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Arbitration in the metaverse: You can’t go back again

Friday, July 08, 2022 @ 10:32 AM | By Barry Leon and Anthony Daimsis


Barry Leon %>
Barry Leon
Anthony Daimsis %>
Anthony Daimsis
This is the third in a three-part series that examines the role the metaverse could play in the future of dispute resolution, with a focus on arbitration. In the pervious articles, Anthony Daimsis explained what led to the University of Ottawa becoming the first law faculty to run a moot in the metaverse and the pros and cons of running a hearing in the metaverse. In this third article, Barry Leon will comment on these observations and draw on his own experience in conducting virtual arbitrations to offer his perspective on how virtual reality technology may have a transformative role in dispute resolution, even if it is in its infancy.

A practical take-away from Anthony Daimsis’ articles that precedes this additional commentary is that “you can’t go back again.”

The move to virtual hearings during the pandemic has led to lasting changes in arbitration. Various permutations and combinations of virtual and in-person — “hybrid” — likely will be the method of conducting arbitrations for some time. Changes from hybrid will be towards the use of improved and newer technologies, not to a return to almost entirely “in-person” arbitrations.

Of course, in-person merits hearings (and sometimes other hearings) will resume to some unknown extent, but only insofar as a thorough analysis of the various relevant factors, including costs, effectiveness, time zone difference, complexities, health considerations, environmental considerations and other factors lead to a conclusion that an entirely or mostly in-person hearing makes sense.

Opportunities for younger arbitration practitioners

The increased embedding of increasing amounts and types of technology in the arbitral process creates opportunities for younger counsel and younger arbitrators, who on average are more familiar and comfortable with technology and changes in technology.

The need for technology proficiency

At the same time, it is incumbent on more senior arbitration practitioners to become familiar with the technology. More should be done by them, and by arbitration organizations and institutions, in this regard. Customized training in appropriate settings, and by appropriate trainers and coaches, may be the key to raising the technology proficiency of all those involved in the arbitral process, both for today’s technologies and tomorrow’s.

Bridging the gap between law schools and practitioners

As is demonstrated by the Virtual Reality Moot held by the Faculty of Law at the University of Ottawa, we have a lot of innovative thinking and cutting-edge work ongoing at our Canadian law schools, and we have a bar — including arbitration practitioners — that can benefit from that thinking and work in many ways, yet we see more of a divide than should be the case.  

Maybe it’s a matter of law schools becoming better “service providers” and “marketers” or maybe it’s a matter of practising lawyers building more bridges and looking to law schools to see how they can share in the innovative thinking and cutting-edge work being done and that could be done. Maybe it’s both.

International student moots

Traditionally international student moots have been in-person but since the pandemic began, we witnessed a move to virtual which enables wide participation but unfortunately denies the social interaction that is so important for student moots. The way forward is likely some form or forms of hybrid. For moots like the Vis Moot and the Vis Moot East, which feature international commercial arbitration as their dispute resolution mechanism, many practice moots (known as ‘pre-moot’) occur worldwide before the actual competitions. For many if not most law faculties, travelling for a practice moot is not within their budgets. Virtual reality, as Zoom has done for the past two mooting years, would offer an inexpensive way for schools to participate in practice moots around the world. Whether the moot competition themselves will be hybrid or only in-person remains to be seen.

Technology adds to arbitration’s flexibility

If an objective in arbitration is to enable an arbitral tribunal to obtain what it needs — evidence, relevant law, submission and so forth — in the most effective and efficient manner to make fair, timely, and sensible decisions, arbitral tribunals and counsel for the parties need to consider at each step whether the activity is advancing that objective most effectively, or whether there are better ways to do it. Arbitration offers process options for dispute resolution that can benefit from customization and creativity, which can be expanded with virtual and hybrid case management conferences and hearings.  

Technology allows for more innovation and customization in how arbitrations, and in particular arbitration hearings, are organized, enabling the evidence and submissions to be presented in ways that are most effective for the arbitral tribunal. For example, with the ability to conduct more frequent virtual case management conferences, the tribunal and the parties can consider on an ongoing basis the focusing of the evidence to get to the heart of the determinative issues in ways that will save both time and money. The issues in an arbitration can be “sliced and diced,” going beyond traditional bifurcation of jurisdiction issues from liability and damages and/or bifurcation of liability and damages.

Small and medium size enterprises

A recent study conducted for The Commonwealth examined the role arbitration and other forms of dispute resolution could play with small to medium size enterprises (SMEs) globally. SMEs comprise the vast majority of the world’s economy. An evident barrier for most SMEs is the cost of dispute resolution of just about any kind. The technology discussed in this article may have a dual role to play in the SME context.

SMEs tend to have low-value disputes. In many cases, those low-value disputes are not the traditional disputes seasoned arbitrators take on. However, lawyers who wish to gain experience as arbitrators would welcome the opportunity to take on these cases. And so, the virtual technology — including, eventually, virtual reality — could serve the SME market while providing arbitrators with experience. Newer arbitrators are still, often, experienced lawyers. Thus, this is not an inferior arbitration but a well-matched means of serving an important need.

This is the third in a three-part series. Read part one: Arbitration in the metaverse: Not quite ready for prime time; part two: Arbitration in the metaverse: Access to justice.

The authors invite readers to submit comments and questions to anthony.daimsis@uottawa.ca, which the authors will address in a subsequent article.

The Honourable Barry Leon is an independent arbitrator and mediator with Arbitration Place, 33 Bedford Row Chambers (London) and Caribbean Arbitrators. He was presiding judge of BVI’s Commercial Court (2015-2018) and is a former chair of ICC Canada’s Arbitration Committee. Anthony Daimsis, FCIArb, has over 20 years of experience in arbitration, sales law and contract law. He is a fellow of the Chartered Institute of Arbitrators and professor of law at the University of Ottawa’s Common Law section. He is a member of Littleton Chambers’ (London, UK) International Arbitration Group.

Photo credit / Kittiporn Kumpang ISTOCKPHOTO.COM

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