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EFFECTIVE CASE MANAGEMENT
Lionel Persey QC
Quadrant Chambers
London has, until now, been the arbitral forum of choice for maritime disputes. Over
the past 50 years the vast majority of maritime arbitrations have been held under the
auspices of the LMAA. It would be dangerous to assume, however, that this default
position will remain. A third of the world s tonnage is now owned or managed in Asia
and South-East Asia. That proportion is likely to increase with the glut of new-
building over the past few years. The P&I Clubs, to whom we all owe so much, now
have offices in the Far East to service their members. Hong Kong, and Singapore in
particular, are becoming important centres for arbitrations that are held in English
and which apply English law. Chinese and Indian parties increasingly wish to
arbitrate there. It is inevitable in this changing market-place that we are all going to
have to work harder to maintain the LMAA s pre-eminent position.
Others speakers have already identified ways (some more controversial than others)
in which practice and procedure could be altered in order to streamline hearings and
reduce costs. A number of distinguished LMAA arbitrators have sought to
encourage more effective case management in LMAA arbitrations, most recently
Patrick O Donovan at the recent joint LMAA/CIArb seminar. I make no apologies for
repeating today some of the points that Patrick made in his presentation.
Experience suggests that, unless Tribunals are prepared to take a firm hand and to
recognise that they need not be beholden to the parties in managing a reference,
there will be occasions where parties will either ride roughshod over the proceedings
or will simply not focus early enough upon what needs to be done for the efficient
and cost-effective disposal of the reference. In order to prevent this from happening
all (and not just some) Arbitrators need to take a more robust and pro-active role in
the management of references. They should have the confidence to recognise that
they are not the servants of the parties, and that it may sometimes be inappropriate
for them to go along with what is being asked of them. The parties and their
representatives do not always know what is best for them.
There are a number of case-management techniques that are in wide currency in
international commercial arbitrations (and indeed in the Commercial Court) but which
are not always adopted in LMAA references (even though some of them are
identified in the LMAA Procedural Rules). I would like to highlight just a few today.
1. Preliminary meetings. Paragraph 15 of the LMAA Terms provides that the
Tribunal may at any stage of the arbitration require that there be a preliminary
hearing to enable the parties to review the progress of the case and that such
a hearing should be held in complex cases, including most cases involving a
hearing of more than 5 days duration. In my experience Tribunals do not
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always call for such hearings and are often prepared to accept the parties
estimate of the likely length of the main hearing without any inquiry. The
advantage of a preliminary hearing is that it forces the parties and the Tribunal
to give active consideration to what the real issues in the case are and how
they can best be managed. I query whether such meetings should only be
the norm in cases involving a longer than 5 day hearing. The length of the
hearing is surely something that is best discussed and determined in a
preliminary meeting. Such meetings can take place by way of conference
call.
2. Preliminary or key issues. Courts and tribunals have historically been
reluctant to countenance the determination of preliminary or key issues unless
they were satisfied that they were likely to be dispositive of either the whole or
a significant part of the case. The Commercial Court is now much more
ready to determine important issues in a case at an early stage and arbitrators
should be too. The resolution of key issues or sample claims in a case
involving many different heads of claim will often permit the parties to see
where the land lies and thereby facilitate a settlement without having to go
through the expense and delays associated with a hearing that resolves all of
the issues between them.
3. Correspondence with the Tribunal. As counsel one is always vaguely
aware of the several bundles of inter-solicitor correspondence that constitute
the only files in a case that will never be looked at. It comes as a real shock
to see how much of that correspondence flies across an arbitrator s desk. In
one recent reference I received or sent (mainly received) over 470 emails. In
another, where I was sole arbitrator, over 250. Both of those cases
proceeded to full hearings within 8 months of appointment and were very
actively case-managed. Nevertheless, many of the emails should never have
been sent to the Tribunal. Orders not to make applications without first trying
to agree them with the opposing party (in line with the LMAA procedural rules)
would be respected for a week or two before the resumption of the tsunami.
Threats of costs orders against the parties fell on deaf ears (as did much of
the parties correspondence). And of course the Tribunal s costs mounted
significantly because if an arbitrator receives correspondence from the parties
he or she has to read it and, where appropriate, discuss it with the other
tribunal members before responding to it. This all comes at a price. Add to
that the very much more significant costs generated by the parties in writing
the correspondence in the first place and it is easy to see why arbitration can
be such an expensive process. The solution is simple - the parties
representatives should only copy a tribunal into correspondence or make
applications when it is strictly necessary to do so and should run the risk of
facing stringent costs orders when they overstep the mark.
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4. Disclosure. Many parties, and not a few tribunals, assume that traditional
High Court-style disclosure should be given in every LMAA arbitration. I
believe that assumption to be completely misconceived and I know that a
number of full-time LMAA arbitrators share that view. Paragraph 3 of
Schedule 3 to the LMAA Rules recognises that orders can be made to limit
the ambit of disclosure to avoid unnecessary delay or expense and
encourages the tribunal and parties always to give consideration to this,
although I would suggest that the rule is couched in far too permissive terms.
It is now the norm in international commercial arbitrations for parties to
disclose only those documents upon which they rely in the first instance,
leaving it to the opposing party to request those further specific categories of
documents that they wish to see disclosed. I believe that this procedure
should now become the norm in LMAA arbitrations as well. Requests for
specific disclosure are made through the medium of a Redfern Schedule,
named after Alan Redfern who devised the procedure. It is similar to a Scott
schedule in layout. The party requesting disclosure sets out the category of
documents that it wishes to have disclosed together with succinct reasons as
to why such disclosure should be given. The opposing party then responds
item by item in a separate column. The Tribunal then records its decision in
the right hand column. Properly managed, this procedure can lead to a
significant reduction in the amount of disclosure that is required to be given
(and therefore cost). It also ensures that the parties are focussing on the real
issues at all stages.
5. The hearing. Mention has already been made of those all too many cases
where the evidence and argument is not completed within the time allotted. It
can often be very difficult to reassemble the tribunal and parties. Consequent
adjournments inevitably mean extra expense and a delay in the publication of
the award. The solution to this is simple and one that I believe should be
universal. Once a hearing date has been fixed (at or following a preliminary
meeting at which proper consideration has been given to the issues to be
determined, the evidence to be called and the appropriate length of the
hearing) the parties should thereafter be duty-bound to ensure that the
hearing is completed within the time allotted. How does one achieve that?
By limiting the time available for opening and closing submissions and by
adopting a chess-clock procedure that divides the available time between the
parties.
a. Openings. Written openings are now submitted in all LMAA
arbitrations, and are becoming increasingly detailed. This does not,
however, discourage some advocates from seeking to make a detailed
oral opening and to use that opening to draw the Tribunal s attention to
the key documents upon which they rely. In most cases, however,
this should not be necessary. The written openings should have
identified the key documents and the Tribunal should have read them
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in advance of the hearing. There are very few cases in which the
opening submissions of both parties should last more than a morning.
b. Chess-clock procedure. The chess-clock procedure is increasingly
used in arbitrations. In my view its use should be the rule rather than
the exception. It encourages the parties and their advocates to focus
on the real issues in the case. We all know from experience that most
cases turn on very few key points at the end of the day and that much
of the evidence that is adduced proves to be completely irrelevant to
the outcome. The available time will usually be divided 50:50 between
the parties, to use how they wish. When one party is, for good reason,
calling significantly more witnesses than the other then a different
allocation of time may be appropriate. The fair division can usually be
agreed upon between the advocates, although there are occasions
when the Tribunal will have to rule. Absent any bombshells, there
should be no excuse for hearings overrunning. There may not be
time for the advocates to put every part of their case to the other side in
cross-examination, but so what? Provided this is recognised and
understood and the important points are challenged, no prejudice will
ensue.
c. Expert evidence. The issue of hot-tubbing of experts has already
been raised, and it is a technique that can work well and save a
considerable amount of time, provided that the tribunal member is on
top of the relevant technical issues and incisive in its questioning. It is
remarkable how the demeanour of some expert witnesses will change
when sitting alongside their opposite number and answering questions
from the tribunal rather than the advocate on the other side. It is not
unusual in international commercial arbitrations for the Tribunal to meet
the experts in the absence of the parties and their representatives and
either to set them joint tasks or to seek to have them reach agreement
on selected issues. Such a procedure has its attractions (the experts
may be more willing to unbend) but also its potential pitfalls. In my
view this technique should only be adopted if the parties are agreeable
and are kept fully informed as to the subject-matter and scope of any
discussion between the Tribunal and the experts.
d. Closing submissions. These are usually given in writing and (where
appropriate) supplemented by short oral submissions focussing on the
other side s written submissions. That is as it should be. If they can
be produced on the final day set aside for the hearing then they should
be. It is remarkable how productive an advocate can be in producing
submissions to a tight deadline when the evidence and argument is
fresh in his or her mind. There is nothing worse as an advocate than
having to write and deliver submissions long after a hearing is over and
the adrenalin has subsided. And there is nothing worse as a Tribunal
than having to consider such submissions after the faces of the
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witnesses have slipped from the memory and the whiff of cordite is no
longer lingering in the air. In some cases it will be necessary to defer
closings. As a Tribunal I have found it useful in more complex cases
to get the parties to agree a list of those issues that will be addressed
in their closings and to identify those issues on which I would welcome
particular assistance. This helps to ensure that all are agreed as to
the issues that really matter and that the submissions do not end up as
ships that pass in the night.
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