REUTERS | Ajay Verma

A new direction for witness evidence in arbitration?

Much ink has already been spilled on the witness evidence reformswhich came into effect in April 2021 and will have a far-reaching effect on how witness evidence is approached in litigation in the English Commercial Court. Judicial concern about the inappropriate use of witness statements in court proceedings has led to the new Practice Direction (PD) 57AC and Appendix that now apply (with some limited exceptions) to trial witness statements in the Business and Property Courts. The new PD includes important compliance measures which aim to ensure that witnesses and their lawyers focus squarely on the new requirements. Under the new regime, the witness statement must now come with a certificate of compliance in which the lawyer confirms the witness has been told about the rules and that the witness statement complies with the PD and the Statement of Best Practice contained in the Appendix. The witness must also provide a statement of compliance.

Much of what is required by the new rules is good practice already familiar to arbitration lawyers, including the use of open questioning, before following up with closed questions for clarification and additional details. It is already widely understood that it is important to avoid leading questions on important contested issues and to keep a full and accurate contemporary note of the witness interview. The need to limit the number of drafts as far as possible will not be news to arbitration lawyers and it is not too surprising to see that the witness is now asked to confirm that the witness statement is in their own words, or that the statement must only include matters of which the witness has personal knowledge.

However, the provision that has probably proved most contentious is the requirement to identify the documents a witness has seen in the process of preparation of the statement, though there is the safeguard that privileged documents can be identified by category or general description, rather than being listed out individually. On “important disputed matters of fact”, every witness statement must expressly set out the strength of the witness’ recollection and the extent to which this was refreshed by sight of the documents, which will be a new departure for trial witness statements in the English Business and Property Courts.

Those involved in English-seated arbitration will need to be aware of these changes. They will apply to most court applications made in relation to arbitration (although not applications for interim relief). But do these reforms have any wider ramifications for arbitration practitioners, whether English or otherwise?

At first sight, all this might not seem to have much to do with witness statements prepared for use in arbitral proceedings. It is certainly clear that the reforms in the English courts are not directly applicable in English-seated arbitration, given the provision in section 34 of the English Arbitration Act 1996, which means that the tribunal may decide all procedural and evidential matters (section 34(1)) and also decide whether to apply strict rules of evidence (section 34(2)(f)). This said, there are very good reasons why those involved in international arbitration cases cannot afford to ignore the witness evidence debate and the way it has been resolved for English court proceedings.

Importantly, in the last few years, there has been an increasing focus on the preparation of witness evidence in international arbitration and a perception that the process is not always being conducted efficiently, or in a way that maximises the evidential value of the witness statement to the tribunal. These frustrations were reflected in the drafting of the Prague Rules, which included significant changes to the standard approach to witness evidence. While witness statements will still be used in a Prague Rules arbitration, that evidence will be tested by the tribunal itself at the hearing, consistent with the inquisitorial approach mandated by the Rules. The responses to the ICC Task Force Maximising the Probative Value of Witness Evidence questionnaire on fact witness memory in international arbitration have shown that many arbitrators and counsel remain frustrated by the way that witness statements are currently used. Common criticisms included inappropriate use of witness statements to argue a party’s case, the inclusion of irrelevant material on the background of the witness concerned and excessive repetition of the documentary evidence. It was clear that many arbitrators were in favour of a shift to narrower and better focused use of witness evidence in international arbitration.

At the same time, there has been growing awareness in the arbitration community of the impact of the evidence-taking process itself on witness recollection. The ICC Report on The Accuracy of Fact Witness Memory in International Arbitration launched earlier this year has enhanced awareness of how witness evidence in arbitration can potentially be altered by the process of taking a witness statement. While it has long been understood that human memory is not infallible, the ICC Report sets out some of the scientific evidence around how the process of giving evidence in arbitration cases could itself potentially distort witness memory. Memory impacts were examined by the Task Force in the arbitration-specific context, by the use of a witness memory experiment based on a commercial arbitration case study. The Task Force ultimately concluded that memory distortion can indeed impact the reliability of evidence given in international arbitration.

Having recognised the significance of the issue, the ICC Report sets out at Section V a long menu of potential measures which witnesses, in-house counsel, external counsel and tribunals can consider in appropriate cases to attempt to minimise evidence distortion. There are a number of important points here for external counsel to be aware of, covering how to conduct interviews, how to assess the information relayed by the witness, preparing the witness statement and preparing the witness for the hearing. In some (though not all) respects these measures align with the new requirements for taking witness statements in English court litigation, including:

  • Avoiding numerous drafts.
  • Using open-ended questions rather than leading questions.
  • Allowing the witness to tell their story before conducting more in-depth questioning.
  • Stating that the witness has relied on the documents for recollection where that is the case.
  • Keeping an accurate record of interviews and providing witness confirmation of how the statement has been prepared.

The ICC Report also goes further than the English PD in offering specific guidance to in-house counsel  to help them maximise the value of witness evidence, noting that they “are often the ‘first responders’ on the scene when a dispute arises” (section 5.5 of the ICC Report). Potential steps listed include:

  • Ensuring a good contemporaneous paper trail.
  • Emphasising to witnesses that it is vital their own recollection be presented to external counsel.
  • Avoiding meeting with likely witnesses in groups.
  • Ensuring witness interviews are only attended by those needed to conduct the interview effectively.

In addition, the ICC Report contains some potential steps for a tribunal to consider, although the ICC Report is very clear that it is not suggested these steps should become routine in every arbitration. These include noting that counsel may wish to seek guidance on interactions between party counsel and witnesses, requiring that each witness statement state how it was prepared (particularly if not in the witness’s first language) and the extent to which a witness has talked to other witnesses about their evidence. The ICC Report notes that counsel may choose to include this information even where not required with the aim of “enhancing the reliability” of the statement in the eyes of the tribunal. Arbitrators are reminded that they can give instructions to witnesses prior to examination at the hearing, explaining that it is important to distinguish between personal knowledge and other (later) knowledge, and that where a witness doesn’t know an answer they should say so. It is also pointed out that tribunals can order that witnesses should not enter the hearing room until they have given evidence.

As “best practice” tends to cross-pollinate between the different practice areas, it is not unreasonable to expect that some aspects of the English witness evidence reforms for court proceedings could permeate through to arbitration in English-seated cases, particularly where there are English-qualified counsel or arbitrators. For those involved in arbitrations seated elsewhere and where the tribunal and counsel have no connection with England, it is unlikely that these English reforms will have any particular relevance or application. However, as shown by the ICC Report, the recent English reforms do form part of a wider global focus on the preparation of witness evidence. It therefore seems likely that the international arbitration community will move towards more conscious practice in relation to witness evidence, leading to adoption of similar changes to those proposed in the English courts. Streamlining witness statements has the potential to generate cost and time efficiencies and the ICC Report offers many steps that could be taken in this regard. It remains to be seen how proactive tribunals will be willing to be and whether, and to what extent, the individual measures listed in the ICC Report will come to be adopted routinely in international arbitration.

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