The Covid-19 pandemic poses an unprecedented challenge to legal proceedings. Restrictions on travel and movement imposed by governments all over the world have meant that the conduct of legal proceedings has had to change in a short time. While lockdowns are being eased in certain countries, social distancing largely remains and continues to present challenges to the smooth running of legal proceedings. In this article, Anna Freund, an associate in our International Arbitration team, examines the differences between the English courts’ approach to the use of technology and virtual proceedings to that taken by arbitral institutions around the world.
Courts and arbitral institutions had to react rapidly to the lockdown to ensure the administration of justice continued to work as efficiently as possible. Unlike in many other jurisdictions, the courts in England and Wales quickly committed to remaining as functional as possible and ensuring the continuance of ongoing legal proceedings. The same can be said about many arbitral institutions all over the world.
Both have done this predominantly through the use of technology and, in particular, the promotion of virtual hearings. However, when and how the English courts and arbitral institutions reacted has differed, and with good reason.
The English courts
While some jurisdictions suspended all civil and criminal hearings, the English courts have been proactive in ensuring the least disruption possible to the legal process and, in particular, ongoing matters.
On 17 March 2020 (before lockdown in the UK was announced on 23 March 2020), the Lord Chief Justice issued a press release stating that it was “of vital importance that the administration of justice does not grind to a halt”. Following this, Her Majesty’s Courts & Tribunals Service (“HMCTS”), the body responsible for the administration of criminal, civil and family courts and tribunals in the English jurisdiction, introduced guidance and adopted changes.
The English courts and tribunals have long had the power to hold hearings remotely, including by video conference, and to order that cross-examination of witnesses based abroad be conducted via video link. Directions hearings were sometimes conducted by telephone. However, until the current health crisis, the vast majority of hearings were held in-person.
On 27 March 2020, HMCTS announced that more than half of the courts and tribunals in England and Wales were to be closed and that as many hearings as possible were to proceed remotely instead.
As early as 22 March 2020, the Judiciary published its Protocol Regarding Remote Hearings (the “Protocol”). This applies to all civil hearings, including trials, applications, and those in which litigants in person are involved in the County Court, High Court, and Court of Appeal (Civil Division).
The Protocol states that it should be applied flexibly, but that court hearings should be conducted remotely wherever possible. It anticipated that it would be possible for all short, interlocutory and non-witness applications to be heard remotely. This, in and of itself, presented a significant change to the way proceedings are usually conducted in the English courts. It soon became apparent that substantive hearings, including those involving witness evidence, would also be heard on a fully remote basis. That marked a significant departure from what had been the usual practice beforehand.
For example, on 19 March 2020, Mr Justice Teare directed that the full trial in the matter of National Bank of Kazakhstan and Others v Bank of New York Mellon would be held remotely. The trial became the first virtual trial in the Commercial Court. Stewarts acted for the successful claimant in the matter: read more about our experience here.
Other judges followed suit and ordered hearings to go ahead on the previously scheduled dates.
On 31 March 2020, the Judiciary published an updated version of the Protocol, and we expect it to be kept under review.
The Civil Procedure Rules were also updated, for example, to temporarily allow parties to agree longer extensions of time (up to 56 days, double the usual 28 days) without seeking the consent of the court.
The situation is changing almost daily. For example, for hearings in the Rolls Building in London (the Business and Property Courts), four categories of hearings have recently been introduced, ranging from fully remote hearings (with everyone including the judge at home) to normal physical hearings (with all the participants attending in person). The ‘middle ground’ is a hybrid hearing with the judge and some participants in court, and some participating remotely. The decision as to which sort of hearing is appropriate in any given case will be for the judge to decide. As there are only 13 courts in the Rolls Building that are suitable for hybrid or normal physical hearings, it will only be possible to accommodate a limited number of cases in this way. Accordingly, the majority of hearings will continue to take place remotely for the time being.
As of today, most courts and tribunals are continuing to avoid in-person hearings and are arranging remote hearings wherever possible. With the recently announced lessening of lockdown restrictions in England, it may be that in-person hearings once again are possible, but guidance is awaited.
Last week, the Commercial Bar Association (Combar) issued its own Guidance Note on Remote Hearings, which should be read together with the Commercial Court Guide and the advice and guidance issued by the Judiciary. The note makes it clear that there is now capacity in the Commercial Court for a small number of normal or hybrid hearings (accommodating up to six legal representatives in total with three to four client representatives). It stresses that whether a hearing should proceed remotely is a matter of judicial discretion. However, concerns about remote hearings may be exacerbated if the case involves issues of dishonesty or fraud, requires the examination of complex materials, or gives rise to particular issues of confidentiality.
Reasons for the approach?
The English courts are undoubtedly very busy. The existing caseload pre-Covid-19 was heavy, and it will now have been made worse by the inevitable delays caused by the ‘physical’ closure of the English courts and tribunals.
The current listing schedule in the various divisions of the High Court illustrates this. In the Chancery Division, trials for five to ten days are currently being listed between June and November 2021. In the Queen’s Bench Division, trials for five to ten days are being listed between February and May 2021, and in the Commercial Court, any trials over two days are listed from February 2021.
The courts’ proactive approach in promoting virtual hearings was necessary because their capacity was already limited and now further under pressure due to the current crisis. Any postponements would cause a serious risk of clogging up the system and causing a future bottleneck.
Accordingly, the courts’ approach is to proceed with as many listed hearings as possible; during the pandemic that will be by telephone or video.
It is apparent that conducting cases remotely is working well in some courts and for some matters, but that other courts are struggling. The closure of court buildings and the limited number of court personnel available are posing considerable challenges. For example, jury trials in criminal cases were fully postponed in light of the difficulties presented, although they are now starting to recommence on an extremely limited basis.
An additional hurdle for court cases is the principle of open justice. The Coronavirus Act 2020 makes provisions for hearings to be held via video or audio links. The Protocol addresses how hearings are to be recorded and made public. Options include live-streaming the hearing (for example, on YouTube, which is the solution adopted in the National Bank of Kazakhstan case) or by allowing accredited journalists to log into the remote hearing. So far, there do not seem to have been any problems meeting the requirement for open justice.
How many hearings have so far gone ahead virtually?
HMCTS recently published data on the use of technology, which provides some answers. On 27 March 2020, around 70% of cases heard in England and Wales were heard remotely using audio or video technology. That number had increased to 85% by 31 March and to 90% by 7 April. HMCTS reported that the number of cases heard remotely each day in England and Wales increased from under 1,000 in the last week of March 2020 to approximately 3,000 by mid-April.
While ongoing cases continue, the number of newly issued cases has dropped considerably: by 65% between the end of March and beginning of April. This drop has been attributed to the economic impact of Covid-19, but as the economy picks up, disputes that have been developing during the lockdown will lead to a new wave of litigation and arbitration. An increase in litigation is likely to lead to bottlenecks on the back of the already significant backlog in the English courts. This explains recent commentary questioning whether forms of alternative dispute resolution and arbitration are a viable alternative.
The arbitration community has steadily adopted new technologies over time to aid the resolution of disputes, and the use of virtual aspects in the conduct of proceedings has long been commonplace in international arbitration.
However, the arbitral institutions were initially slower than the English courts in issuing guidance on or actively encouraging the conduct of remote hearings in the light of Covid-19. Anecdotal evidence suggests that a significant number of arbitrations scheduled to go to an in-person hearing were postponed to a date later in the year or even to 2021. That is, perhaps, a consequence of the consensual nature of the arbitral process.
It was not until 16 April 2020 (nearly a month after the Judiciary issued its Protocol) that the leading arbitral institutions released a joint statement on Covid-19 (the “Statement”). The Statement expresses the institutions’ wish to support international arbitration’s ability to contribute to stability and foreseeability in a highly unstable environment, including by ensuring that pending cases may continue and that parties have their cases heard without undue delay. This is the first truly cross-institutional initiative by arbitral institutions.
At the same time, arbitral institutions started issuing their own guidance statements as well. For example, the ICC published the ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic (the “ICC Guidance Note”), and the Nigeria-based Africa Arbitration Academy published its Protocol on Virtual Hearings in Africa (read more about the Africa Arbitration Academy’s Protocol here).
Earlier this month, the Vienna International Arbitral Centre published The Vienna Protocol – A Practical Checklist for Remote Hearings which, as the title suggests, contains very helpful practical advice and guidance for remote hearings.
Members of the arbitration community have also created a website, which acts as a forum for news and recent developments in the law and practice of virtual arbitration.
Reasons for the approach?
Traditionally, arbitral tribunals have perhaps been less willing to exercise their case management powers than the courts. Those powers include arrangements for the substantive hearing in the proceedings. However, no doubt bolstered by the ongoing effects of the pandemic, tribunals and arbitral institutions are recognising that it may not be possible to hold in-person hearings within a reasonable time and that waiting until it becomes possible would produce unwarranted and perhaps even prejudicial delay.
One of the main reasons why arbitral institutions have been slower in proclaiming support for virtual hearings could be that arbitration in itself is a highly flexible process. Arbitrations are not restricted by the same constraints as court proceedings. Given the adoption of ‘virtual justice’ was already commonplace in certain features of arbitration proceedings, perhaps arbitral institutions felt there was less of a need to encourage what was already in common use?
However, other reasons may exist, including:
- The nature of arbitral hearings
Unlike in the English courts where the Civil Procedure Rules and applicable court rules dictate significant aspects of case management, a tribunal typically has full discretion over these aspects in arbitration. The applicable rules of an arbitral institution usually empower an arbitral tribunal with the widest discretion as to how to case manage arbitration proceedings and that is reflected in sections 33 and 34 of the Arbitration Act 1996 (where it applies).
The upshot is that guidance issued by the arbitral institutions is just that: guidance. Arbitrators will bear in mind their duties to act fairly and give each party a reasonable opportunity to put its case and to deal with that of its opponent, which provides them with a level of discretion and flexibility in the way they conduct a hearing. It would always be open to a tribunal to disregard institutional guidance in any particular arbitration.
It should also be remembered that the focus on party autonomy in arbitration (which is ultimately a consensual means of dispute resolution) means that tribunals may be less inclined to compel parties to proceed by way of remote hearings in the way a court judge could if that is not the parties’ express wish.
- The nature of arbitral hearings
- It is easier to find alternatives
In arbitration, it is generally easier for parties to find a new hearing date or find practicable alternative arrangements instead of proceeding with a full virtual hearing. Some venues offer innovative and flexible solutions. For example, the International Dispute Resolution Centre (IDRC) in London, the Arbitration Place in Toronto and Ottawa, and Maxwell Chambers in Singapore have formed the International Arbitration Centre Alliance (IACA) to share their physical, technical, and professional resources and enable quasi in-person hearings with different parties attending from different hearing venues.
One alternative would be to dispense with hearings altogether. Parties can agree to dispense with oral hearings and have the entire dispute decided “on the papers”.
Flexibility in arbitration also extends to such matters as hearing times. Whereas the English courts have strict opening and sitting hours, in arbitration it is not uncommon for parties to set hearing days and sitting times that reflect the international nature of the disputing parties or limited availabilities. For example, hearings can, and often do, take place outside normal business hours.
The same applies to hearing locations. Arbitral hearings are not restricted to a particular location such as a court building or even a jurisdiction but can be held anywhere the parties wish. It is possible to simply change the location of the hearing if that is a practicable alternative.
- It is easier to find alternatives
- Public access and data protection/cybersecurity
Ensuring public access to hearings is not a requirement for arbitral hearings as arbitration is a private process. This potential problem seems to have been overcome by the solutions offered in the Protocol. However, it appears that some hearings may now become even more public, for example, if they are live-streamed on YouTube. This may not be in a party’s interests.
While ensuring public access to hearings is not a hurdle for the virtual conduct of arbitral hearings, cybersecurity and data protection issues remain and the virtualisation of proceedings perhaps increases the risk. The same issues arise in proceedings before the English courts.
It is vital that ways are found to ensure cybersecurity is maintained throughout and that any personal data is only processed in ways that are compatible with applicable laws. Earlier this year, the ICCA-NYC Bar-CPR Protocol on Cybersecurity in International Arbitration and the consultation draft of the ICCA/IBA Joint Task Force’s Roadmap on Data Protection in International Arbitration were released, which both offer helpful guidance and suggestions on cybersecurity and data protection. With virtual hearings becoming more frequent, arbitral institutions have provided further guidance. For example, the ICC’s Guidance Note contains some helpful clauses to incorporate in cyber-protocols.(read more about data protection and cybersecurity in the context of arbitration).
- Public access and data protection/cybersecurity
- Existing guidance
A further reason for the arbitral institutions’ delay in issuing guidance might be that resources offering guidance on virtual hearings already existed before the outbreak of the pandemic.
For example, in October 2017, the ICC had already published its Commission Report on Information Technology in International Arbitration. About a year later, in November 2018, came the Seoul Protocol on Video Conference in International Arbitration, which addresses the use of video conferences in arbitral proceedings and provides practical guidance for users of international arbitration.
A few months later, in March 2019, The Hague Convention Draft Guide to Good Practice on the Use of Video-Link under the Evidence Convention, was published. It outlines best practices for the use of video technology during remote proceedings and guidelines to address the primary practical issues that typically arise in such proceedings.
Finally, in April 2019, the Chartered Institute of Arbitrators published its Guidelines for Witness Conferencing in International Arbitration, which provides many useful insights. While these guidance notes were likely not produced with a fully virtual hearing in mind, the guidance they offer is relevant and helpful.
- Existing guidance
- Due process paranoia
Ordering a full virtual hearing may not be suitable in every case. Indeed, recently published analysis by Professor Wahab, which focuses on the interplay between procedural rules and the governing law of the arbitration, suggests that a tribunal may not always be entitled to order that a hearing proceeds on a fully virtual basis.
Still, even where a tribunal is empowered to use its case management powers to such effect, there may be concerns that in doing so it will risk breaches of due process. It is generally the case that arbitrators have a duty to adopt appropriate procedural measures aimed at assuring an efficient and cost-effective conduct of the arbitration, such as the duty to allow the parties a fair opportunity to present their cases as mentioned above.
Absent due process, the award or its ability to be enforced may be threatened. The catchphrase “due process paranoia” has for many years been used to capture the widely-held suspicion that tribunals tend to avoid making tough case management decisions out of fear of gifting the ‘losing’ party a way of challenging its eventual award.
This might explain why arbitral institutions nonetheless were keen to issue guidance, ie to help steer and comfort tribunals in the face of such concerns.
Some of the advantages offered by remote hearings, in particular, the possible reduction of costs by eliminating international travel and accommodation costs, are arguably all the greater in the context of an international arbitration where parties, their legal teams, witnesses, experts, and members of the tribunal may be spread over multiple geographic locations and time zones.
Environmental concerns have already led to a decrease of in-person hearings and travel and contributed to an increased use of technology. The arbitration community is actively reviewing the environmental impact involved in the conduct of international arbitrations with initiatives such as ‘The Campaign for Greener Arbitrations’. Covid-19 will no doubt catalyse the adoption of greener practices in arbitration, promoting environmental causes.
While it may be true that arbitral tribunals are less willing to push a party into a virtual hearing than the courts, the flexibility of the process may nonetheless allow for arbitral proceedings to conclude quicker given the bottlenecks faced by the English courts. The guidance published by arbitral institutions and the imperative to keep proceedings moving in the face of prolonged periods of lockdown and social distancing may help to inoculate due process paranoia too.
In recent months, not only hearings but also arbitral events have successfully taken place virtually (for example, this year’s Vis Moots) and technology is constantly improving.
The English courts were commendably fast in issuing guidance on the use of technology and transitioning into the conducting of hearings remotely. The main drivers for this have been the severe risk of bottlenecks and the need to allow the wheels of justice to continue to turn. It might also be said, however, that the adoption of technology and ‘virtual justice’ in this way was long overdue in the English courts.
While arbitral institutions were slower to issue guidance on the use of technology and virtual hearings, it is clear that the flexibility of arbitration makes it significantly easier to ensure the continuance of proceedings in times of lockdown and social distancing.
The situation is evolving on an almost daily basis. More and more court judges and arbitral tribunals are ordering virtual hearings, but the debate as to their suitability is a live one. Certainly, Stewarts’ experience of virtual hearings has, for the most part, been positive, but it is acknowledged that not every case will be suitable to proceed virtually. Still, it is incumbent upon all participants in the process to give serious consideration to whether remote hearings are a workable alternative, to ensure that the outcome of cases is not unnecessarily delayed.
It is likely that remote hearings will become more common, even after the end of lockdown. There is merit in some court hearings, such as procedural and case management and interim applications, being conducted virtually in future, as was often the case in arbitration long before Covid-19. While the likelihood of substantive hearings remaining fully virtual post the crisis is difficult to predict, it appears less likely.
It may also be that the delays in court proceedings and concerns around the courts’ capacity will result in an increased number of arbitrations. The flexibility offered to parties in arbitral proceedings has led to discussions about the merits of ‘converting’ ongoing court proceedings into arbitration proceedings. This would involve both parties entering into an arbitration agreement, and it is, therefore, only suitable for and attractive to parties which have a common interest in having their dispute resolved swiftly relative to the English courts.
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