CHAIRMAN'S FORUM

Branch Meeting 17 June 1997

Arthur Harverd

Arthur wanted to look at the future of the Institute over the next year with particular reference to the corporate strategy, published in its 3rd edition last year. He acknowledged the contribution by Geoffrey King who pushed for the overall strategy some 10-11 years ago.

The Institute is now financially strong and human resources are being strengthened, all stemming from the corporate strategy.

Key elements:

Promotion of arbitration in its present form

Foremost learned society

Expand membership

International

Cooperate with

Highest standards

We are all concerned with implementation of the 1996 Act. There was a concentration of effort during last year in learning about the Act. !997 and 1998 will concentrate on implementation of the Act. The use of new powers will determine how useful and popular arbitration will be - this is a once in a lifetime opportunity.

Learning about the Act is a far cry from learning how to exercise discretion. How will the courts react to the way we use discretion? We have a responsibility to push boundaries of powers to reasonable limits. After the 1979 Act there were a whole series of cases testing the implementation. Only when powers are tested to the maximum can we see arbitration as a way of speedy and cost effective resolution of disputes.

We really have to spend much more time as arbitrators on quality of work and quality of awards. There is much criticism of arbitrators, particularly in the construction industry. I was concerned at a recent function to hear criticism of an arbitration award by an Official Referee. Even if there is no criticism we still have work to do - what is good enough today will not be good enough tomorrow!

Training within the Institute is good at procedures but does not spend much time on analytical skills and the decision making process. Having got the power, how do we think it through and come to a decision?

We also need more training in legal issues. At recent interviews of new arbitrators, the majority were tripped up by a barrister on quite simple legal questions. We are great on process, not so good on legal issues. Not seen any CPD on the Civil Evidence Act 1995.

In other forms of ADR we are somewhat on the fringe and perhaps we need to place emphasis on being dispute resolvers. On the world-wide scene our main competitor is the American Arbitration Association who have effectively embraced other forms of ADR.

In a summary of the top 1000 USA companies, 88 use mediation, 79 used arbitration; product liability and personal injury favour mediation 2:1 - suggesting a preference for a non-binding process and cost effectiveness.

So who are our customers? Those people who make the decision on how disputes will be dealt with - therefore usually a lawyer, in or out house.

The majority of lawyers (in average firms) are largely ignorant of arbitration and are surprised if it does not run in accordance with the White Book.

Can arbitration be taught as a subject for LLB, solicitors, bar school? Suggestion for 'moot' competitions. We should invite lawyers to flagship events, publish articles in the legal press, try to get the Times to publish the names of those who achieve Fellowship. We also need to reach business men.

Commercialism.

We have to be profitable, we can do nothing if we don't have the resources. We formed a commercial arm to make us more profitable. Most courses make a net loss when you add in overheads. We have been running courses to suit tutors, limiting numbers below the break-even number, but this is now changing. We should sell books (which is profitable) at courses. We should be better at publicising events.

Questions and comments

F M: Concerned that the basic concept of arbitration has changed, the Arbitration Act does not give power to the arbitrator but to the parties.

AH: Lawyers who are familiar with arbitration will agree powers, others may need guidance from the arbitrator. We should be bringing all aspects of ADR into our remit.

GBH: Concerned about the relationship between arbitration and other forms of dispute resolution - there are several different forms of mediation.

PH: It is necessary to wear a different hat for other forms of ADR. From a recent CIArb adjudication course it seems that many arbitrators' hats are superglued.

DJ: Wonders whether ASL will be able to put on a high standard of seminars at a reasonable cost.

AH: Would hope that such courses as referred to can be transferred to other branches. Hope that we can mount courses to keep the cost down.

GK: Arthur Harverd has brought business direction to the Institute and has now brought in the 3rd edition of the corporate plan. The 1996 Act is not really what people say it is - there is very little new in it. I see the demise of the technical arbitrator. Arbitrators have to become more like judges. The Act is too complicated, we need a good set of Rules. The CIArb Rules are still not available the Institute has let us down. The only time I hear criticism of arbitrators is in meetings like this. Judges only see 1% of cases and losing parties often complain. The parties are dreadful and their representatives are dreadful. Arbitration is not a method of ADR, it is the only binding alternative to litigation. There is a role for other methods but there will always be a place for arbitration. Not too surprised by American statistics, they are mostly industrial relations. Please tell us about ASL. Was the change in the by-law to create Chartered Arbitrators actually passed?

AH: Council meetings are being held where adequate time will be made available for proper discussion on matters affecting membership. ASL has now started, the full spread of directors is not yet appointed. It is gradually moving in and demarcation lines are being defined. The designation was passed but there are a number of amendments to the charter and by-laws and a number of new issues have arisen and need to be debated and will have to go to another EGM.