03 July 2020

Top law firms collaborate to draw up draft protocol for online arbitrations

Myfanwy Wood

Myfanwy Wood: 'This initiative has the ability fundamentally to change the future of arbitration'

Initiative sets out to 'change the future of arbitration' as digitalisation accelerates

A group of US and UK lawyers, specialising in international arbitration, has developed a draft protocol to ensure greater consistency and security in the use of online arbitration platforms.

The group, drawn from Herbert Smith Freehills (HSF), Ashurst, CMS, DLA Piper, Hogan Lovells and Latham & Watkins, say the new protocol addresses the absence of agreed guidance on the use of new technologies in international arbitration. 

"This initiative has the ability fundamentally to change the future of arbitration," said Myfanwy Wood, a senior associate at Ashurst.

Work on the draft protocol, which is now out for consultation, started in May 2019 to meet existing concerns by stakeholders over industry compliance with international data management and cyber security obligations. 

Calling for discussion and consensus, Charlie Morgan, a senior associate at HSF, who chairs the collaborative working group, said the protocol was aimed at both the arbitration community and technology providers.

“This guidance will support more informed, streamlined and effective decision-making about the adoption and use of online platforms in international arbitration,” he said.

“It will also herald the development of more sophisticated platform options that continue to meet the evolving needs of arbitration users."

Wood added that having an industry-wide protocol would act as a reference point for parties to consider when adopting new digital case management platforms, adding: “there has never been a more important time to secure consistency of approach on these issues”.

The initiative comes hard on the heels of the drafting of detailed cybersecurity guidance by an institutional group led by the International Council for Commercial Arbitrators (ICCA), which was due to be launched at the ICCA’s congress in Edinburgh in 2020, now rearranged to February 2021.

While the 2020 ICCA Protocol is designed to protect the integrity and security of international arbitration, it was drafted prior to the pandemic, when arbitration was still an essentially physical process with fast-increasing digital elements. 

Trends towards online and hybrid arbitrations have accelerated since the global Covid-19 pandemic, leading to the growth of online case management platforms for conducting disputes. 

Examples include a bespoke platform mirroring physical arbitration created by the International Arbitration Centre, in London, and a joint venture on hybrid (onsite/online) arbitrations, led by the ICDR, Maxwell Chambers, and Arbitration Place in the UK, Singapore and Canada.

The draft protocol has been endorsed by practitioners. Anneliese Day QC, of Fountain Court, said: “From a counsel and arbitrator point of view, the importance of being able to use [such platforms] as early as possible cannot be underestimated.”

Brandon Malone, co-leader on the ICCA Protocol, called it “a timely and exciting development”, saying that the Covid-19 crisis had pushed the normalisation and use of technology forward at breakneck speed.

“We now have widespread acceptance and proof of concept for virtual hearings,” adding cybersecurity considerations were central to the project, which he welcomed on ICCA’s behalf. 

With consensus on the use of such platforms, he agreed with John Judge, an arbitrator at the IAC, who said the protocol would “no doubt, save time, money and heartache for all users”.

Paula Hodges QC, president of the London Court of International Arbitration, said it was very supportive of the initiative, in giving “a huge boost to online developments at a very apt moment in arbitration's procedural evolution".

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