The influence of the digital revolution on dispute resolution provided by private institutions

Beitrag als PDF (Download)

Until recently, civil proceedings tended to be a rather analogous experience. The entire proceedings where run and handled either (i) by way of hardcopies signed with ink and delivered by physical mail or even courier services, or (ii) by way of people coming together in physical hearings to plead their case (or the case of their clients) orally. For a remarkably long period of time, digitization did not seem to have much of an impact on this old world. However, this has changed dramatically in the last couple of years. While the transformation process has happened at a fairly slow pace in state court litigation proceedings, it is happening much faster in privately organized arbitration proceedings, which allow for much more procedural flexibility. Modern technology is having an ever-growing impact on the conduct of arbitration proceedings – and the global COVID-19 pandemic has been a significant accelerator for the digitization of arbitration proceedings.
This article will briefly touch upon three major new technological developments in a typical arbitration process: (i) electronic fact finding and fact evaluation, (ii) electronic case files and submissions and (iii) remote hearings in a fully virtual environment. These new ways of working offer new opportunities, but also come with new technical and legal challenges.

Electronic fact finding and fact evaluation through forensic services
Like any other civil proceeding, arbitration is a forensic exercise: A dispute has arisen because something had gone wrong between the parties. Once the dispute has arisen, at least two (sometimes more) counterparts will likely have different perceptions of what happened. The primary task for any dispute resolution lawyer representing clients in arbitration matters is therefore fact finding and fact evaluation. This usually involves large and often complex volumes of documents and data. In the old days, fact finding and evaluation would mainly be conducted by a team of lawyers (or support staff) working their way through piles and piles of paper. At least some of the information reviewed in the course of such exercise will eventually turn out to be irrelevant to the client’s case. This means that significant time and money is spent on lawyers or client staff reviewing information which ultimately is not used. Forensic service providers and law firms alike have acted on this lack of efficiency and now use and provide smart digital solutions to review large volumes of data – at least for a first-level review. Dispute resolution lawyers and legal operations teams have learned to use and apply such tools and, to a large extent, also developed such tools or more sophisticated add-on applications. The e-mail inboxes of stakeholders, large numbers of electronic documents, etc. can be searched and filtered in order to identify what is relevant to a case. Technology is developing very quickly in that field and techniques like predictive coding sometimes come close to genuine artificial intelligence. Such technology is, however, costly and therefore usually only efficient where large numbers of documents or high amounts are disputed and at stake. The smooth implementation of such tools has been slowed down by the fact that data protection laws have become stricter in many jurisdictions and thus pose another hurdle which needs to be tackled and managed to efficiently use such services.

Electronic Case Files and Submissions
Traditionally, written submissions have been typed or printed on paper. Exhibits and other documents that usually form part of a case file would also be printed on paper, submitted and stored physically. However, this is no longer the reality of civil proceedings in the 21st century. Although documents have already been stored electronically for some time, in recent years, full electronic case files stored in dedicated databases, electronic bundling and electronic submissions have become increasingly common. Dedicated software tools now allow for the automatic and consistent citing and numbering of exhibits. Access to and searching for specific information has become incredibly straightforward. Large filings no longer require paper to be printed and signed: electronic submissions have become the new normal. This is, to a certain extent, also starting to happen in state court proceedings in some jurisdictions.

Remote Hearings
The oral hearing is usually considered the core element and is the point of culmination of contentious proceedings. The physical presence of all stakeholders involved has always been considered to be crucial. Specifically in relation to the taking of evidence through the examination of witnesses, the principle of immediacy has always been considered a key element of an oral hearing. However, in a globalized world, it is not always easy to have all relevant stakeholders physically present in each and every case and courtroom. Even in state court proceedings, video examination has been made possible in recent years. In (international) arbitration, the video examination of witnesses and experts has become common – although most practitioners would generally prefer the respective person to be physically present.

However, the global COVID-19 pandemic has completely changed the approach to oral hearings. Remote hearings, fully conducted in an online environment, have become the new normal. Surprisingly, most practitioners have concluded that remote hearings work much better than they would have expected. Dedicated service providers have contributed to this perception significantly by providing a digital experience aiming at mirroring a real courtroom scenario as closely as possible. Technical hiccups can be an issue, nonetheless. The most important legal question has not yet been answered: whether arbitral tribunals have the power to order remote hearings against the specific will of one party (or even both). Many arbitral institutions have updated their arbitration rules recently to give arbitral tribunals these powers. The international Chamber of Commerce (ICC) for example amended its provisions on the conduct of oral hearings specifically as follows: “The arbitral tribunal may decide, after consulting the parties, and on the basis of the relevant facts and circumstances of the case, that any hearing will be conducted by physical attendance or remotely by videoconference, telephone or other appropriate means of communication.” Many practitioners and scholars have published in favour of this wide discretion for arbitral tribunals. At the same time, however, state court proceedings in various countries (such as Sweden) are pending where parties to arbitration proceedings argue that a remote hearing against their express will violates their procedural rights. It will be very interesting to see how these issues will be resolved across arbitral institutions and various jurisdictions.

What’s next?
The use of modern technology has thrown up many interesting questions for the future. In the short-term, it remains to be seen how many of the developments in response to the COVID-19 pandemic are here to stay. In the medium or long term, the question of the extent to which artificial intelligence will amend or replace the human workforce seems most pertinent. Interestingly enough, to date, an increase in modern technology of any kind has not led to a decrease of contentious proceedings – to the contrary: The field is booming. And it seems that for now, the role of human beings involved is not decreasing either – it is “only” changing.

Aktuelle Beiträge