In his thought provoking article in the latest edition of Funding in Focus, Sir Bernard Eder offers a number of observations on developments in the litigation process since he was called to the Bar in the early 1970s, some welcome and some less so. As guidance from a recently retired Commercial Court judge, his views will one hopes be taken on board by practitioners.
Sir Bernard’s thoughts led me to think about the ingenuity of lawyers. How many of the developments he identified were really the product of lawyers thinking up ever more inventive ways of gaming the system, with the rules playing catch-up? After all, lawyers are paid to construct arguments that get round legal obstacles, so why shouldn’t they use their skills to get round procedural ones as well?
That said, even I was impressed when I learned of one of the arguments put forward by Russia in its attempts to set aside three arbitration awards made against it in 2014 in favour of the shareholders in the Yukos Oil Company.
As readers may be aware, in July last year an UNCITRAL arbitral tribunal under the auspices of the Permanent Court of Arbitration handed down awards, with an aggregate value in excess of US$50 million, in three parallel arbitrations against the Russian Federation.
The Claimants were the holders of 70.5% of the shares in Yukos. They claimed that Russia, in breach of the Energy Charter Treaty, had indirectly appropriated Yukos, on the basis that Russia had forced it into bankruptcy and then nationalised its oil and gas assets. After several years of proceedings, which included various procedural and jurisdictional challenges, the Arbitral panel found in favour of the Claimants, and awarded damages comprising the value of their shares in Yukos, the value of lost dividends and interest on both.
Russia is now engaged in challenging the awards in the PCA. One of its grounds of challenge is that the awards were substantively written not by the three arbitrators but by their assistant, whom they allowed to become “a fourth arbitrator”.1 This, so the argument goes, amounts to a breach by the arbitrators of their personal mandate, and constitutes grounds for setting the awards aside.
While the argument itself may perhaps be regarded as a paradigm of the inventiveness of lawyers, the grounds on which it is based are even more deserving of that description. Initially, the evidence relied on by Russia was that billing information submitted to the PCA in their administrative function showed that the panel’s assistant spent considerably more time on the substantive aspects of the case than any of the three arbitrators; leading, presumably, to the conclusion that he was doing work that they should have been doing. That, in itself, was not uninventive. But with even more ingenuity, Russia has now produced evidence from a linguistics expert who has analysed the publications and writing styles of the three arbitrators and their assistant, and having applied that analysis to the awards has concluded that significant percentages of sections of the awards were written by the assistant.
Now continuing the espionage theme, one might be forgiven for concluding that this could be straight out of a John le Carre novel. But let’s for a moment consider the implications of it being right. Whether it would or will lead to the Yukos awards being set aside I have no idea, but it may well create a frisson for the judiciary and anyone else who is tasked with making judicial or quasi-judicial decisions.
Would the principle be limited to arbitrations, where the decision makers are expressly mandated by the parties to adjudicate on their dispute, a mandate which it is right that they should not be able to “sub contract”? Or would it extend to public appointees, such as judges, or individuals or panels of individuals discharging an adjudicatory or disciplinary or regulatory function? Judges, particularly on appeals, regularly have the help of judicial assistants and the decisions of adjudicatory bodies are inevitably the product of their members and those assisting them. The line between the work product of those contributing to a decision and the work product of the decision maker is very fine. One can well imagine the linguistic expert trawling through the previous decisions of judges, to try to prove he or she could not have written the one under appeal; not because the judgment was of higher (or lower) quality than was normally expected from the judge in question (which would be, to use words one regularly hears in Court, “a bold submission”), but because the language used was not his or her own. One can imagine a decision of a planning inspector or an SRA or GMC disciplinary panel being subjected to the same treatment.
Nor would it necessarily end there. Would we see disappointed litigants or struck off solicitors or doctors trying to sue the individual or body that had decided against them for breach of contract or misrepresentation or misfeasance in public office? I’m sure the inventive lawyer could draft particulars of claim alleging there was liability for all three, because, so the pleading would say, the decision maker had relied on someone else in reaching its conclusion.
And what about the ghost-written newspaper article or autobiography? A claim might well be made that this Premier League footballer or that Rugby Union international was in truth not the author of something to which he had put his name, with reliance being placed on the speech patterns he had used in TV or radio interviews (or, in happily limited cases, in Court) as being inconsistent what he was purporting to have written; an argument that, based on my own experiences, might be well received.
In one sense, posing these questions arguably demonstrates their absurdity. But, as Sir Bernard says in his article, there was a time in the not too distant past when it was not possible to sue for negligently caused economic loss. One might justifiably say the change in the law to permit that was no more than a reflection of commercial necessity. But there would have been a time when it was considered to be nothing more than the product of the fertile minds of inventive lawyers.
Things may change in the future. But for the present I hope there remains no necessity for the birth of this particular legal invention.
1. Those readers with an interest in espionage will know that the concept of “the fourth man” is one with which the USSR was very familiar, although it took a great deal longer for Anthony Blunt to be identified as the fourth man in the Cambridge spy ring after Burgess, Maclean and finally Philby were exposed, than it did the Russian Federation to point to the arbitrators’ assistant in the Yukos case. Whether history gave the lawyers the idea of running the “fourth man” argument in the Yukos case is anyone’s guess.
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