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Keeping Up with Access to Justice in Arbitration? A Critical Analysis

by Sara Hourani, Leonardo de Oliveira

July 2020

Access to justice is a concept that has not been coined under a single definition, but which can be understood as one’s right of having access to go to court and having a fair hearing. Access to justice has been adopted as a fundamental right in numerous jurisdictions around the world. For example, Article 6 of the European Convention on Human Rights provides that each person has the right to a fair trial. According to the renowned study on access to justice conducted in the late 1970s by Cappelletti and Garth it was found that one of the ways to enable more accessibility to justice is to make such access cheaper and more effective.1)  Cappelletti and Garth considered that access to justice would be enhanced by offering people alternative forums to the traditional court system. They stated that turning to arbitration was part of a third wave of access to justice that would improve having such access.

Since the publication of Cappelletti and Garth’s findings the practice of carrying out dispute resolution through arbitration has grown extensively. Arbitration is now the primary method of dispute resolution for disputes that were traditionally resolved in litigation. This is the case for instance for international commercial disputes that normally take place between large multinational corporations. However, the practice of arbitration has expanded beyond the resolution of commercial disputes. The use of arbitration in some of these situations, especially where there is inequality in the bargaining position of the parties, might pose issues to having adequate access to justice. Therefore, questions about the degree to which arbitration provides adequate access to justice are ensuing.

Taking the example of employment disputes, the imposition of arbitration clauses in employment contracts can lead to the restraint of the employee’s right of access to justice. The limited negotiation power that an employee has when agreeing to a boilerplate arbitration clause takes away from him or her the right of access to litigation proceedings. This of course does not mean that the employee has waived off all of their rights to have adequate access to justice to resolve their dispute with the employer, but would still place certain limitations on this right. Such limitations can relate to the higher cost of the proceedings for example.

Moreover, looking into ways and mechanisms on how to ensure better access to justice for Investor-State Dispute Settlement (ISDS) are currently on the agenda. In the ground-breaking CJEU case of Slovak Republic v Achmea,2)  it was held that the inclusion of arbitration clauses in intra-EU BITs is incompatible with EU law. The traditional system is undergoing major reform as a result of criticism addressed against it for lacking sufficient legitimacy and fairness.

Access to justice has been expanding via the internet and emerging technologies. Online dispute resolution (ODR) has started from being used by e-commerce companies such as Ebay and Paypal to being adopted by state courts such as in England and Wales and British Columbia for low value claims.3)  The EU has also adopted Regulation No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes. The use of ODR and ICT-facilitated arbitration is now attracting increasing interest for the resolution of commercial disputes. The Covid19 pandemic has partly contributed to the acceleration of this interest as conducting arbitration virtually has become common practice. New technologies such as blockchain technology for example are being introduced for the facilitation of arbitration procedures that could potentially improve access to justice for certain low value trade disputes for instance.

The benefits of using technology for the conduct of arbitration proceedings are that users can have access to remedies in a more efficient, timely and convenient manner.4)  Furthermore, technology contributes to the reduction of the costs of the proceedings for the parties which helps guarantee better chances of access to justice to the parties. There are current legal and technical limitations to technology-based arbitration procedures of course that can affect the parties’ access to justice.

It is clear that as the practice of arbitration keeps evolving, it is essential to observe the extent to which it should secure access to justice. The finality aspect of the arbitral award means that it can only be challenged on very limited grounds. Thus, as the effect of settling disputes by arbitration is the same as that of court judgements, securing fairness in such procedures is vital to the survival of arbitration. Growing distrust in arbitration as a mechanism for dispute resolution would impact its efficiency as such a mechanism. It is important to ensure that arbitration is maintained as a fair, trustworthy and sustainable dispute resolution method to ensure its success. If arbitration is to continue to grow in parallel to litigation, it must certainly need to guarantee access to justice. For a deeper analysis on this, see our forthcoming co-edited book titled ‘Access to Justice in Arbitration: Concept, Context and Practice’ to be published by Wolters Kluwer.

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References:

1) Mauro Cappelletti and Bryant Garth, Access to Justice: The Newest Wave in the Worldwide Movement to Make Rights Effective, 27 Buffalo Law Review, 181 (1978).
2) Case C-284/16 (CJEU, Judgment of 6 March 2018).
3) See Amy J. Schmitz & Colin Rule, The New Handshake: Online Dispute Resolution and the Future of Consumer Protection (American Bar Association, 2017). Also see Ethan Katsh & Orna Rabinovich-Einy, Digital Justice: Technology and the Internet of Disputes (OUP, 2017).
4) Amy J. Schmitz, “Drive-Thru” Arbitration in the Digital Age: Empowering Consumers Through Binding ODR, 62 Baylor Law Review 178 (2010)

 


Sara Hourani is an Associate Professor (Senior Lecturer) at the School of Law, Middlesex University London. Sara also currently holds a Visiting Lectureship at the University of Aix-Marseille (France). Sara received an LLB degree from Grenoble II University (France), an LLM in International Trade Law and a PhD in Law from the University of Essex (UK). Sara was granted the prestigious UK Arts and Humanities Research Council (AHRC) PhD scholarship to pursue her doctoral studies and has been the recipient of different grants and awards to carry out her research. Namely, Sara was a John W Kluge Scholar at the Library of Congress in Washington DC which was funded by the AHRC to carry out research in international commercial law.

Leonardo de Oliveira

Leonardo V P de Oliveira is a Lecturer in Law at Royal Holloway, University of London. He has a PhD and LLM from University of Essex and he is qualified lawyer in Brazil.

The views expressed by authors are their own and do not necessarily reflect the views of Resourceful Internet Solutions, Inc., Arbitrate.com or of reviewing editors.
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