"Truly transnational" independent body needed to enforce ethical standards in arbitration, says ASA

Out-Law News | 16 Sep 2014 | 3:25 pm | 2 min. read

International arbitration needs a "truly transnational body" to oversee ethical standards, appointed by but independent of the major arbitration associations and institutions, the new president of the Swiss Arbitration Association (ASA) has said.

In a post on the ASA's website ahead of a speech he was due to give at a conference organised by the Queen Mary University of London's Institute of Regulations and Ethics, Elliott Geisinger said that such a body could be made up of appointees from each of the participating associations and institutions. This committee could then have the power to apply "rules of professional ethics that it deems relevant and applicable", he said.

The ASA has previously been critical of moves by the arbitration community to formalise its approach to party representation and counsel ethics, with previous president Michael Schneider calling proposals by the International Bar Association (IBA) that tribunals should penalise counsel misconduct as "yet another opportunity to waste time and money on procedural skirmishes". At the conference, Geisinger said that his proposals have been formally adopted by the ASA, according to Global Arbitration Review.

International arbitration expert John Gilbert of Pinsent Masons, the law firm behind Out-Law.com, said that Geisinger's proposal was "the most innovative to date".

"The proposal is a challenging addition to the ongoing debate in the arbitration community regarding the application of a common standard of ethics," he said. "The issue is receiving a great deal of coverage at the moment with many different solutions being suggested."

"Personally, I would welcome a greater focus on the problems that the solutions are intended to address, because that must be the first step towards designing an effective solution. Moreover, it would help to avoid giving the impression that the current focus arises from a weight of problems to the detriment of the reputation of arbitration as an effective means of resolving disputes," he said.

The IBA's Guidelines on Party Representation came into force last year and were the first ever formal guidance aimed at establishing standards for counsel acting on behalf of parties to arbitration. Next month, new rules governing London Court of International Arbitration (LCIA) arbitrations will take effect, which have guidelines on the conduct of parties' legal representatives included as an annex to the rules.

However, the ASA is concerned that the IBA's and LCIA's approaches, under which the guidelines are enforced by the arbitral tribunal itself, "puts into the hands of arbitral tribunals the power to decide on matters relating purely to ethical (or unethical) conduct of counsel", Geisinger said in his post. He also said that there were concerns about the "excessive breadth" of the IBA's guidelines, as well as the risks of "fragmentation" between different sets of rules.

"It would be extremely valuable to have a set of truly core principles … of counsel ethics, if only because this would enable parties or other participants in proceedings who are faced with offending lawyers to refer to a truly recognised text of narrow but clear principles instead of 'generally accepted best practice' or the like," he said.

"The idea is not to create yet another set of rules that would compete with, for example, the IBA Guidelines. The approach would be to collect what each participating association and institution considers to be part of 'truly international public policy' for counsel ethics, and then to retain only those principles that are common to all. Such a set of core principles could probably fit into one or, at most, two pages and may well not be far from what is found in the Annex to the LCIA's new Arbitration Rules," he said.

The new ethical principles would not overrule any statutory rules, or rules that apply to counsel by virtue of their membership of any bar association or professional association, Geisinger said. The issue sanctions was "open", and could include giving the committee the power to issue warnings and formal reprimands, or "more severe penalties that would need to be defined", he said.