Media

Drastic move to boost trade

The Australian Financial Review - 13 October 2006
By Marcus Priest

Arbitrators are considering taking drastic action to halt a slide in business by limiting hearings to no more than 10 days and setting down strict timetables for participants.

The move by arbitrators, many of whom are former judges, is being driven by a concern that arbitration is becoming too legalistic and discouraging potential users because of the time and cost of such proceedings.

Instead, parties are preferring to resolve cases through non-binding adjudications or expert determinations, not just in the construction industry where the trend started but also in other sectors.

In an article soon to be published in The Arbitrator and Mediator journal, Institute of Arbitrators and Mediators of Australia president Laurie James said arbitrations were becoming "more complex, much lengthier" and involved the testimony of more witnesses and the production of far more documents than had previously tended to be the case.

"A strange phenomenon which I have noticed is that many of the legal practitioners, loudest in condemning arbitration and calling for expert determination, are often those who, if appearing as counsel in an arbitration, are most unhappy where there is any departure from the procedures which they would expect to encounter in court and with which they are familiar," Mr James said.

Under new draft rules for fixed-time arbitration, IAMA has proposed to require all arbitrations to be completed within 100 days and the imposition of a strict timetable for the filing of documents to be used in the proceedings.

The use of concurrent evidence procedures in which expert witnesses are all sworn in to give evidence at the same time is also under consideration. The use of concurrent evidence was pioneered in Australia by NSW chief justice in common law Peter McClellan in the state's Land and Environment Court.

"The disadvantage of the conventional method of taking evidence from witnesses is their evidence is often separated by many days or even weeks," Mr James said in his paper.

He said the move away from so-called "scratch and sniff" arbitration, in which the arbitrator acted as an expert able to draw on their own experience, had started with the introduction of the Uniform Commercial Arbitration Acts. This legislation required arbitrators to give formal reasons for their decisions.

"Formal reasons accompanying the award therefore tended to become much lengthier and more complex documents than were the notes and observations which were informally issued under the previous legislation," he said.

We gratefully acknowledge the permission from Marcus Priest, The Australian Financial Review, to reprint this article.