Could arbitration support courts during the COVID-19 crisis?

Much has been written about the effect of the COVID-19 crisis on pending and future court proceedings across the world. There has been a wide range of responses across the globe. In some jurisdictions, courts have closed completely or almost completely. In England, by contrast, the civil courts have reacted rapidly to allow as much business to proceed as possible and to minimise disruption. New practice directions, including in particular PD 51Y (published back in March) allow for remote hearings and trials, and judges have been quick to move to the new online platforms. The first remote full trial in the Commercial Court took place in March (National Bank of Kazakhstan v The Bank of New York Mellon), and the Supreme Court has now started remote hearings. Many practitioners (and judges too, no doubt) find themselves scaling a steep learning curve, grappling with electronic bundles, negotiating the different demands and style of online advocacy, and learning to use new technologies. This is not to mention the concurrent demands of presenting submissions from a home office, with children or pets ready to intervene at any given moment. Given these new, and not altogether conducive, working conditions, it is encouraging to see that practitioners and courts have been swift to share best practice: see, for example, the Remote Courts Online hub (established by the Society for Computers and Law, funded by UK Law Tech Delivery panel, and supported by HMCTS) where practitioners and court users can share experiences and advice.

Inevitably, though, and despite the considerable effort and hard work that is going on behind the scenes, delays and disruption are occurring. In order to work effectively, courts must prioritise and triage work. For example, in the Commercial Court in London, work such as freezing injunctions and certain arbitration applications is prioritised over other less urgent work. The inevitable consequence is that less urgent applications or trials will take longer to be heard and disposed of than was previously the case. That raises the question of whether arbitral processes might be adopted to provide additional capacity, so that parties can progress their disputes within the timescale they originally contemplated.

This might be appropriate, for example, in the very early stages of a court case. Parties to such proceedings may take the view that, since their case is unlikely to be prioritised over the coming months, they would prefer to opt into arbitration in order to speed things up. Similarly, in larger construction, project or infrastructure disputes, where an entire project may be held up pending the determination of a legal issue, parties may wish to switch to speedy arbitration processes so that the project can resume as soon as possible. More generally, funders of litigation may prefer a speedy outcome, in order to minimise the time period over which their capital is committed. And, of course, delays to proceedings tend to increase the costs of such proceedings overall. So, for some parties, a switch to arbitration may be worth considering, particularly if the arbitration is seated in an established jurisdiction such as the UK, where there is a strong and supportive infrastructure, and where the curial court has (as is the case with the English Commercial Court) committed to prioritising any arbitration applications that may arise from the reference.

Such a switch would involve the parties concluding a bespoke arbitration agreement. There are several matters that must be considered before committing to such an agreement. For example, by opting for arbitration, parties will inevitably reduce their prospects of appealing from the substantive decision: the rights of appeal conferred by the CPR would be replaced by the much narrower challenge available under section 69 of the Arbitration Act 1996. That may or may not be acceptable. Where litigation is well-progressed, the parties would need to find contractual mechanisms for defining the dispute to be referred, for appointing the tribunal, and for conferring jurisdiction to deal with costs incurred prior to the commencement of the arbitration. Parties would also no doubt need to find a formula to prevent the tribunal from departing from any procedural directions made by the court at earlier case management conferences, or at least, to minimise such departure. This all points towards the need for a relatively detailed and complex arbitration agreement, which may itself take time to conclude and will almost certainly require input from the parties’ lawyers.

Some work in this area has been carried out by my colleagues in chambers, Gordon Nardell QC and Angharad Parry, and similar initiatives have been supported by arbitral institutions such as ACICA in Australia. If sufficient care is taken in the drafting of any arbitration agreement, this could be a good option for parties who wish to prioritise speedy dispute resolution during these rather trying times.

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