Digital Dispute Resolution: Opportunities and Challenges

Arbitration and litigation is not quick

Arbitration and litigation is not quick. In England, even small court cases can take more than 1 year to resolve. The average for small claims (£5,000) is currently 51.2 weeks in the English courts. Things are considerably worse in many other jurisdictions – this is a global problem. In Poland, for example, people don’t go to Court because it takes so long; a partner at a large firm told me they have four US$1m+ disputes which have been ongoing for 7 years.

Arbitration is not much better. A typical arbitration of any size will take more than a year to resolve. Why is that? Because in many ways arbitration has aped the common law system – so there are still the stages of statements of case, document production, witness statements, expert reports and a final hearing. Followed by a delay before the award is produced, which can be many more months.

We have lost our ingenuity when it comes to resolving disputes. Arbitration was meant to be cheaper and quicker. It is not.

There are emergency arbitration rules, and also expedited procedures – which are very much to be welcomed. The LCIA has them, so does the ICC and others. But for many cases, they still take too long.

Why is this the way and what is the impact on dispute resolution for businesses?

Dispute resolution is a joy for the lawyers, the experts, the transcribers, dare I say it the arbitrators, and the ecosystem that has built up around the long form dispute resolution process that we follow around the world. But for the users, it is stressful, hugely time consuming and a significant drain on resources.

Technology has been deployed – how to make disclosure slightly less painful, how to better present documents in court, how to help law firms organise their material internally. That is all good stuff, but it is tinkering around the edges. Dispute resolution has not had its technology revolution like industries such as finance. Go into a court room today, and there might be a few more laptops but broadly speaking you would notice little difference from a court room 200 years ago. Again, this is a global problem.

Where this is all particularly acute is with lower value disputes, by which I mean disputes less than US$1m or so. It is very difficult to bring cases of that size in any sensible form.

What is telling is that if you ask most litigators (or arbitration lawyers) whether, if they had their own dispute, they would bring a claim. They would tell you absolutely not. And they would advise their friends not to as well. That is damning of a system from which we make our living and which we espouse as being the best in the world.

The direction of travel is online – what is currently happening?

We are on the cusp of a digital transformation in dispute resolution, in the UK just as much as the rest of the world. That is for a few reasons.

The pandemic opened the eyes of the legal community to the technology. Paperless hearings, virtual hearings, and indeed practising law without a single hard copy book or physical piece of paper. These are all things which we now know are perfectly possible – and many of us are operating that way, including judges and arbitrators.

There is also the impact of AI, which has blossomed on to the scene in the last 12 months.

Some talk of AI deciding disputes – in China that is happening now.

The second most senior judge in this country, Sir Geoffrey Vos is an outspoken advocate for digitisation of disputes and the use of AI.

For now, what AI does is make clear that the direction of travel for disputes is to be move online, to become quicker and cheaper. This is going to happen, whether we are a part of it or not.

I think it is much better for us – lawyers, arbitrators, users of dispute resolution services – to be part of it, than to watch from the side lines whilst someone else does it.