21 May 2015
Expert testimony, while not a traditional component of evidence in international arbitration, has certainly become the norm—particularly with respect to damage calculations and issues of industry conduct. In recognition of that trend, the International Chamber of Commerce (the “ICC”) recently enacted new Expert Rules. These rules replace the ICC’s 2013 “Rules for Expertise.”
While experts are common in international arbitration, the procedures for appointing experts and presenting expert testimony vary widely. In light of arbitration’s hybrid nature, it is not uncommon to find a mix of common- and civil-law practitioners working within the same dispute resolution proceeding, whether as advocates or decision makers. In civil law jurisdictions, independent experts are typically appointed by the court, while in common law jurisdictions, experts are typically party-appointed. Moreover, occasionally, either an international arbitration tribunal will bring on an independent, tribunal-appointed expert to assist it in resolving conflicts between opposing party-appointed experts, or the parties will jointly appoint an independent expert.
Even beyond appointment, procedures for expert presentation range from traditional direct and cross-examination to expert conferencing or “hot-tubbing” whereby all of the experts involved in a matter meet to discuss issues. In expert conferences, generally, the experts are allowed to ask each other questions, as are the tribunal and opposing counsel. International Arbitration is nothing if not flexible. So long as experts remain separate from the tribunal (unless explicitly appointed to the panel), and are available for questioning by the parties in some form, there is wide berth to determine appropriate procedures for a given dispute.
In an effort to maintain this flexibility, in three separate sets of rules, the ICC clarifies its services and rules with respect to:
(1) Proposing Experts and Neutrals (Proposal Rules): At the request of a court, a tribunal, a party or the parties jointly, the ICC will make non-binding proposals for experts or neutrals. “Neutrals” may include adjudicators, mediators, neutral evaluators or dispute board members. This service is available even outside of the context of a dispute, “[p]arties might wish to obtain an expert opinion on an issue of importance to them in the ordinary course of business.” For assistance in a dispute resolution proceeding, a party can unilaterally request an expert or neutral proposal. The ICC will not inform other parties of unilateral requests unless explicitly asked to do so. Under the Proposal Rules, the ICC's involvement ends with the delivery of the proposal. The ICC does not charge fees for expert or neutral mediator proposals for cases administered by the ICC.
(2) Appointing Experts and Neutrals (Appointment Rules): In the context of a dispute resolution process, parties may request that the ICC appoint experts or neutrals. ICC appointments are binding and the ICC’s involvement ends upon completion of the appointment process. Experts appointed by the ICC serve as jointly appointed or tribunal-appointed experts. Unless the parties agree otherwise, any appointed expert is to act as an independent expert. The ICC will only appoint an expert under these rules if there is a clear agreement between the parties that allows for such an appointment.
(3) Administering Expert Proceedings (Administrative Rules): Parties may enlist the ICC to supervise the entire expert process in a dispute resolution process. The ICC will appoint experts or confirm party-nominated experts, coordinate between the parties and experts, monitor deadlines, oversee costs, scrutinize the draft expert report (if requested by the parties), and notify the expert reports to the parties at the end of the proceeding. Expert findings may be used to inform parties when negotiating settlements or, by agreement of the parties, may treat expert determinations as contractually binding.
The majority of the revisions in the new Expert Rules are aimed at increasing the efficiency of the proposal and appointment process. For example:
- The ICC maintains a database of experts and neutrals to draw from. Expert topics include accounting, finance, engineering, information technology, construction, energy and law. Parties and arbitrators occasionally find themselves in circumstances where the laws of an unfamiliar jurisdiction apply, thus requiring outside legal expertise.
- Any requests for ICC services under the rules must be accompanied by detailed information, including a description of the expert work needed, whether a report or meetings will be required and the language in which the expert is expected to work.
- Any potential expert or neutral (the ICC may identify a person or an institution) must confirm in advance availability to serve.
- Where the ICC is unable to find a single suitable expert, the rules allow the ICC to ask the parties whether they would consider the proposal or appointment of multiple experts who, together, have the necessary qualifications.
- If, after an expert is selected, the parties cannot agree on what the expert is supposed to do, the rules allow the expert to continue working on whatever that expert deems included within the scope of the expert’s mandate, without prejudice to a tribunal’s later determination about the appropriate scope.
- The ICC has not lost sight of cost issues presented by the increasing inclusion of experts in international arbitration. The Administrative Rules specifically caution parties and tribunals to “make every effort to conduct the expert proceedings in an expeditious and cost-effective manner.” In its 2012 Techniques for Controlling Time and Costs in Arbitration, the ICC cautioned against ramping up expert-related costs by stating it helps to “start with the presumption that expert evidence will not be required.”
- The Appointment Rules and the Administrative Rules include suggested language for inclusion in arbitration clauses for circumstances where parties agree up front to use these services.
Parties operating under the ICC’s 2013 Rules for Expertise for the proposal or appointment of an expert prior to the enactment of these new Expert Rules shall be deemed to have agreed to the operation of the new rules, unless any party objects. If a party objects, the old rules shall apply.
You can view the ICC’s Expert Rules in English, French or Spanish at http://www.iccwbo.org/News/Articles/2015/New-ICC-Expert-Rules-come-into-force/.