used, is that Counsel at an Institution can be of great assistance to a new arbitrator. A neophyte may be a layman, perhaps a scientist, a technical specialist, or perhaps a lawyer who understands the issues but has no experience of international arbitration. Counsel charged with administering the case can, and do, advise such a neophyte as to the procedure and the rules. They will know how to avoid straying into the substantive matters that are for the arbitrator(s) alone. In this way a new arbitrator may develop.

My personal opinion, however, is that those responsible for drafting the arbitration provisions in a contract, the management of a company or the officers of a public concern, seek the public relations protection of being able to say, “This decision came from the Arbitration Court of . . .”. So much more convincing than, “This decision came from Dr A, Professor B and Mr C”. The grander the title of the Institution, or the better its reputation, the more credible is that protection, for the arbitrators and for the lawyers concerned.

It’s misleading, of course. The decision may be issued and perhaps approved by the Institution but it isn’t a decision of the Institution. It’s the collegiate decision of Mr C, Dr A and Professor B, and as sound or unsound as those three may be. The fact of the Institution’s involvement certainly should not have, and probably did not influence the substantive decision in any way. Only the perception of the decision is changed by the use of the Institution. And that, I suggest, is its added value.

I said there was a longer answer to the lawyer’s interpretation of the English AA 1996 s.1(a), “the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense”. It isn’t very long because it was encapsulated by the late Sir Michael Kerr in his Keating lecture of 1997. He said words to the effect of “There are times when an international arbitrator can do justice where a Judge can not”. That is because a Judge might be constrained by the national law he applies to reach a decision that may be unjust – or unfair – in all the circumstances of the matter.

Thus, an entirely fair and correct procedure, applying the law, might still fail to achieve the object of arbitration (to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense).

But this is the opinion of an Engineer who is not, and does not hold himself out as, licensed or qualified to practise law or give legal advice in any jurisdiction.

Eur Ing Professor Geoffrey M Beresford Hartwell
Chartered Engineer and Chartered Arbitrator.

Coalition for Marriage (C4M)

I make no bones about it: I support Marriage in its ordinary meaning.

I’m certainly not homophobic and I support the idea of partnership in whatever pairing.  I think that folk in stable, on-going partnerships should share whatever rights may be available – taxation as a household, shared property, rights on death of a partner.  That would apply to same-sex pairing, brothers, sisters, mixed siblings, and parent-child relationships.

However, I don’t like the way the modern trend, to use the word ‘Marriage’ to include all these pairings, has become a vehicle for bullying those who prefer the natural use of words like ‘Marriage’.

In this I support C4M – so sack me or cut off my pension!

My grouse is that C4M’s videos have a note: “ Comments are disabled for this video.”  – How’s that for free speech and open dialogue?

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.

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.​”

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.