The move during 2020 to virtual hearings as a result of the pandemic has meant that parties, lawyers and arbitrators have had to quickly adapt to a new environment and a different way of operating; and while various guides have been issued by arbitral institutions and other organisations about how virtual hearings should operate, there has been no definitive ruling from the courts or amendment to statute yet which prescribes this. It has been necessary therefore to apply general principles to the new practice.
General principles in arbitration
The general principles are set out in various statutes and rules. The English Arbitration Act 1996 perhaps states these most clearly. To begin with, the Act specifies that “the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense” (section 1(a)). It also explains that the duty of an arbitrator is to “act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent”, and to “adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined” (section 33(1). Finally, it mandates that parties to an arbitration “shall do all things necessary for the proper and expeditious conduct of the arbitral proceedings” (section 40(1)).
Similar duties are also found elsewhere, although typically not in such detail, for example in the UNCITRAL Model Law, the UNCITRAL Rules, the ICC Rules and the LCIA Rules. These are then translated via procedural orders into specific requirements for hearings. But what should tribunals include in those orders, and what should parties be asking for?
Perhaps the first thing for the arbitrators to focus on is ensuring that the parties have confidence in the system. This encompasses not only cybersecurity, but also making sure that everyone is comfortable with the virtual environment. Can all the parties access the platform? Will there be any obstacles, such as the stability of the power supply in the relevant locations? What about anything that might be happening offscreen – for example, is a witness being coached by someone hidden from the camera?
There is a limit of course to what arbitrators can do by themselves – it would be unreasonable to make them solely responsible for cybersecurity, for example – and they must also remain mindful of the need to avoid unnecessary delay and expense. But they will need to take sensible steps to ensure the integrity of the process and to give each party a reasonable opportunity of presenting their case.
Beyond this, they will also need to think about how there can be a level playing field for the parties in the particular circumstances of a virtual hearing. This is where comparisons between an in-person hearing and a virtual hearing may break down. One can easily draw a parallel between keeping a door to a hearing-room closed and limiting access to an online platform. A virtual environment, however, presents its own characteristics and challenges that cannot be compared to features of a physical hearing.
For example, in international arbitration there are typically participants from different parts of the globe. When they are all assembled in one place at a physical hearing they will be operating by the same clock, meaning they start and finish the day at the same time, they take meals at the same time and they sleep at the same time. However, when the participants join a virtual platform, it is most likely that they will not have adjusted their daily schedules to synchronize with each other. Their chronobiology will be at different settings and this may have an impact on the hearing. A person joining a hearing in the middle of their night is likely to have a different level of concentration compared to a person joining in their afternoon. The arbitrators may need to adjust the hearing schedule to take this into account.
In addition to making clear to the arbitrators any constraints that they are operating under, the parties might ask the arbitrators to confirm that they have proper connection and that they understand how to operate the system. The particular advantage of an in-person hearing for the parties is that they can be face-to-face with the arbitrators. This gives the arbitration legitimacy. The parties know that the arbitrators are real people, and that the arbitrators have listened to the argument, because they can see the arbitrators in person, at work. They can watch them taking notes, they can see when their attention wanders.
In a virtual environment, this awareness of the presence of the arbitrators is lacking. All that the parties see is the arbitrators’ faces on the screen. They only know that the arbitrators have placed themselves in front of the camera, they do not know for sure what the arbitrators are looking at. They do not know what the quality of the picture on the screen is. Nor do they know if the arbitrators have failed to adjust the volume, with the result that the arbitrators can barely hear what is said.
Advocates may find it difficult to tailor their presentations when all that they are speaking to is a screen and their voices are being filtered through technology. The parties’ perception of what is being said may not equate to what is being understood by the arbitrators. The parties may need to ensure that they are properly being heard.
We do not yet know what arbitration will look like after the pandemic has passed. There is a good chance, however, that virtual hearings will remain, particularly for lower-value cases and for short hearings. There is an equally good chance that the technology for virtual hearings will develop.
It is possible some day that virtual reality may be used in such hearings. It is also possible that increasingly sophisticated analytical software might be employed by the parties, studying every reaction of the arbitrators; while on the arbitrators’ side, speech recognition software might merge comments from the arbitrators with extracts from oral and written submissions in order to produce automated drafts of awards.
We may need then to rethink what arbitration is and how it should be regulated so that the general principles continue to hold sway. For now, we need to be comfortable with this new environment, and ensure that arbitration continues to operate properly.
Please join the Fox Williams webinar on “The psychology of virtual hearings” on 1 December 2020. For more details see here.