Quarterly Update Arbitration & Litigation 02/2021
UK & Europe
Witness Testimony in International Arbitration
Witness evidence in international arbitration can be used to fill gaps in in the paper trail, to support or explain existing documents or simply to “set the scene” (i.e. provide background). The overall objective being that the tribunal gains some added insight to the facts of the case relevant for its deliberations and ultimate decision. Today, international arbitrations rarely come without witness testimony.
In contrast, civil law jurisdictions tend to give greater value to documentary evidence. Moreover, in many civil law jurisdictions, statements of a party to the proceedings (including its directors, managers) are not treated, without preconditions, as evidence as such (e.g. sec. 445 German Code of Civil Procedure, CCP). On the other hand, submitting witness testimony of a party, its directors, employees etc. is not only admissible but common in international arbitration.
It is also good practice in international arbitration that counsel interviews witnesses and assists in the preparation of the written statements to provide clear and concise testimony. Counsel who are not prohibited from the coaching of witnesses for the hearing (e.g. in the US) often go to great length to prepare the witness for his or her day in court. English solicitors are, on the other hand restricted to familiarising the witness with the arbitral process (familiarisation v. coaching). In civil law jurisdictions like Germany, the rules are less clear, safe that counsel may not purposively ask the witness to mislead the tribunal or court (Criminal liability). The lack of professional conduct rules in civil law jurisdictions relating to the interactions with witnesses is not surprising, given the preponderance of documentary evidence in civil procedure.
Considering the close interaction between counsel and witnesses in international arbitration and the possibility to submit witness statements of the parties to proceedings, witness evidence has in recent years been criticised as unreliable, polished by counsel and rarely relied upon by tribunals in their awards. Against this background, the ICC-Report sets out its findings and recommendations regarding the use of witness evidence in international arbitration.
ICC Report – The Accuracy of Fact Witness Memory and International Arbitration
The ICC-Report specifically looks at unintentional distortions and inaccuracies as opposed to deliberate efforts to mislead. To begin with, the ICC report makes clear, that although human memory is in invariably imperfect, it does not mean that it is not valuable or even at times vital to the arbitral process.
The main distorting factor identified by the report is, principally, the exposure of a witness to Post Event Information (PEI). Such PEI can be anything from reviewing new documents or press reports to talking to colleagues, counsel or co-witnesses. The ICC report quotes existing psychological research which states that such “misinformation doesn't just alter details in our memory, it can add information to memory that was never there in the first place” (ICC-Report, section 2.5). This is particularly critical in international arbitration as there is often more than one witness testifying on the same or overlapping events. Exchanges between witnesses can easily lead to “memory conformity” effects. Studies suggest, as referenced in the ICC Report, that exposure to PEI can even overwrite existing factual memory. Also, when recalling past events, these recollections can be heavily biased by the perspective taken by the witness after those events, for example, in his or her employment for claimant or respondent. This perspective is “encoded” in the recollections. These biased recollections can even be intensified by putting questions to the witness with qualifying descriptors - “Do you frequently eat chocolate”.
In order to determine whether these existing psychological findings (derived primarily from studies relating to criminal cases) equally apply in a commercial setting, the ICC Commission asked the psychologist Dr Kimberley Wade (University of Warwick) to conduct a witness memory experiment. The experiment showed that also in a commercial context, witness memory is as susceptible to similar distortions and influences as in the criminal context.
The report concludes, however, that simply reducing these distortions (i.e. interactions) with a witness may not be feasible, as these interactions are often necessary to discover the full facts of the case and efficiently prepare hearings. Besides the recollection of events, factual witness statements in international arbitration also serve the purpose of providing context, explain technical issues and/or documentary evidence. The ICC Task Force therefore opted for differentiated recommendations in which it proposed various possible steps to “preserve witness memory” and “reduce distortions”. The recommendations are structured as follows:
In-house counsel are encouraged to establish procedures – within their department but also more generally within the company - for keeping contemporaneous written notes of events as they unfold. When it comes to an arbitration, in-house counsel should point out the importance of the witnesses’ own recollection before bringing them into contact with external counsel. Witnesses should be interviewed one-by-one and not in a group. Setting-out a party line or trial strategy to the prospective witnesses should be avoided, discourage witnesses from discussing “endlessly” with other witnesses. The ICC-Report recommends preserving potential witness evidence early on, possibly even before it comes to a dispute, e.g. in complex construction projects.
Witness evidence should be collected as early as possible to avoid the loss of memory. At the outset of the witness interview, counsel should remind the witness that it is normal to have forgotten details and to differentiate between their own recollections and what they may have heard from others. It should also be made clear, that whatever the witness says in the interview, does not have any personal consequences.
During the interview, counsel should ask unbiased (and open) questions, that allow the witness to elaborate without any sense of direction. Counsel should avoid giving feedback to answers and if possible, avoid showing post event sources or documents. At the end of the interview, counsel should advise the witness not to discuss their testimony with co-witnesses or colleagues.
Assessing Information Provided by the Witness
Counsel should be mindful of the time that has lapsed between the actual events and time of the witness interview and test the accuracy of the statements by cross-checking with other witnesses or documentary evidence. When assessing the information, preceding discussions of that witness with in-house counsel, co-witnesses or other colleagues should be considered (misinformation and memory conformity effect). The position of the witness and his or her responsibilities within the company should also be factored in (Stake in the evidence).
Preparation of the Witness Statement
It is recommended to provide written questions either before or after the interview to allow the witness to answer on their own terms. Giving the witness an opportunity to prepare their own drafts, if capable, considering language and drafting skills. Numerous discussions and drafts/revisions of the witness statement should be avoided. When drafting or polishing the written statement, counsel should preserve the witnesses own “own voice”. The witness should be discouraged from reading other witness statements.
Preparation for the Hearing
Counsel should carefully consider in how far witness preparation is permitted or indeed prohibited under the applicable professional conduct rules or the rules independently agreed or set in procedural orders. The ICC report also refers to the guidelines described above for the witness interview when conducting witness preparation for the hearing.
Identifying Distorting factors and Weighing Testimony
The ICC-Report encourages all players to educate themselves to better understand the distorting factors on human memory, for example, such as the ‘misinformation effect’ or ‘memory conformity’. Moreover, especially external counsel should train to conduct cognitive interviews (e.g. reinstating the witness mentally in past events, encourage active participation etc.). Training and education are also crucial to reduce wrong perceptions of witness memory.
In practice, distorting effects can particularly arise when witnesses are interviewed in the presence of in-house counsel, superior managers or other witnesses. This can tempt the witness to try to fill gaps to seemingly “help” their company and employer, by providing the best possible witness testimony. From a practitioner’s point of view, it is essential to point out that filling gaps (even unconsciously) often leads to inconsistencies in witness statements which are then brought to light in a thorough cross-examination. Providing an honest testimony is the best assistance to external counsel and the in-house department. Ideally, witnesses can review and refer to their written contemporaneous notes, emails or memos to minimise distortions and allow counsel also too assess the veracity of the information provided. Caution should also be exercised when providing fact witnesses with the parties’ submissions or excerpts of those submissions. In practice, witnesses often want to know what their company is arguing in the case and get into the details. The exposure to this information should be kept to a minimum.
It is equally important to interview witnesses with an open mind and conscious of the potentially distorting factors. Witness interviews should be conducted by experienced attorneys and not “outsourced” to junior associates, who may be eager to obtain “advantageous statements”.
Providing written questions before the interview has proven helpful in practice, allowing the witness to answer the question on their own terms. Especially in complex technical arbitrations it is not always possible, as recommended by the ICC-Report, to avoid showing the witness documents or indeed to liaise with co-witnesses. Overly polished written statements and overly prepared witnesses, where permitted, often harm the credibility of the witness. In practice, it is important to convey to “keen witnesses” that they should only provide their recollections and not attempt to help their employer by filling gaps and reading up on past events.
The ICC-Report provides welcome guidance and encourages all stakeholders to educate themselves about distorting factors and witness memory more generally. Distorting factors harm the arbitral process and it is in everyone’s interest to preserve witness testimony and minimise distortions. The ICC-Report has also addressed common misperceptions about witness memory, which nicely illustrate the need for education and training. I leave you with FN 24 of the ICC-Report:
“‘[…] research suggests that witnesses who include a high volume of peripheral detail in their memory reports are perceived as more credible than witnesses who provide few peripheral details (e.g. Wells, Leippe, 1981). […] Of course, such trivial and peripheral detail in a witness’ testimony tells us little about how accurate their accounts really are. But this trivial information is persuasive, and we all have a tendency to think ‘people who recall trivial details have a really good memory’. Training would help all participants have a better appreciation of their own biases and perceptions with respect to a witness’ memory.” [Emphasis added]
 Stricter standards apply for solicitors in criminal proceedings R v Momodou  EWCA Crim 177,  1 WLR 3442,  2 Cr App R 6. Caution must nevertheless also be applied in civil proceedings, see Ultraframe (UK (Ltd v Fielding  EWHC 1638 (Ch).