First published in “Arbitration News: Newsletter of the International Bar Association Legal Practice Division.” Vol 16 No 2 September 2011

In a March 2011 CEDR survey of practitioners from major UK law firms, nearly 100% of respondents said they would like to see changes to the arbitration system. These practitioners said that they would like the arbitration system to be less costly, faster, have more time management by arbitral tribunals and be less adversarial.

A greater use of settlement initiatives, such as mediation, in international arbitration could help to reduce these concerns. Such initiatives bring control back to the client and allow the client a chance to shape a settlement that fits its needs far better than an imposed resolution and timetable set by a third party.

CEDR Settlement Rules
To this end, around 18 months ago CEDR launched the CEDR Rules for the Facilitation of Settlement in International Arbitration (the “Settlement Rules”), which were developed by a CEDR Commission co-chaired by British ex Lord Chief Justice Lord Woolf and Gabrielle Kaufmann-Kohler. The Settlement Rules were explained in detail in this newsletter in the September 2010 edition. Their aim is to offer a structural framework to ensure that parties, lawyers, arbitrators and arbitral institutions all work together to maximise the opportunities for settlement within the arbitration process. They outline steps arbitral tribunals are to take (and not take) with a view to facilitating settlement by the parties.

Consistent with this clear need for change, there has been a positive response to the Settlement Rules, arbitrators have reported suggesting their use to parties and some 50% of practitioners surveyed by CEDR in March 2011 said they would consider recommending their use to their clients going forward.

Enhancement, Rather than Replacement, of Institutions’ Procedural Rules
The Settlement Rules are intended to supplement the procedural rules that the parties have chosen, not to replace them. The procedural rules will continue to deal with the underlying process for the arbitration and the Settlement Rules overlay a framework to operate in tandem to raise awareness of settlement opportunities.

Similarly, the Settlement Rules do not advocate that the arbitrator acts as mediator. Aside from the different skills involved in arbitration and mediation, arbitration as a process needs a binding determination.

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by Karl Mackie

Dr. Karl Mackie a mediator and Chief Executive for The Centre for Effective Dispute Resolution (CEDR).