Alternatives to Court: Arbitration and Alternative Dispute Resolution in Scotland Brandon Malone FCIArb Chairman Scottish Arbitration Centre.

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Presentation transcript:

Alternatives to Court: Arbitration and Alternative Dispute Resolution in Scotland Brandon Malone FCIArb Chairman Scottish Arbitration Centre

Arbitration and ADR Arbitration Mediation Med Arb / Arb Med Construction Adjudication Expert Determination Dispute Resolution Boards Online Dispute Resolution

Arbitration Arbitration (Scotland) Act 2010 Similar to Arbitration Act 1996 (England) Key features Open Flexible Confidential Restricted rights of challenge

Arbitration (Scotland) Act 2010 Structure The ‘Scottish Arbitration Rules’ are contained in the schedule to the Act Some rules are mandatory Some rules are default and can be amended by the parties

Scottish Arbitration Open: Any natural person can be appointed as an arbitrator No formal qualification required to be an arbitrator No restriction on nationality for arbitrator or counsel No requirement to be represented by a lawyer qualified in Scotland or elsewhere

Scottish Arbitration Flexible: Procedure is a matter for the agreement of the parties, which failing the arbitral tribunal Procedure can be as formal or informal as the subject matter of the dispute requires

Scottish Arbitration Confidential Confidentiality is written into the rules as a default provision A breach of confidentiality is actionable If a breach of confidentiality causes loss, the loss can be recovered as damages An apprehended breach can be prevented through interdict

Confidentiality in arbitration Where there is an incidental referral to the court: Proceedings are anonymised The case is referred to as ‘Arbitration Application Number [ ] of [year]’ Hearings are held in private Published decisions maintain anonymity Parties may apply for a further redaction of sensitive information or to prevent publication of the case

Scottish Arbitration Restricted rights of challenge Excess of jurisdiction Serious irregularity Legal error only if the contract is subject to Scots law parties may exclude legal error appeals by agreement

Arbitration: legal culture Generally a common law approach Adversarial Cross examination may be permitted Some civil law influence Use of written witness statements and submissions common No general duty of disclosure and discovery is limited

Use of arbitration Construction and engineering contracts Commercial leases Partnership agreements Separation agreements Government contracts Energy contracts

Scottish Arbitration The institutional picture Scottish Arbitration Centre International Centre for Energy Arbitration Arbitral Appointment Referees Family Law Arbitration Group Scotland (FLAGS)

Scottish Arbitration Centre Established to promote Scottish arbitration and Scotland as seat and venue for arbitration Founding Members Chartered Institute of Arbitrators Faculty of Advocates Law Society of Scotland RICS Scotland Scottish Government

Scottish Arbitration Centre Does not currently administer arbitrations Can make ad hoc appointments through its appointments subcommittee Works with other arbitral institutions such as ICC, ICDR and LCIA

Scottish Arbitration Centre Independent Appointments Committee Domestic and international subcommittees Committee members from around the world Including one Brazilian! - Eliana Baraldi, Head of Arbitration and Mediation at De Vivo, Whitaker e Castro Advogados, São Paulo

ICEA The International Centre for Energy Arbitration launched in 2013 Joint project between the Scottish Arbitration Centre and the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) at the University of Dundee

ICCA Edinburgh 2020 International Council for Commercial Arbitration Congress 2020 To be held in Edinburgh 10-13 May 2020 Over a 1,000 senior international arbitration professionals

CIArb London Centenary Principles Best practice for arbitral seats

Law A clear effective, modern International Arbitration law which shall recognise and respect the parties’ choice of arbitration as the method for settlement of their disputes by: (a) providing the necessary framework for facilitating fair and just resolution of disputes through the arbitration process; (b) limiting court intervention in disputes that parties have agreed to resolve by arbitration. (c) striking an appropriate balance between confidentiality and appropriate transparency, including the growing practice of greater transparency in investor state arbitration.

Judiciary An independent Judiciary, competent, efficient, with expertise in International Commercial Arbitration and respectful of the parties’ choice of arbitration as their method for settlement of their disputes.

Legal Expertise An independent competent legal profession with expertise in International Arbitration and International Dispute Resolution providing significant choice for parties who seek representation in the Courts of the Seat or in the International Arbitration proceedings conducted at the Seat.

Education An implemented commitment to the education of counsel, arbitrators, the judiciary, experts, users and students of the character and autonomy of International Arbitration and to the further development of learning in the field of arbitration.

Right of Representation A clear right for parties to be represented at arbitration by party representatives (including but not limited to legal counsel) of their choice whether from inside or outside the Seat.

Accessibility and Safety Easy accessibility to the Seat, free from unreasonable constraints on entry, work and exit for parties, witnesses, and counsel in International Arbitration, and adequate safety and protection of the participants, their documentation and information.

Facilities Functional facilities for the provision of services to International Arbitration proceedings including transcription services, hearing rooms, document handling and management services, and translation services.

Ethics Professional and other norms which embrace a diversity of legal and cultural traditions, and the developing norms of international ethical principles governing the behaviour of arbitrators and counsel.

Enforceability Adherence to international treaties and agreements governing and impacting the ready recognition and enforcement of foreign arbitration agreements, orders and awards made at the Seat in other countries.

Immunity A clear right to arbitrator immunity from civil liability for anything done or omitted to be done by the arbitrator in good faith in his or her capacity as an arbitrator

Mediation Consensual dispute resolution process Slow take up in Scotland Mainly used in family disputes Some consumer and commercial dispute resolution European Union ADR Directive may lead to increased use of mediation in consumer disputes

Mediation No equivalent of New York Convention for ADR Problems with international enforcement of mediation agreements

Integrating mediation International Centre for Energy Arbitration Report (www.energyarbitration.org) Strong support for compulsory mediation as part of the arbitration process Med-Arb and Arb-Med

Integrating mediation SIAC Rules Arbitration-Mediation-Arbitration Operates as Med-Arb but the intention is that a mediated award can be enforced under the New York Convention A New York Convention for mediation awards?

Construction Adjudication Rapid 28 day process Temporarily binding award Can be superseded by a court or arbitral award Very difficult to challenge jurisdiction and natural justice grounds only No recovery of legal expenses for successful party

Construction Adjudication Adjudication has been very popular in the construction industry Used more widely than arbitration and litigation Some dissatisfaction because of rough justice inability to recover expense challenges and temporarily binding nature

Expert Determination Best used for issues of expert opinion such as quality measurement conformity to contract Very little prospect of challenging an award Relatively fast and inexpensive

Dispute Boards Used on large scale long term projects Dispute Resolution Boards Issues recommendations which parties may or may not accept Dispute Adjudication Boards Issues awards which bind the parties until the end of the contract Award may become permanent if not challenged

Uses of technology Efficiencies achieved through document management e-discovery video conferencing Use of technology to reach settlement - blind bidding

Online Blind-bidding Standalone blind-bidding Parallel online blind-bidding integrated into a dispute process available at key stages

Brandon J Malone FRICS FCIArb WS Chairman Scottish Arbitration Centre, Edinburgh Tel: +44 131 618 8868 Email: brandon@scottisharbitrationcentre.org