Picturing Arbitration Of The Future

This year’s annual Helsinki International Arbitration Day (HIAD 2018), took place in the Finnish capital on 24 May. The event was organized by the Finland Arbitration Institute (FAI) and brought together approximately 200 dispute resolution specialists to discuss technology, legal design and the future of international arbitration.

One of the speakers, Michael McIlwrath, Global Chairman of the Global Pound Conference, offered some predictions on how the world of arbitration is likely to change in the next five, 10 and 25 years. In particular, he highlighted the profile of the next generation of arbitrators and the huge changes that have taken place since the beginning of his own career.

Due to the specialist education available today, unlike their predecessors, law students now have the opportunity to be highly informed about dispute resolution at the start of their careers. In addition, the international element of dispute resolution is a big draw for young law students who are multilingual or willing to work/study abroad, and McIlwrath noted that this will become a common characteristic of future international disputes specialists.

Organisations such as YIAG, Young ICCA, YAF, YAWP, and the Young Mediators already show the growing network of young disputes professionals, as well as events such as the Consensual Dispute Resolution Competition and the VIS Moot. This, as McIlwrath explained, will allow them to have “more flexibility in their approach due to their awareness of different dispute resolution options”, but also to be “highly networked” with each other on a global level.

McIlwrath also pointed out that young lawyers are not afraid of new technology, “on the contrary they will adopt anything that makes it easier and quicker to resolve conflict.” However, this may also have negative drawbacks, making them impatient and likely to “expect fast outcomes,” he warned.

Role of institutions

Another area that is likely to change is the role of institutions in the coming years. Over the next five years, McIlwrath sees institutions continuing to introduce tools to make arbitration cost-effective for these lower value/less complex disputes. “They will do this because it is necessary to retain market share. If users do not see an institution in the smaller cases – of which there are many – they will not consider you for the bigger ones.” In addition, he said, the shift towards more consensual dispute resolution will continue. “While there will still be fewer mediations than arbitrations, institutions will need to offer both services in order to avoid losing market share to other, full-service providers.”

To meet this vast demand of cases in the lower-end segment, institutions will introduce different forms of automation, including Online Dispute Resolution. The reason these tools will be adopted is not because they are better than traditional, non-automated procedures, “but because they will make the difference between resolving certain conflicts via an agreed procedure, or not resolving them at all”.

According to McIlwrath, over the next five years we will also see a “sacrifice of some degree of party autonomy in favor of more efficiency.” This is already being introduced by some institutions, for example, the International Chamber of Commerce adopted a new rule last year, to only have a sole arbitrator for disputes under 2 Million USD. McIlwrath believes that users will ultimately embrace this idea because they are “more interested in outcomes than process”.

He also sees a significant change in the demand for transparency, stating that “institutions will begin to cede to pressure from users for information about arbitrators, including their soft skills and speed of case management.” These developments are also likely to impact users’ expectations of the quality, diversity and competency of arbitrators as well as their selection process.

The McIlwarth paints a picture of a more diverse, multicultural, global network of future disputes lawyers, who take a more flexible approach to the processes they use to resolve their cases and are focused on problem and time/cost efficiency than the generations before them. With institutions taking on a more proactive role and technological advances encroaching on the way the sector operates, it looks like it will be an interesting journey.

Written by Ruxandra Gheorghe and Natasha Mellersh.