The Universality of Inefficiency – and the Case for Expedited Hearing Processes

Sometimes it’s nice to know you are not alone. A recent survey of international arbitration practitioners shows that Canadian administrative justice practitioners are not the only ones with frustrations about slow and inefficient processes. The survey results are also a strong indicator of the universality of process challenges – these challenges exist in both public and private sector dispute resolution fora and across many (all?) countries.

Every year, White and Case – an international arbitration firm – conducts surveys of international arbitration participants, including in-house counsel of public and private sectors, arbitrators, private practitioners, representatives of arbitral institutions and interest groups, academics, administrators, experts and third-party funders. In this year’s survey they received 2,402 responses and conducted 117 interviews.

Although private arbitration is often praised for its flexibility and ability to meet the needs of users, there are persistent concerns about delays and inefficiencies throughout the arbitration process. The most significant drawbacks of arbitration cited by users are the length of time and the cost of proceedings.

In this survey, respondents were asked, “Which behaviour has the most negative impact on the efficiency of arbitration proceedings?”, with five options to choose from:

• Counsel focusing on adversarial rather than collaborative approaches;
• Lack of proactive case management by arbitrators;
• Counsel over-lawyering (e.g., over-detailed or long submissions);
• Excessively delayed or lengthy awards; or
• Excessive procedural formalities.

The blame for inefficiency was almost evenly divided between the conduct or behaviours of counsel and arbitrators: 46% of respondents attributed the most negative inefficiencies to counsel behaviour, while 39% attributed it to arbitrators’ lack of proactivity during or after the proceedings. Excessive procedural formalities (15%) could be attributed to either or both counsel and arbitrator, although some who were interviewed suggested that the formalities mostly arise from procedural rules or arbitral institution staff.

Experienced arbitration users (30 or more arbitrations over 5 years) had the most concerns about counsel behaviour during the proceedings: they found over-lawyering (28%) and adversarial counsel conduct (27%) to be most responsible for inefficiencies.

Many interviewees had negative comments about counsel behaviour, such as the tendency to produce “often baseless and alternative defences or arguments”, that undermined their credibility and affected the speed, cost efficiency and effectiveness of the proceedings. The use of court-like litigation practices was also cited as detrimental:

Other interviewees noted that adoption of litigation-style approaches, ‘guerilla’ tactics and formalised styles of advocacy were detrimental to the practice of arbitration. A few interviewees, including from North America, expressed particular resentment at what they perceived as an “Americanisation” of international arbitration proceedings, in particular excessive disclosure requests and sometimes “aggressive” adversarial conduct.

Perhaps not surprisingly, arbitrators were most critical of “over-lawyering” while counsel were more concerned about arbitrators’ “lack of proactivity”.

Some of the concerns relating to counsel conduct included:

• excessive submissions
• repetitive submissions
• post-hearing briefs of questionable utility and purpose

One arbitrator noted: “It is not impossible to distil most cases down to something that is not flabby, repetitive and over-long.”

Several counsel, arbitrators and other arbitration users suggested that arbitrators needed to be more “decisive and courageous”, especially in reaching procedural decisions.

Another source of frustration regularly raised during interviews by counsel and other users was that “some arbitrators are too busy to be proactive”. Arbitrators taking on too many appointments was considered a primary issue. In-house counsel (both private sector and government) also expressed dissatisfaction over delayed decisions and suggested that arbitrators “better manage their availability and conduct matters expeditiously”.

Suggested solutions

In the survey, respondents were asked to identify the procedural mechanisms they believed would most enhance the efficiency of arbitration proceedings. They were asked to select up to three options from a list or suggest ‘other’ mechanisms. The most favoured mechanisms were expedited arbitration procedures (50%) and early determination procedures for manifestly unmeritorious claims or defences (49%).

Arbitrators and arbitration institution staff strongly supported the use of expedited arbitration procedures. This may reflect their familiarity with the expedited process.

Those interviewed agreed that expedited processes were “particularly useful” in less complex cases. Some questioned the use of monetary limits as a screening mechanism for expedited arbitration, suggesting that the decisive factor should be the level of complexity rather than the monetary value of the dispute.

The interviewees observed that the effectiveness of expedited processes depended on the following factors:

• the tribunal’s availability and willingness to make courageous and quick decisions;
• well-prepared parties; and
• when client expectations are managed.

Expedited or other express-type arbitration procedures in arbitral rules were experienced by more than two-fifths of respondents (42%), with 84% of these respondents finding them more efficient than non-expedited processes and 76% willing to use them again. Paper-only arbitration was also frequently experienced (36%), with 82% of those with experience considering it more efficient and 75% open to future use. “Bespoke” expedited processes (27%) and expedited tribunal formation (26%) were less frequently encountered but had high perceived efficiency (85% and 81%, respectively) and likelihood of reuse (76% and 74%).

The most cited reason for choosing an expedited process was the desire to minimise costs (65%). Speed of resolution was the second most significant factor (58%). Low complexity (50%) and dispute value (34%) were also key factors.

The consensus was that expedited arbitration reliably lowers costs where arbitrators or counsel operate on a capped or fixed-fee basis, and where no oral hearing takes place. Another cost saving is the lack of extensive (or sometimes even any) document production phases. The effectiveness of an expedited process also depends on choosing an arbitrator who is available, responsive and willing to make decisions quickly.

Although early dismissal of unmeritorious claims (a form of summary hearing) was identified as a possible enhancement of arbitration processes, there were many concerns about its application. The concerns about due process were significant. While some interviewees noted that frivolous applications for early determination can amount to abuse of process, many agreed that tribunals could and should act more decisively at an early stage.

Canadian tribunal approaches

Canadian tribunals, for the most part, have spent more energy and effort on summary processes – processes designed to eliminate unmeritorious or frivolous claims. There is plenty of discussion about the pros and cons of summary processes in the administrative justice community. I think summary hearings have their place in a tribunal’s toolkit for addressing case volumes. In some future column I will discuss the effective use of summary processes.

What tribunals have not spent much time pursuing are expedited hearings. Admittedly, designing an expedited process is much more difficult than implementing a summary process.

The one form of expedited process that tribunals do use consistently is a paper hearing, commonly referred to as a “written hearing”. In the White and Case survey this was identified as an expedited process. Written hearings are not necessarily more efficient in terms of potential delay – all the procedural steps that would be present in an oral hearing are required. The adjudicator still must review all the documents and submissions and write a full decision. What is missing are any hearing days devoted to testimony. Arguably, if a paper hearing was to be transformed into an oral hearing, there would be little to no oral testimony. That is because paper hearings do not normally involve an assessment of credibility.

Expedited processes that would address delays in a meaningful way are harder to implement. True expedited processes involve shortcuts to the usual full adjudicative process. To figure out what shortcuts are needed, it helps to identify the causes of delays in administrative justice. Here is an incomplete list:

• Document disclosure or production
• Scheduling of multiple hearing days
• Availability of counsel
• Availability of a decision maker
• Adjournments
• Lengthy testimony
• Excessive advocacy (frequent objections, procedural motions, etc.)
• Lengthy submissions
• Workload of the decision-maker (i.e., time to write a decision)
• Requirement for full reasons that address all the submissions of the parties

As you can see from the list, some of these causes are easier to address than others. Some can be addressed – or at least partially addressed – through the following tribunal practices or procedures:

• A firm (but fair) adjournment policy that makes adjournments the exception rather than the rule
• Fine tuning the estimate of required hearing days to reduce the requirement for continuation dates
• Encouraging the parties to provide an agreed statement of facts and agreed book of documents
• Using written witness statements (will-says) to reduce time in the witness box
• Training adjudicators on active adjudication skills
• Keeping on top of adjudicators’ workloads and adjusting schedules accordingly

Some of the causes are not within a tribunal’s authority to resolve – such as the appointment and reappointment of a sufficient number of adjudicators and other resources needed to operate efficiently. Also, the resources of the parties that appear before a tribunal are outside of its control.

The key causes of delay during the hearing and after are, in my view, only resolvable with the consent of the parties or statutory change. That is because procedural fairness and natural justice rules would generally prevent a truly expedited process.

There are two things that take up most of the time in the hearing room – testimony and submissions. Although an adjudicator can control a hearing by limiting repetitive or irrelevant testimony, it is not possible to put time limits on relevant testimony. Similarly, an adjudicator can put time limits on submissions but must allow a party to make full submissions.

After the hearing, delay can arise because of the writing process. I have already touched on the workload of the adjudicator as an issue. In addition, on judicial review the courts require detailed tribunal reasons that provide a full justification and address all of the parties’ submissions.

A truly expedited process for administrative justice would involve quick hearings with limited evidence, brief submissions, and short decisions – all the characteristics that would normally be viewed with alarm by the courts. That is why effective expedited processes normally involve the agreement of the parties that they will not seek judicial review of the decision.

I think expedited processes are likely to be more successful with disputes involving institutional parties with heavy volumes of disputes. Such processes require the agreement of the parties, as well as the active participation of the tribunal. One example of an expedited process is the one set up to deal with hundreds of damage claims arising out the pay system failure of the federal government (commonly known as “Phoenix”).

The more lasting resolution to delays in justice rest with the parties to disputes. More collaboration in resolving disputes in the form of meaningful (and timely) settlement discussions and a willingness to engage in meaningful mediation would go a long way to reducing the volume of disputes.

In my view, there is a place for expedited processes in adjudication, but it is not the solution to our clogged and sclerotic justice system. Changing our litigious culture requires a multi-pronged approach as well as a willingness to accept compromise by all participants in the justice system.