LCIA draft guidelines for counsel conduct in arbitration

Earlier this year, the LCIA published the latest draft of its new arbitration rules.

This revision is part of a wider movement of reformation of arbitration rules, including the VIAC, the ICC and the UNICITRAL Rules, the current Rules being in force since January 1998.

Amongst other new proposed changes (introduction of an emergency arbitrator procedure, provisions related to the default law applicable or the consolidation of cases), the introduction in an Annex to the Rules of General Guidelines for the Parties’ Legal Representatives (the “Annex” or the “Guidelines”) is a major innovation.

If the behavior of counsel in arbitration has been a much discussed topic lately, in particular with the adoption of the IBA Guidelines on Party Representation in International Arbitration in May 2013, the Annex marks the first time an arbitration institution intends to “promote generally the good and equal conduct of the parties’ legal representatives” (para. 1 of the Guidelines) and is willing to impose written guidelines on party representatives by providing expressly, within the rules, an obligation for “each party [to] ensure that all its legal representatives have agreed to comply with the general guidelines (…), as a condition of appearing by name before the Arbitral Tribunal” (Article 18.5 of the draft rules).

Turning to the content of the Guidelines themselves, legal representatives should not:

  • “[E]ngage in activities intended unfairly to obstruct the arbitration or to jeopardize the finality of the award,”
  • Knowingly make a false statement to the arbitral tribunal,
  • Procure, assist or rely upon any false evidence,
  • Conceal documents ordered to be produced by the tribunal, or
  • Deliberately initiate or attempt to initiate with any member of the arbitral tribunal or member of the LCIA Court ex parte communication.

In case of violation of the above obligations, the arbitral tribunals have been given express powers to sanction legal representatives: they thus have the power to order in general “any measures necessary to maintain the general duties of the Arbitral Tribunal” and in particular a number of listed sanctions, i.e.: a written reprimand, a written caution, and a reference to a regulatory or professional body – the fact that the latter sanction is drafted in between square brackets, however, indicates the controversial nature of this proposed sanction (Article 18.6 of the draft rules).

If generally welcomed, the introduction of ethical standards for counsel raises however several issues:

  • Was it necessary to codify the standard for counsel behavior in arbitration?
  • What is the impact of a “reprimand” on the legal representative?
  • Will the new provisions be used as a delaying tactic, i.e., including potential appeals or challenges?

Besides, one can wonder whether the arbitral tribunal’s power to take into account the counsel behavior when making its orders on costs does not remain one of the best ways to sanction party representatives’ behavior.  This sanction could be included more clearly in the draft rules, as, for example, Article 37(5) of the ICC Rules, pursuant to which the arbitral tribunal, when making it decisions as to costs, may take into account the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner.

The draft rules are to be debated in May during the LCIA Court meeting.  Whether the draft rules will be adopted as they are, and the written guidelines maintained, should be announced then.

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