22 Feb

Pale, Male, and Stale: Addressing Diversity in Arbitration

By Erin Peters, Associate (BLG)

Diversity in arbitration is a trending topic in the field. Results of a recent comprehensive survey demonstrate that there is good reason for this. Despite increasing attention on the topic, the arbitration scene remains “pale, male, and stale.” But why does increasing diversity matter? Many answers to this lead to the ultimate question:  “What can you do about it?”

Diversity in arbitration has received a considerable amount of attention in recent years, and there may be a good reason for that. Just last year, Berwin Leighton Paisner released the results of their annual International Arbitration survey, choosing to focus on the issue of diversity on arbitral tribunals. The 2017 survey was entitled “Are We Getting There?”.(1) The answer appears to be “yes”… but “there” remains in the distance.

Of the 122 survey respondents from all over the world, 84% felt that tribunals contained too many men, a perception supported by the data. Data from the International Chamber of Commerce shows that only 20% of arbitrators appointed are women,(2) while statistics from the Chartered Institute of Arbitrators show that of the 222 arbitrators from which presidential appointments are made, only 16 (7%) are women.(3)

Notably, gender is not the only metric of diversity. The concept of diversity is itself, diverse. Thus, the same survey showed that the vast majority of respondents (80%) also believed that tribunals contained too many white arbitrators, while 64% felt that there were too many arbitrators from Western Europe or North America. Along yet another dimension, 28% of respondents believed that they had lost arbitral appointments because they were considered too young. It is no wonder that the phrase “pale, male, and stale” is so frequently used to describe the lack of diversity on arbitral tribunals.

Around this point, some readers may be asking, “so what? Why does it matter?” All that should matter is that there are experienced, knowledgeable, and competent arbitrators who will determine a dispute fairly and efficiently.

An issue as multi-faceted as this one necessarily has a varied answer. For many, increased diversity has intrinsic value; increasing the diversity of views increases the robustness of the deliberative process as different perspectives are brought to bear. Different perspectives increase the likelihood of greater attentiveness to the parties’ arguments and positions. This leads to increased fairness in process and outcome, ultimately improving the quality of arbitral awards.  In addition, there is also logic substantiating the idea that it is important to have arbitrators who reflect the constituency they serve.  

Perhaps the most persuasive argument is rooted in fundamental principles of economics and the ideal of a free and competitive market. Increasing the pool of arbitrators, along with increasing transparency around performance, may provide greater choice, encourage better performance, and foster new perspectives as arbitrators compete for appointments. Many users of arbitration understandably take a short-term, self-interested view of the appointment process, assuming (or hoping) that they will not need an arbitration process after the dispute at hand. However, established practice in arbitration is a barrier to change and keeps new entrants out; the same arbitrators are chosen again and again. Increasing the pool of arbitrators may reduce the likelihood of repeat appointments from a limited pool of arbitrators and the apparent bias it can cause – a point underscored by the High Court of England and Wales in Cofely v Bingham, where it removed an arbitrator on grounds of apparent bias where he had been nominated numerous times by the same party. Nevertheless, the Court noted a degree inevitability of repeat appointments when parties are faced with a small pool of candidates.[4] Thus, expanding the ranks of arbitrators is essential to the legitimacy and longevity of the process.

The good news is that an overwhelming 92% of respondents said that they would welcome more information about new and less well-known candidates. This is positive, as far and away the most important quality in an arbitrator, as reported by 93% of respondents, is expertise. Notably, there is a very real difference between experience and expertise. While new candidates impliedly lack experience as arbitrators, this says nothing about their expertise in the field. Moreover, these experts will only gain experience as arbitrators if users have the gumption to push beyond the limited roster of recycled candidates. By demonstrating a willingness to increase the pool of candidates competing for appointments, arbitration users can encourage both old and new entrants to stay sharp and hone their value-add to the process.

So, what can we do? It is clear that everyone has a role to play. It starts by being aware, and thus it is key to identify the right tools to achieve increased diversity. If you are an institutional player, are you tracking, publishing, and considering diversity-related statistics? Increasing the transparency around arbitrator availability, attributes, and performance would equip users with relevant criteria to consider when making arbitrator appointments. If you are a user of arbitration, do not wait for institutions to take the lead. Indeed, very few institutions involve themselves in the selection of arbitrators. Moreover, it is problematic that while 70% of respondents felt that it would be desirable for arbitral institutions to publish statistics on diversity, a mere 28% said that the content of the statistics would influence their choice of arbitral institution in the future. Therefore, it is up to client-users and counsel to consider diversity when drawing up a short list of potential candidates for appointment as arbitrators. The survey shows that 56% of respondents already do this. Let’s improve that number and bring “there” a little closer to here.

 


(1) Berwin Leighton Paisner, “Are We Getting There?” (BLP, 2017) < http://www.blplaw.com/media/download/BLP-_Diversity_on_Arbitral_Tribunals_-_Survey_Report.pdf>.

(2) 2017 Statistical Report, ICC International Court of Arbitration Bulletin.

(3) CIArb, Arbitration vol 83:4 (2017) < http://www.ciarb.org/docs/default-source/all-publications/the-journal/vol83/2017_83_arbitration_issue_4_print.pdf>.

(4) Cofely Ltd v Bingham, [2016] EWHC 240.


 

Erin Peters is an associate in the Toronto office of Borden Ladner Gervais LLP, practising in the Construction Group.

Print Friendly, PDF & Email
Facebook
Facebook
YouTube
YouTube
LinkedIn

Leave a Comment