At the same time that technology has been empowering the masses with information, arbitration has come in for criticism (fairly or not) as cliquey and shadowy; a private safe haven for commercial men to fight their battles out of the public eye. There has also been the fierce investor-state dispute (ISDS) debate, where the right of private investors to bring arbitration claims against foreign governments on the basis of policy decisions has been questioned.
Whilst public controversy has been at its highest in the investment context, it has also provoked inward reflection in commercial arbitration circles. “Transparency” remains a buzz-word on the conference circuit without consensus as to what it should mean or how much is too little, too much, or about right.
Lord Thomas, Lord Chief Justice of England and Wales, cast attention on an important issue in this context back in spring 2016 when he suggested that the success and popularity of arbitration, combined with a presumption of the confidentiality of arbitration proceedings in English law, had been “a serious impediment to the development of the common law by the courts in the UK”.
The insight is an important one in support of the case for the democratization of arbitration data to go further. Lord Thomas’ point was that there should exist a system of law that offers both clarity and predictability, at the same time as being capable of developing in a principled manner. Put simply, he argues that the development of the common law is hindered if too many important commercial decisions remain behind closed doors.
Other members of the English judiciary have anecdotally recalled occasions where they have decided important principles of law whilst sitting as arbitrator, only to have to wait years for the same question to arise again in a public forum, when the answer can finally emerge into the light of day.
Others reasonably question whether the decisions of private arbitrators, appointed by parties with a wide freedom to choose whosoever they wish, and with little independent vetting of their experience and expertise, should influence the development of the law.
However, there is an arguable case for change. One elegant proposal for shifting the balance, rather than rocking the boat, is to switch the default position in English law from a presumption of confidentiality to a presumption against. This would at least ensure more arbitrable decisions are public and, while not binding precedent, available to assist parties and arbitrators in dealing with and deciding complex and novel legal issues.