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Cost Effective Management of Arbitral Proceedings Peter Aeberli Tuesday
9th October 2007

It was a great pleasure to once again welcome Peter Aeberli to one of our Branch meetings. Few speakers can match his uniquely pragmatic approach combined with unparalleled expertise, and it was therefore unsurprising that Peter once again provided us all with some extremely useful and sensible pointers for managing proceedings without incurring huge and unnecessary costs for the parties - unless they're adamant that that's what they want to do, of course!

Over the course of his many references, Peter has given a great deal of thought to effective ways in which proceedings can be managed whilst keeping the costs down. His key pointers concentrate on making sure the parties are properly engaged in the process, helping them to keep their own costs in check, dealing efficiently with documents, managing the evidence and getting the best from any meetings or hearings.

First of all, Peter tries to do away with preliminary or procedural meetings unless they are truly necessary. As long as the dispute does not specifically require otherwise, he writes to the parties asking them to provide, by a certain date, key information like the Notice of Arbitration and supporting documents, a summary of their understanding of the dispute and a statement of their costs to date. He then issues draft directions for the parties' consideration, before finalising the procedure for the arbitration. He tends to keep timescales short, rather than allowing weeks and weeks for things that don't really require it, and he doesn't tend to have hearings on interim or conservatory matters unless they really need it. He will deal with pre-hearing directions either by telephone conference (with all the parties present), or on a documents only basis. Any meetings or telephone conferences must have an agenda to keep things focussed, and the agenda is kept short.

Peter might also consider capping costs, either at the outset or for specific activities (for example, to encourage a meeting of experts to last only as long as it really needs to). He will 'fast track' cost assessment as much as possible, for example by hearing submissions on costs for preliminary issues at the hearing and awarding them there and then. Peter also tries to keep disclosure of documents to a sensible level, whilst at the same time making sure that disclosure isn't restricted too narrowly. He manages the disclosure process very carefully, and encourages the parties to build a common core bundle of documents so that everyone is referring to the same documents and references.

His careful management of the procedure also extends to the management of evidence. He encourages the parties to exchange any factual evidence given by way of witness statements when they submit their statements of case, so that this information is known and exchanged in advance of any hearing. Opinion experts must be managed carefully and briefed thoroughly. If the parties have appointed their own experts, Peter restricts the evidence he requires them to give and encourages them to contact each other before their reports are submitted. He asks them to make their site visits together, and to work to an agreed structure with narrow issues and a common bundle of documents. The then asks them to focus even further by providing a short statement setting out any areas of agreement and/or disagreement.

Peter also has a number of golden rules to get the best from hearings. His first recommendation is that the hearing bundles (which will ideally be the same common bundle being used throughout) should be generated a reasonable time in advance, and he asks for counsel (if involved) to provide written openings. He also asks counsel to provide an idea of the timetable, for example the running order of witnesses and a rough idea of the time they need to examine them. The tribunal should not be afraid to intervene if need be, but must guard against overdoing it. He particularly drew our attention to Grace v. Kelly [2003] 1 All ER 1106 (PC) and Jones v. NCB [1957] 2 All ER 155 (CA), where the following contrasting comments on just the right amount of intervention were made:

Grace v. Kelly

"It is advisable for a judge sitting alone not to maintain total silence but to indicate to the advocate the view which he has provisionally taken and give him the opportunity to comment on any authority on which he proposes to rely."

Jones v. NCB

"… the judge, we fear, intervened far too much … he took the examination of the witness out of the hands of leading counsel for the rest of that day and of his junior counsel next morning...

... In the system of trial which we have evolved in this country, the judge sits to hear and determine the issues raised by the parties, not to conduct an investigation or examination on behalf of society at large..."

More recently, in London Borough of Southwark v Kofi-Adu [2006] EWCA Civ 281, the Court of Appeal indicated that "...within the bounds set by the Civil Procedure Rules, a first instance judge is entitled to a wide degree of latitude in the way in which he conducts proceedings in his court". However, the appeal court was still of the view that "the risk is that the judge's descent into the arena ... may so hamper his ability properly to evaluate and weigh the evidence before him as to impair his judgment...", and the first instance judge was heavily criticised for his somewhat robust treatment of counsel: "...we find it necessary to express our strong disapproval of the manner in which the judge treated [the appellant's counsel] throughout the trial, especially during her valiant and courteous (but, thanks to the judge, largely unsuccessful) attempts to open the case in a coherent and ordered way...". The oft quoted maxim that "an over-speaking judge [or Arbitrator!] is no well-tuned cymbal" seems to hold true to this day!

When dealing with unrepresented parties, the Arbitrator arguably has a role to play in equalling the scales, but must tread very carefully. Extreme care must be taken not to stray into making a point or case for the 'disadvantaged' party, or indeed making up one's own case or points. This is usefully summarised in Chilton v Saga Holidays plc [1984] EWCA Civ 1 (03 December 1984):

"The problem which arises where you have one represented party and one unrepresented party is very well known to all judges and in particular to judges who deal with small claims in the county court. It becomes the duty of the judge so far as he can, without entering the arena to a point where he is no longer able to act judicially, to make good any deficiencies in the advantages available to the unrepresented party. We have all done it; we all know that it can be done and that it can be done effectively. That is the proper course to be adopted. The informality which is stressed by the rule and the requirement that the arbitrator may adopt any method of procedure which he considers to be convenient ... covers the situation where, as so often happens, a litigant in person is quite incapable of cross-examining but is perfectly capable in the time available for cross-examination of putting his own case. The judge or the registrar then picks up the unrepresented party's complaints and puts them to the other side.

... But Mr. Chilton rightly drew attention to one paragraph where it was said by the registrars of the courts concerned that the unrepresented party had the "dubious" advantage of being represented by the registrar ... One of the things that judges have to watch when they are faced with an unrepresented litigant is that they do not become so solicitous for his welfare that they think of all sorts of points to which, on reflection, they would have given very short shrift but, because they thought of them themselves, they develop a curious life and appeal of their own so, if anything, the advantages lie with the unrepresented party."

Taking care not to overstep the mark in the manner warned against in the cases above, another technique that Peter may adopt is witness conferencing (i.e. hearing witnesses concurrently rather than sequentially) with the questions asked by the tribunal, but there are certain minimum requirements if this method is to be effective, namely:

- Professional (non antagonistic) witnesses;

- A clear, written agenda for the evidence;

- A well prepared tribunal;

- A robust procedure.

Prior to the hearing, Peter suggests that it can be very worthwhile for the Arbitrator to set out for the parties what he considers the issues in dispute to be. The parties can then give their observations on whether his understanding is correct. If he is using an inquisitorial, witness conferencing approach in the hearing, Peter questions the witnesses based on the list of issues (and the parties' observations on them) and a preset agenda, although he does give the parties an opportunity to ask questions of each other's witnesses through, and with the permission of, the Arbitrator. He finds this technique very effective, but says that it is vital for the tribunal to be properly prepared. Peter stresses, however, that the procedure should be clearly set out for the parties and reminds us that the Arbitrator is not there to create surprises! He might also consider doing away with opening and closing submissions, and may direct that evidence will not be given under oath (to allow greater flexibility and to encourage a more informal environment).

Using some or all of Peter's techniques can greatly reduce the cost of the proceedings for all concerned. However, his final word is that the parties must consent to any 'new' approach to be taken - if they want to do things in a more conventional and costly fashion then that is of course entirely up to them!

Report by Helena Brown

A full copy of Vincent Moran's paper is available on request by email to Helena Brown (helena.brown@arbitrate.org.uk) and from the Branch's website (Main Menu - Meeting / Speakers papers)

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