PWC’s 2013 corporate counsel survey has some interesting insights concerning the state of arbitration today. It is available here: Corporate Counsel Survey Regarding Arbitration
– Businesses continue to show a preference for using arbitration over litigation for transnational disputes, although concerns remain about the costs of arbitration.
– The survey confirms that arbitration is more popular in some industry sectors than others, most notably in the Energy and Construction sectors.
– While most Financial Services sector organisations prefer litigation to arbitration, the benefits of arbitration are increasingly recognized; most corporations in this industry agree, in principle, that arbitration is “well suited” to the resolution of disputes in that sector.
– Half of the respondents reported that the 2008 financial crisis did not result in a noticeable increase in international disputes for their organisations.
– Several respondents whose activities were mostly in higher growth regions (such as Africa, Asia or Latin America) reported that the crisis had had a minimal impact on their operations.
– With the continuing threat of a eurozone debt crisis, there is uncertainty over the extent to which the current financial and economic conditions may result in more international disputes.
– The two most influential factors in selecting outside counsel are previous experience of the firm/lawyer in contentious proceedings and personal knowledge of the lawyer being selected. Rankings of law firms in directories were not regarded as particularly influential.
– There is a trend towards increased involvement of in-house counsel in case management driven, in part, by a desire to better control costs.
In short, the primary users of international arbitration are well-informed about its strengths and weaknesses as compared to traditional litigation.
My personal view as a practitioner is that international arbitration is becoming weighed down by both civil law traditions (including unnecessarily lengthy briefs) and common law traditions (including excessively long hearings). While counsel show no signs of stopping this, likely because it is not in their perceived short-term self-interest , the problem of the increasing judicialization of arbitration is finally becoming recognized and there are calls within the industry for reform. Until this occurs, however, in-house counsel drafting international contracts should include a provision calling for fast-track arbitration in their arbitration agreement to streamline proceedings. A future post will provide a model fast-track arbitration clause to be considered.
– William Kirtley, Lazareff Le Bars