The influence of common law and civil law systems has left international arbitration tribunals divided in their procedures for managing expert witness evidence. While arbitration tribunals based in Europe tend to allocate the tribunal primary responsibility for appointing and managing expert evidence, arbitration tribunals in common law jurisdictions readily allow parties to appoint their own expert witnesses.

This article covers the most salient points of the debate over issues of the efficiency, flexibility, and fairness of expert evidence in international arbitrations that this divergence in procedures has provoked. We consider the merits and disadvantages of relying on party-appointed experts and tribunal-appointed experts in arbitrations before discussing the novel approaches of Australian courts that have and continue to shape the management of expert witnesses in arbitration tribunals globally.

Party-appointed experts

Advantages

Many arbitrators today associate the right to party-appointed experts with the right to be heard. Parties who engage their own expert witnesses can exercise more control over the presentation and contents of expert evidence, which often plays a key role in articulating the materiality of primary evidence and scope of a party’s claim. In the proceedings of international arbitration tribunals which are specially set up to cater to the peculiarities of disputes and viable remedies, the ability of strong expert evidence to identify and validate fine distinctions of fact is even more valuable than in adversarial courts. Furthermore, the ready availability of cross-examination procedures in arbitration tribunals that allow party-appointed expert witnesses acts as a safeguard against expert witness bias and gives further credence to the idea that the use of party-appointed experts facilitates parties’ right of reply.

The results of several major surveys conducted by international law firms and universities confirm the perception amongst legal practitioners and academics that arbitrators should be entitled to appoint and rely on their own experts. For example, 84% of respondents to the Bryan Cave Leighton Paisner’s ‘Annual Arbitration Survey 2021’ agreed that arbitrators should be entitled to rely on party-appointed experts as part of a basic right to present a case, while 74% considered it ethical for experts to have dual roles as party-appointed expert and expert advisor at an early stage of proceedings.[1] The unwillingness of arbitrators to forgo appointing their own expert witnesses for the sake of cheaper or faster proceedings[2] further affirms the authority that party-appointed expert evidence now carries in international arbitrations.

Disadvantages

The main disadvantages of party-appointed experts relate to issues of bias and efficiency.

A routinely raised concern is the impact of an expert’s contractual engagement by a party to the proceedings on the objectivity of their evidence. The implicit quid pro quo rationale of experts’ contractual engagements with lawyers may influence them to ‘honour’ the agreement by providing only opinions favourable to the instructing party’s case. Even where experts are not engaged to aggressively defend a case as a ‘hired gun’, the natural inclination to foster a continuing business relationship when entering a contract may ultimately have a bearing on the expert’s willingness to be completely transparent in a report. The resulting inaccuracy could seriously hamper a tribunal’s ability to provide a fair determination.

Another major issue affecting the reliance on party-appointed expert evidence is the capacity for divergent methods and data in expert evidence to create a ‘ships in the night’ scenario. Since party-appointed experts confer separately with their instructing lawyers on the material evidence and key issues in fact, experts often advance completely incomparable data and analytical approaches. Subsequent attempts by tribunals to narrow the scope of issues and reach consensus on material evidence often adds significantly to the length and cost of proceedings.

Tribunal-appointed experts

Advantages

There are two main advantages of using a tribunal-appointed experts. The first is the apparent benefit of a tribunal-appointed expert to the fairness of proceedings. Tribunal-appointed experts may appear to possess a greater capacity to remain impartial in their opinions in the absence of a contractual relationship and less contact with lawyers on either side of the dispute. In addition, their appointment by the tribunal directly supports a duty to the decision-makers that encourages an undivided focus on delivering fair and efficient outcomes.

Tribunal-appointed experts also sidestep ‘ships in the night’ scenarios. By directly managing the engagement of experts and the production of report and testimony, tribunals streamline primary evidence and data as well as establish a single analytical approach to primary evidence. The cost-saving effects of appointing expert witnesses through a tribunal, especially in the context of the complex nexuses of facts and data common to international arbitrations, are therefore significant.

The Rules on the Efficient Conduct of International Arbitration (or ‘Prague Rules’), arbitration guidelines created by a working group of civil law lawyers from Europe, have proposed modifications to arbitration practices set out in the IBA rules, and with them an alternative approach to expert evidence. In line with civil law conventions, the Rules allocate the tribunal the primary responsibility of appointing experts and managing their evidence, but also permit parties to advance their own expert evidence in addition.

Disadvantages

There are several significant disadvantages to the use of tribunal-appointed experts. The most serious concerns the limitation that reliance on tribunal-appointed experts places on parties’ abilities to advance their cases autonomously and persuasively. The consolidation of assumptions and analysis by a single expert denies parties the opportunity to oversee the presentation of expert evidence, hence restricting their capacity to articulate the strongest version of their cases. This rigidity detracts from the appeal of international arbitration as an especially flexible and efficient conflict resolution alternative that adapts procedures to the bespoke needs of the dispute.[3] Parties unsatisfied with the tribunal-appointed expert’s evidence often subsequently appoint their own expert witnesses, further adding to the duration and cost of proceedings.

Another major concern is the impact of reliance on the approach and opinions of a single tribunal-appointed expert on the fairness of determinations. Without having to address substantial opposing opinions about the facts in issue, expert evidence in proceedings that use tribunal-appointed witnesses may turn out less reliable or rigorous than in proceedings with multiple party-appointed expert witnesses. The tribunal’s indiscriminate privileging of a single authority on the facts in issue moreover discourages vigilance about bias that may influence the expert’s opinion even in the absence of any contractual agreement with the parties.

Arbitrators have recognised the unique challenge of overcoming substantively compromised evidence in proceedings with tribunal-appointed experts and stressed the reversion to cross-examination and party-appointed expert systems as the only viable means of ensuring higher standards of impartiality and fairness in expert evidence.

Adoption of ‘hot-tubbing’ – increasing popularity of the Australian invention in international tribunals

In the spirit of more efficient and less formalised dispute resolution procedures, international arbitration tribunals have increasingly adopted ‘expert witness conferencing’ (known in Australia as ‘concurrent evidence’ or ‘hot-tubbing’) in cases where parties offer multiple conflicting expert witness opinions.

Witness conferencing requires experts to discuss with their expert peers, parties, counsel and tribunal members, in a collegial or cooperative manner, points of and justifications for disagreement in expert testimony. The process differs from cross-examination in its invitation to experts to respond more directly and freely to questions and issues raised by other fact finders and lawyers, and in its specific aims of assisting understanding of the discrepancies between expert opinions and attempting to resolve them.

The opportunity for experts to dispute and explain areas of disagreement in evidence is said to improve the efficiency and fairness of arbitration proceedings in several ways:

• The forum-like style of discussion allows experts to address directly complexities and confusion about the evidence, expediting the progress of the tribunal’s and parties’ technical comprehension of key issues;
• The cooperative aims of discussion discourages gratuitously combative responses (as might occur in cross-examination), facilitating more concise and therefore shorter examinations of expert opinions;
• The direct comparison of opinions and approaches in the presence of experts allows for a more rigorous appraisal of the coherence of opinions than in cross-examination; and
• The detailed consideration of experts’ reasoning demands that experts prove their impartiality or lack of bias.

 

Although the procedure is used widely in Australian courts, where concurrent evidence was pioneered, the ability to rely on the added input and assistance of experts when appraising expert evidence is especially advantageous in international arbitrations where the issues of fact tend to be particularly technical and complex. The efficacy of this deviation from linear cross-examination procedures moreover speaks to the benefits of tailored flexibility sought after by arbitrators in arbitration tribunals.

As an additional guarantee of efficiency, Australian courts usually require experts to participate in a ‘conclave’ in which they collectively discuss away from the court their key disagreements before producing a joint report.

The established acceptance of concurrent evidence in international arbitration tribunals is reflected in the Chartered Institute of Arbitrators’ publication of ‘Guidelines for Witness Conferencing in International Arbitration’ (April 2019)), which endorses the use of witness conferencing in arbitrations with conflicting evidence or issues of witness credibility. Some have even commented on the prevalence of an ‘if not, why not’ approach to concurrent evidence, which presumes the necessity of witness conferencing in all multiple expert arbitrations and requires the initiative of parties to challenge that necessity when they wish to opt out of the process.

How Australian practices may continue to guide expert evidence procedures in international arbitration

Many arbitrators have signposted the need for more interventionist strategies to limit ‘ships passing in the night’ scenarios. Although the misalignments of reports on key issues, assumptions and evidentiary materials often lead to significant delays and accruals of costs in arbitration, few practice rules have been instated to encourage specifically pre-trial management of expert evidence in international dispute resolution proceedings.

Some Australian courts however have explicitly begun to implement pre-trial procedures for the effective management of expert evidence in areas of law frequently involving technical and complex expert evidence. For instance, the Land Court of Queensland in its Expert Evidence Practice Direction now allows judicial officers to direct cases to Court Managed Expert Evidence (‘CMEE’) conferences. These pre-trial meetings with a judicial member of the court (a ‘CMEE Convenor’) require parties to identify and agree on the issues in dispute and the area(s) of expertise required to address them. The outcome of a CMEE Conference is a consolidated brief to experts which includes common dispute details and assumptions. CMEE Convenors are also empowered to hold additional conferences with experts and parties to agree on further instructions and time extensions to produce reports.

The framework and aims of CMEE are almost directly transferrable to the problems and aspirations of expert evidence management in international arbitration. As in many arbitrations involving multiple expert witnesses, cases in the Land Court of Queensland frequently suffer delays caused by the incomparability of wildly diverging forms and contents of evidence. CMEE’s aim to ensure “meaningful communication and further instruction (without inappropriate influence)”[4] closely mirrors the aim of tribunals to practice flexible dispute resolution procedures without enforcing a formal approach. Finally, CMEE’s procedures and insistence on continuing open communication between the determining body and parties resemble the tenets of ‘proactive case management’ put forward by Independent International Arbitrator Doug Jones AO.[5]

Champion of CMEE, President of the Land Court of Queensland Fleur Kingham, has signposted that the CMEE will be evaluated by ADR academics after it has run for a few years.[6] If the model is successful, it could provide valuable suggestions for the management of expert evidence to international arbitration courts.

Takeaways

The relative benefits of relying on tribunal-appointed experts and party-appointed experts in international arbitrations are still heavily debated. However, new guidelines providing for the engagement of expert witnesses by parties as a primary means of working with expert evidence as well as in civil law – based arbitrations confirm the continuing popularity of party-appointed experts in international arbitration tribunals.

With respect to the appeal of arbitration tribunals as a provider of particularly flexible and efficient dispute resolution procedures, party-appointed experts are better equipped to resolve parties’ disputes. The increasing prevalence of expert witness conferencing and the endorsement of proactive case management by courts and arbitrators in Australia and internationally moreover amounts to recognition that party-appointed expert witness procedures provide more avenues for ensuring efficiency and fairness than tribunal-appointed expert witness procedures.

In considering how international arbitration tribunals will evolve to include expert evidence in international arbitrations with greater efficiency and fairness, lawyers and experts should look to Australian innovations, which have already significantly impacted the evolution of expert witness proceedings in global arbitration tribunals.

Notes

[1] George Burn, Claire Morel De Westgaver, and Victoria Clark (Bryan Cave Leighton Paisner LLP), ‘Annual Arbitration Survey 2021 – Expert Evidence in International Arbitration: Saving the Party-Appointed Expert’, pg. 9-10.

[2] Only 13% of respondents to Queen Mary University of London’s (‘QMUL’) International Arbitration Survey said they would be willing to do without party-appointed experts for cheaper or faster arbitrations: Abby Cohen Smutny and Norah Gallagher, ‘2021 International Arbitration Survey: Adapting arbitration to a changing world’, pg. 13, chart 9.

[3] Respondents to the 2018 QMUL survey identified ‘flexibility’ as one of three most valuable characteristics of international arbitration proceedings (Paul Friedland and Stavros Brekoulakis, ‘2018 International Arbitration Survey: The Evolution of International Arbitration’, pg. 7), while many in the 2021 QMUL survey noted the undesirability of an emerging ‘arbitration-formality’ that fails to aid efficiency or reduce costs (Abby Cohen Smutny and Norah Gallagher, ‘2021 International Arbitration Survey: Adapting arbitration to a changing world’, pg. 14).

[4] Fleur Kingham, ‘Court Managed Expert Evidence – Using ADR techniques to enhance the integrity and utility of expert evidence in the Land Court’ for The Australian Dispute Resolution Research Network, published 30 April 2019: https://adrnetwork.wordpress.com/2019/04/30/court-managed-expert-evidence-using-adr-techniques-to-enhance-the-integrity-and-utility-of-expert-evidence-in-the-land-court/

[5] Doug Jones AO, ‘Methods for Presenting Expert Evidence’ in the Global Arbitration Review, published 3 September 2021: https://globalarbitrationreview.com/guide/the-guide-evidence-in-international-arbitration/1st-edition/article/methods-presenting-expert-evidence#footnote-027

[6] Fleur Kingham, ‘Court Managed Expert Evidence – Using ADR techniques to enhance the integrity and utility of expert evidence in the Land Court’ https://adrnetwork.wordpress.com/2019/04/30/court-managed-expert-evidence-using-adr-techniques-to-enhance-the-integrity-and-utility-of-expert-evidence-in-the-land-court/