Musings on the 2015 QMUL International Arbitration Survey: are clients and counsel aligned in their views of arbitration?

The 2015 Queen Mary University of London International Arbitration Survey has just been released. Sponsored by White & Case and PwC on an alternating basis, this survey seeks to gain quantitative data on arbitration. This year, the survey has opened out to a wider base of contributors, collecting views from academics, arbitral institutions, arbitrators, expert witnesses, in-house counsel and private practitioners on "Improvements and Innovations in International Arbitration". The topics covered ranged from preferred dispute resolution methods, best and worst features of arbitration, appeal mechanisms, most preferred and improved seats and institutions, procedural innovations and regulation of the arbitral system. The survey provides a useful indicator of market views and this post seeks to comment on a few of the responses and conclusions drawn. The full survey can be found here.

Broad themes

Respondents to the survey overwhelmingly preferred arbitration as the method of dispute resolution for cross-border disputes. London, Paris, Hong Kong, Singapore and Geneva were the most preferred and widely used seats, with the most improved seats seen as Singapore and Hong Kong. The ICC, LCIA, HKIAC, SIAC and SCC were the most preferred arbitral institutions. Respondents continued to highlight time and cost as their main concern about the arbitral system, with most favoured "improvements and innovations" directed at reducing both.

Is the arbitral system effective at addressing these concerns?

What is particularly interesting is that many of the "improvements and innovations" highlighted as being needed by respondents in the survey have already been introduced into the arbitral system or are in the pipeline. This suggests that in many instances the arbitral institutions are quick to react to users' concerns and seek to remedy them. For example, the most effective procedural innovation noted by respondents- making it a requirement for tribunals to commit to a schedule for deliberations and delivery of final awards- has been introduced into the 2014 LCIA Rules (Rule 15.10). Concerns about lack of information on arbitrators and their efficiency are also being addressed. Some arbitral institutions are seeking to garner feedback on both the institution and arbitrator performance (such as SIAC's feedback forms and HKIAC's arbitration evaluation system).  There are other innovations within the arbitration market: for example, the website "Arbitrator Intelligence", while not yet fully developed, will endeavour to provide more data on arbitrators' substantive decision-making by collecting published and unpublished awards. Concerns about the role and use of Tribunal Secretaries have already been addressed by many of the Institutions (and other bodies like Young ICCA), who have produced guidelines on the use of Tribunal Secretaries and the role they play, while some have introduced (or may plan to introduce) institutional provision of Secretaries to Tribunals.

It is also interesting that despite the popularity of some procedural innovations amongst respondents (such as simplified procedures for claims under a certain value) the fact that these innovations have already been included in certain institutional rules is not necessarily determinative or even a key factor in their popularity. As the survey comments, reputation and recognition, along with a positive user experience are key. While the addition of innovative features to rules with an existing reputation and recognition may bolster that institution's position, it will not necessarily raise the popularity of a less well known or less established institution.

The survey does, however, highlight that there is real scope for the institutions to be more transparent in the data they publish on the length of time their cases take to enable users to make more informed choices. More information about arbitrators' performance and the selection and challenge of arbitrators under each institution is also seen as an area for improvement. 

Are clients and counsel aligned in their views?

As with all surveys, the demographics of the survey population is of huge importance to assessing the value of the data offered. In this instance 49% of the respondent group of 763 individuals were private practitioners, 12% "arbitrator and counsel in equal proportion", 11% arbitrators and 8% in-house counsel (with the remainder made up of academics, arbitral institutions and expert witnesses). On certain topics the survey does seek to draw out the differences in responses from these different populations. For example, on the most valuable characteristics of arbitration, the approximately 61 in-house counsel respondents chose "confidentiality and privacy" as their second most frequently listed valuable characteristic, at odds with the most valuable characteristics noted by the full respondent group; an  point for counsel to bear in mind, particularly when advising on the drafting of arbitration clauses and ensuring that confidentiality and privacy are appropriately addressed. Notably, the approach to confidentiality remains a differentiating factor between certain of the institutional rules. Similarly, while the full respondent body did not favour an appeal mechanism for international arbitration (77%), it is interesting to note that the lack of an appeal mechanism was highlighted as one of its worst characteristics by the in-house counse group. The survey also suggests that only 46% of respondents felt the conduct of party representatives should be regulated more, but 68% of the in-house counsel subgroup favoured greater regulation of party representatives. Although the survey only shows the responses of a small group of in-house counsel, it may suggest that lawyers in private practice are not quite in tune with the ultimate users, the client, on this issue.

Given the significant proportion of private practitioners in the respondent demographic, the responses on what arbitration counsel could do better are also particularly interesting. Seeking to work with opposing counsel and cooperating to narrow issues, limit document production, encourage settlement and "not overlawyering" were the options chosen most frequently. Does this suggest that arbitration counsel should be quicker to suggest a collaborative (or at least co-operative) approach or changes to the standard procedure to achieve these aims? Are they likely to receive greater traction with opposing counsel than might be expected?

A truly "international" survey?

This is a valuable survey which keeps a finger on the pulse of arbitration practice, monitoring trends and views. However, as with the background of the respondents, it is also important to bear in mind where these respondents were based. The respondents were predominantly from Europe and Asia (79%). As such, the results may arguably not provide a totally global picture. The 2013 statistics for the arbitral institutions (the latest offering a comparison of all major institutions), suggest that the New York-based ICDR (the international arm of the AAA), is one of the largest institutions in terms of case numbers, but it does not figure strongly in the "preferred" institutions. Similarly, in the survey European and Asian seats are generally "preferred" over New York. Arguably this outcome could be understood as a result of the ratio of respondents from each area of the world, rather than evidence of the global preference for users of arbitration.

For further information, please contact Vanessa Naish, Professional Support Consultant, Hannah Ambrose, Professional Support Consultant or your usual Herbert Smith Freehills contact.