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COVID-19 Disputes: Zooming ahead - the challenges of virtual hearings in international arbitration

  • Market Insight 27 April 2020 27 April 2020
  • Asia Pacific

  • Coronavirus

The Covid-19 epidemic has brought to a head an issue that has been debated for years: how practical are virtual hearings and what needs to be done to make them work?

COVID-19 Disputes: Zooming ahead - the challenges of virtual hearings in international arbitration

The arbitration community has been talking for years about the benefits of virtual hearings.  If we use FaceTime, Skype and Zoom to speak to friends and family in distant places, why not do so for work too?  The costs savings are obvious and a great deal of time can be saved. 

For some time, the Korean Commercial Arbitration Board (KCAB) has been considering how electronic hearings should be conducted, to ensure both that the process runs smoothly and that it is fair for all concerned.  KCAB has recently published its new Seoul Protocol on the subject, which provides rules on everything from making back up arrangements (e.g. a conference telephone call) to the use of electronic bundles. 

Now Covid-19 is forcing lawyers and clients to think harder about this issue, not because there is a choice between holding a virtual or IRL (in real life) hearing, but because the alternative, for now, is no hearing at all.  The ICC in particular has just produced a detailed Guidance Note on virtual hearings, complete with annexes containing a checklist and suggested clauses for use in cyber-protocols and procedural orders.

Naturally, everyone wants their hearings to work, so that disputes are put behind them and the parties, the lawyers and the arbitrators can move onto their next priority.    Justice cannot be put on hold indefinitely, and in an economic downturn, disputes are likely to increase in number rather than the reverse.  Claimants too will be even less inclined, other things being equal, to wait for the compensation they claim.  But, is it really practical to continue as normal, simply doing everything remotely in the same way that it was previously done face to face?   The answer is probably no, but workarounds are available and can make virtual hearings more efficient than would otherwise be the case.

Technology

The obvious difficulty with virtual hearings is that the technology that is available is not always adequate to the task and not all jurisdictions and parties are equally served.  Some countries have the relative advantage in having more reliable power and being more 'connected' than others, and organisations in those countries are likely to have the best technology on the market. Major new arbitration centres like the International Arbitration Centre in London and Maxwell Chambers in Singapore are well equipped.  Expectations should not be raised too high, though.  Even the best technology nowadays has difficulty replicating an IRL hearing, where several people are in a room together and everyone is trying to gauge the reactions of others - an arbitrator's raised eyebrow, perhaps, or a witness's nervous behaviour.  

The simple task of joining together many video links may also be troublesome.  Ordinarily, participants would meet and participate in groups from suitable locations.   However, Covid-19 makes this impossible where people are practising social distancing or where a strict lockdown is in force. This can result in ten, twenty or even more video links being required, especially if interpreters are involved or the dispute involves several parties.  The technology that has been developed in recent years works best when it is bringing just one or two witnesses into a traditional style hearing by video link.  Even when it works well, witnesses may use it as an excuse, claiming they cannot hear questions that they are reluctant to answer.

There is also a real and significant imbalance in the technology available to parties operating in and out of certain jurisdictions.  Parties participating in virtual hearings from locations with reliable power and good connectivity are likely to find the process relatively seamless.  Those without such access are likely to find effective participation more difficult.  Given that one of the major benefits of international arbitration is that it offers a consistently high standard of dispute resolution throughout the world, it is important that the interests of parties based in developing countries are not left behind in the rush to adopt technologies that are not universally accessible or reliable.  Access to justice should not be dependent on access to high quality technology.

It is important not to forget that in this period of epidemic induced multi-jurisdictional lockdowns and the technological dependency by which it has been accompanied, technology deficits affect not only hearings, but also the preparation of a case. Communications with clients, witnesses and colleagues are disrupted as is access to paper records and documents.  Witnesses may be based in countries or regions where telephone lines work badly and where the internet is not strong enough to support a video link.  In fact, there may be no internet at all.  Witnesses, who are also in lockdown, may not have access to the case record and communications about documents, whether by phone or video link, is very difficult.  So lawyers will sometimes find it easy to prepare a case remotely, and sometimes they will not.  Everything depends on the context in which they are working.

Teamwork

Another challenge posed by video hearings is that they limit the ability of lawyers to work closely together as a team.  In a normal hearing, collaboration is the key to success.  Everyone from the lead advocate to the trainee who created the bundles needs to be alert and working in harmony.  Lead advocates ask members of the team to answer questions or find documents.  Lawyers listen carefully to witness testimony and sometimes recognise that an answer does not accord with a document they have seen.  In a virtual world the opportunity to pass a key document to the lead advocate for use in cross examination may simply not exist.  Winning is ultimately a team effort.

That said, there are ways of communicating outside the main video links that have been set up.  Team members can send private messages to each other or even use the virtual break out rooms that are available from some providers.  There is inevitably a loss of flexibility in these arrangements, which can never replicate real time communication between team members in a hearing, while concerns regarding confidentiality and reliability have not yet been conclusively resolved.

Making it work

In a way, none of this matters.  Some hearings can be postponed indefinitely or abandoned in favour of written submissions, but where the parties agree that time is paramount, hearings will go ahead regardless.  Lawyers therefore have no choice but to be flexible and adopt new ways of working, whether they consider them to be satisfactory or not.

The guidance provided by the Seoul Protocol and ICC's new Guidance Note on Covid matters will help, as will parties and arbitrators who are willing to embrace new technology.  In addition, certain pre-hearing reviews to establish readiness for the hearing can be geared towards technological preparedness and ensuring equality between the parties.

However, it is equally important to manage expectations carefully.  Virtual meetings and hearings are bound to be less efficient than traditional ones, whatever the advantages of new technology and procedures.  The challenge is to make the most of the latter, while limiting the downside of remote working.  What will be interesting to see is whether new ways of doing things will remain in place in the longer term, after the pandemic is over.    The next few months may establish a new normal; the question of whether this happens will depend on whether the technology delivers.

Written by Legal Director Richard Butt and Associates Francesca Fraser and James Newton.

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