This article was originally published in the December 7, 2012 issue of the Lawyers Weekly published by LexisNexis Canada Inc.

Barry Leon & John Siwiec

In this, our companion piece to “Seven tips for faster, more cost-effective arbitration” (The Lawyers Weekly, September 14, 2012, page 13) we focus on what in-house counsel who negotiate arbitration clauses or manage arbitrations can do to achieve faster, more cost effective arbitrations.

Our first article focused on procedural approaches used in international arbitration that can lead to faster and more cost-effective arbitration in Canada: an early procedural hearing; empowering and trusting the arbitrators; limiting document production; limiting oral discovery; submitting witnesses’ evidence efficiently, and agreeing on specifications for awards.

Here are seven tips to help in-house counsel realize the benefits that arbitration offers by making more informed and effective decisions both when negotiating arbitration clauses and managing an arbitration.

1. Understanding the features of arbitration

Understanding the features of arbitration and how it differs from court litigation is integral to achieving the advantages it can offer. With the growing use of arbitration, today’s in-house counsel need a basic understanding of arbitration that can be applied to negotiating arbitration clauses and managing an arbitration when a dispute arises. An understanding of arbitration should be acquired in advance, not by learning on the job.

2. Negotiating dispute resolution provisions

Because arbitration’s key feature is “party autonomy”, there is an opportunity to agree with the opposite party on almost every aspect of the arbitration. In contract negotiations, tactical advantages can be gained by taking time to consider the company’s dispute resolution objectives. Too often the dispute resolution clause is left until the eleventh hour. Consideration should be given to the types of disputes likely to arise in relation to the contract, and which dispute resolution process(es) would fit the company’s interests and objectives. If arbitration is chosen, consider the appropriate seat of arbitration, the appropriate number of arbitrators, arbitrator qualifications, the scope of confidentiality, and the use of administered arbitration.

3. Choosing arbitration counsel

The assistance of experienced and knowledgeable arbitration counsel, both when drafting an arbitration clause and for a dispute can reduce the time and costs of an arbitration. It is essential to engage outside counsel who understand arbitration and are not wedded to court rules and procedures. Outside counsel need to be open to working with the arbitral tribunal and other counsel to develop efficient procedures. Also, it should be determined beforehand whether outside counsel will have sufficient time to devote to the case.

4. Choosing the arbitral tribunal

A major benefit of arbitration is that parties have a say in the choice of their adjudicator. It begins with the arbitration clause, when the number of arbitrators and arbitrator qualifications may be fixed. The opportunity arises again when an arbitral tribunal – whether one or three arbitrators – is chosen. While tribunal selection procedures vary, in-house counsel should be involved in the opportunities available to choose the arbitrator(s).

5. Choosing procedures and timetables

In-house counsel need to stay involved and informed so that the arbitral procedures and timetables align with company priorities and objectives. Too often outside counsel are reluctant to risk “giving up rights” available under court rules and procedures when adopting arbitration procedures and timetables. In-house counsel should be present at procedural hearings to appreciate the arbitration’s dynamic, to get a feel for the tribunal, and to instruct on decisions affecting speed, cost-effectiveness, confidentiality and relationship preservation.

6. Coordinating between in-house and arbitration counsel

Once the arbitral tribunal is selected and a case timetable established, in-house counsel should coordinate with outside counsel to understand what input will be needed and when. Outside counsel need in-house counsel’s involvement when important tactical choices are being made and to ensure the availability of company personnel (as witnesses or otherwise). Coordination between in-house and outside counsel will help ensure that deadlines are met and the case proceeds as scheduled.

7. Settlement procedures

Although arbitration proceedings may have commenced, settlement procedures – negotiation or mediation – can occur at any time. Settlement is often the best outcome, saving time and saving costs. As arbitration proceedings progress, parties get a better sense of the case and the arbitral tribunal’s reactions (arbitrators live with the case throughout, unlike in court where a different judge may hear each pretrial matter), interests may change and opportunities to settle may increase. With outside counsel, in-house counsel should continually re-evaluate the case and determine whether settlement should be pursued.

The bottom line is that for a company to realize the benefits that can be achieved in arbitration, in-house counsel need to be informed and involved, starting with an understanding of arbitration, then in the negotiation of arbitration clauses, and later if a dispute arises.

There is something surreal about delivering a training workshop with the sound of the ocean in the background and the participants role-playing negotiation and mediation scenarios by the pool. As a new facilitator with the Stitt Feld Handy Group, I have had the opportunity to conduct conflict resolution workshops with Peter Dreyer in both Trinidad and Barbados. Location aside, however, I found that there were many wonderful things about our Caribbean clients that enriched my experience as a facilitator.

The participants, although keenly interested in learning about alternative dispute resolution, were also intent on enjoying themselves at the workshop. Whether it was a local expression that went over my head (but made everyone else in the room smile) or a hint of self-deprecating humour about their own cultural tendencies, there was always time for a quick laugh. These interludes were often quite helpful as they allowed the participants (and myself) to take a break from the material and come back more focused. Moreover, as a new facilitator, I was truly grateful for the relaxed environment.

The participants’ responses to questions that at first glance would appear to be relatively straightforward were also thought provoking. When asked, for example, what types of logistical arrangements would be important in a negotiation (the typical answers being things like fax machines, telephones, and seating arrangements), one participant commented that in some circumstances it might be necessary to check the parties for weapons before allowing them to enter into the room. Another participant explained the cultural importance of food to people from the Caribbean and how sharing a meal was a social activity that brought people together. A third participant responded that sometimes it is best to get away from all of our modern technological distractions in order to have a more focused one-on-one dialogue.

It was also interesting to observe how cultural issues and legislative developments influenced the participants. In Barbados, for example, a new law that would make it easier to prosecute sexual harassment cases was on the verge of coming into force when we delivered our workshop. This backdrop filtered into how the participants acted in one of our role plays that involves the sexual harassment of an employee. During this particular debrief, there was a heated debate about how the mediators felt compelled to be extra sensitive to the “victims” and how the “offenders” felt the need to continuously apologize for their behaviour, even though according to their instructions the facts were relatively benign. Other participants commented that physical contact, such as a pat on the back or an arm around the shoulder, was a part of their culture and they were concerned about the implications of the new law in this regard. It was inspiring to see the participants become so engaged in a debate about the challenges of mediating sexual harassment cases within the context of this new legislation.

Personally, I have found the opportunity to train clients from another cultural background to be both enlightening and humbling. Listening to a completely different perspective has been a wonderful way to engage myself in critically thinking about my own understanding of conflict resolution and I look forward to continuing to do so throughout my career in ADR.

Written by Nayla Mitha.

To learn conflict resolution skills that you can use at work and in your personal life, please visit our Alternative Dispute Resolution Workshop page to learn more about upcoming in-person and instructor-led online sessions.

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