ADR Institute of Canada Panels
Effective Arbitration in 2022 and Beyond
CanArb Week 2022 kicked off on Wednesday, October 19th, with two panel discussions hosted by the ADR Institute of Canada (ADRIC).
The first program, “Effective Arbitration in 2022 and Beyond”, featured three speakers who spoke on the characteristics of effective arbitration. Mike Schafler moderated and the panelists were J. Brian Casey, Eric Bedard, and Marie-Claude Martel.
Casey spoke first about finding a good arbitrator. He stressed that arbitration is a market, albeit an imperfect one, since confidentiality ensures that parties to an arbitration know little of prospective arbitrators’ previous work product. As such, arbitral appointments are subject to the forces of supply and demand. Parties choose their arbitrator and, since they will be stuck with them throughout the process, it is essential to choose the best one possible.
When selecting an arbitrator, Casey considers it essential for them to have experience with arbitration specifically, or at least to have taken arbitration courses in the context of continuing education. The reason for this is that litigators do not always make ideal arbitrators. While they are good at arguing, a good arbitrator takes complex facts, digests them, and comes up with the right answer. Good judgement is a key trait for an effective arbitrator. Some lawyers prefer retired judges as arbitrators because they expect a process resembling a court proceeding. f the parties truly desire such a format, they should get it since, after all, it is their dispute. However, most arbitrations should not be run like court proceedings. Martel explained she does not prefer former judges as arbitrators because the jobs are different. In particular, judges might be used to a certain procedural rigidity which can be ineffective in arbitration. With that in mind, however, she mentioned that she too seeks arbitrators with specialized training.
The panel went on to brainstorm several descriptors of effective arbitrators. First, the effective arbitrator is not aloof. They are a team leader who recognizes that arbitration is the performance of a contract. The parties have agreed by way of contract to settle the dispute through arbitration so, the effective arbitrator is collegial, although not necessarily friendly; if arbitrator try too hard to ingratiate themselves with counsel and the parties, they compromise their authority. Second, the effective arbitrator is flexible. They must respect the parties’ wishes if they agree on something and they must avoid rigidity. Casey stressed that flexibility is the main thing that distinguishes arbitration procedure from litigation. Third, effective writing skills are key. The arbitrator must be able to clearly articulate their decision to the parties, as the parties must be able to understand why they were successful or unsuccessful. As counsel, it is important to select an arbitrator who will be able to explain the outcome to the parties so that, even if disappointed in the outcome, the client is satisfied because they understand how the tribunal reached their decision.
As with arbitrators, Martel stressed that training is essential in order for lawyers to become effective arbitration counsel. Arbitration is a specialization, and a lawyer’s behaviour in court will be different from their behaviour in an arbitration. Some lawyers treat arbitration like a court proceeding, which does not always contribute to the goal: to efficiently settle differences among disputing parties. Casey believes the parties must remember they are performing a contract and must engage in this process in good faith.
The Arbitral Process and the Courts
The panel then discussed the situations in which courts may intervene in arbitrations. The first instance was the constitution of the tribunal. Significant time may be wasted in court if the parties cannot agree on an arbitrator. This can be mitigated by careful contract drafting.
Lawyers, arbitrators, and courts should respect the wishes of the parties. A running theme of the discussion was that rigidity is not ideal in effective arbitration. Sometimes it may be in the parties’ best interests to have parallel proceedings if there are multiple, closely connected disputes, but typically they will prefer to have all disputes arising out of the same circumstances to be settled in a single proceeding.
The panel noted that since courts are strained for resources, arbitration could be a useful tool in helping them expedite disputes. Smaller matters which could cause delays in the litigation process could be alleviated through arbitration. This can be true even if the dispute will ultimately be litigated; parties can resolve evidentiary and other procedural disputes through case management arbitrations without having to wait months for a court date. Therefore, courts should view arbitration as a partner, not a competitor.
Some Tips for Effective Arbitration
First, parties and arbitrators should employ the first procedural order to set out exactly how the arbitration will unfold. This order should be as complete as possible, including the schedule for filing documents, the hearing date(s), the procedure for submission of expert reports, etc.
Second, if there is a chance of settlement among the parties, it may be worth considering an off-ramp to arbitration, where appropriate. This way, a party will not hold back from proffering a settlement offer or suggesting a stay of proceedings to attempt mediation because they fear that such overtures will signal weakness. Including the potential for stays to discuss settlements, including through mediation or other such ADR processes in the first procedural order will also makes parties more likely to settle earlier, resulting in a more efficient process.
Third, use the IBA rules for evidence in domestic and international disputes. The IBA rules are as good as any, and consistency makes for better arbitration. While some aspects of arbitration procedure should be customized to the particular parties and dispute, other aspects should be made predictable so that parties can plan for them.
So You Want To Be An Arbitrator?
The second ADRIC panel , entitled “So You Want To Be An Arbitrator?”, offered career advice to lawyers interested in pursuing arbitration work. The panel was moderated by William G. Horton, and featured Eric Morgan, Megan Keenberg, and Myriam Seers. It ran as a Q&A.
How do you establish the credibility necessary to be chosen as an arbitrator?
Morgan reminded the audience that even though arbitrators may have extensive experience as counsel in arbitrations, arbitrators play a much different role, so a change in perspective is needed. He explained that education itself is a great way to signal your interest in arbitrating. After attaining all the necessary education, networking is a fundamental part of establishing credibility as a potential arbitrator, especially since most commercial arbitrations in Canada are ad hoc. He explained that it is important to inform people that you are pursuing this type of work, build relationships through counsel work wherever possible, and take whatever appointments may follow.
Keenberg stressed that the budding arbitrator must keep learning through continuing their education and sharing their knowledge. She recommended a proactive approach; teaching others and mentoring where possible. She also revealed that many arbitrators are selected for their temperament. The arbitrator’s personality, character, and demeanour often informs the party’s selection. It is important for arbitrators to balance being friendly and professional so, they should be careful not to behave too causally. They should be seen as a trusted figure. By fostering these traits, people will think of them as a decision-maker when the time for an appointment arrives.
Seers observed that there may be good networking opportunities through arbitral institutions. Seers primarily works in international arbitration, where institutional arbitration is more common, and she felt that getting involved with institutions is a great way to build credibility and get noticed in the field. She believed that arbitral institutions played an important role for finding opportunities in her career.
How do you view social media? Do you use it? Is it effective?
Morgan mentioned that he uses his own website to facilitate social engagement. He considered Linkedin to be the most useful social media platform to connect lawyers to neutral work, because it is a platform well-suited for publishing short, digestible content with a professional focus. Those shorter pieces can link to longer works, including ones that are published in a more formal venue. He explained that, by becoming a regular poster on LinkedIn, a lawyer can connect with many other users and subsequently improve their practice.
Is there a different strategy for looking for mediation appointments versus arbitration appointments?
Keenberg was surprised to find that, when building her arbitration practice, her mandates did not come exclusively from lawyers. This was in contrast to her mediation mandates which came primarily from parties’ counsel. She was told early in her mediation career to avoid networking with mediators because they were her competition. In arbitration, by contrast, she has received many mandates from other arbitrators. Notably, some appointments she received were from arbitrators at the tail ends of their careers. She feels arbitration is much more of a cohesive community than mediation, at least in Ontario.
What skills and expertise helps you find appointments?
Seers revealed that she spends a significant amount of time considering business development and strategy. She considers the way an arbitrator presents themselves to be very important. It is difficult to market oneself as all things to all people, especially since p parties may be hesitant to choose an arbitrator whose practice covers everything. She recommends marketing oneself to fill a narrower niche. She mentioned various niche arbitration institutions, like the Aviation Arbitration Centre in The Hague, the Silicon Valley Arbitration Centre, and the Fruit and Vegetable Dispute Resolution Corporation in Ottawa. She has her own practice though a sectoral specialization—in mining—and a geographical specialization—in Latin America.
How do you approach money in terms of setting an hourly rate, or in making arrangements with parties for payment for your services?
Keenberg addressed what she described as an often-uncomfortable subject: billing. New arbitrators may feel awkward setting their hourly rates, especially if they are coming from large, full-service firms. She explained that an easy heuristic to utilize is opportunity cost. A simple rate can be determined with reference to the amount of money an arbitrator could be earning elsewhere had they not taken the appointment. This will also aid in building confidence. She advised against advertising reduced rates, for at least two reasons. First, parties and their counsel could feel entitled to that special rate in the future. And second, people tend to feel that they get what they pay for and may consequently undervalue discounted services. As a final piece of advice, she reminded the audience to take deposits to ensure they are fully funded before undertaking a project, and to ensure that they have been paid in full before they issue a final award.
* JD Student, Queen’s University Faculty of Law; Senior Associate Editor, Canadian Journal of Commercial Arbitration.