Capital is a business consulting firm that was founded by Ula Cartwright-Finch, a former lawyer at Linklaters and Herbert Smith Freehills with a PhD in cognitive neuroscience. The report named “The Usual Suspects: Deciphering Decision-Making in Arbitrator Selection” was presented at the ADR in Asia Conference organized by the Hong Kong International Arbitration Centre (HKIAC) in October 2023. The report endeavors to analyze biases inherent in the process of selecting arbitrators. The key take away of the report is that the typical process parties and their counsel go through when selecting arbitrators is at times not very systematic, influenced by dated traditions and therefore susceptible to biases.
The report analyses that the current process consists of five steps. The process starts with creating an “ideal profile” for the right arbitrator. As the second step, decision makers typically carry out an “initial search”, i.e. they create a list of possible candidates. According to the report, this step is particularly prone to biases. Typical selection processes include simply writing down names from the top of ones head (referred to as “mental rolodex approach”, one interviewee being quoted in saying “It’s very ad hoc; you think of names off the top of your head”); this step further includes questioning colleagues or the firm’s network or referring to external lists (i.e. guide books). It stands to reason that this step is influenced by psychological effects such as availability heuristics and anchoring. But the person one sees most frequently on LinkedIn or at conferences is not necessarily the most suitable arbitrator. The third step is described as a “due diligence” with regard to the candidates previously identified. Such due diligence can, again, include feedback from colleagues, online researches or candidate interviews. As the fourth step, the report identifies the “final shortlist”, finally followed by the ultimate selection.
The Report recommends, in essence, to leave the conventional path and make room for a more systematic and structured approach. An important aspect of the proposal is to de-bias the selection process by making it more conscious. Recommendations include to systematically separate the step of profiling from the selection process, e.g. by putting the required profile in writing before thinking of names. A further recommendation is to use varying points of contacts for information. Another helpful recommendations is to increase one’s efforts to get to know different arbitrators rather than to repeatedly rely on the same “stock” of arbitrators. The report also recommends to carry out a “diversity check” as a separate step, i.e. checking the short list of arbitrators in order to establish whether the listed candidates show similarities in gender, nationality and age.
The Report is a welcome and needed step towards a more systematic approach to arbitrator selection. It is worth noting, however, that certain traditional practices, such as appointing “known suspects”, are not per se unhelpful but have a certain raison d’être. After all, it is a legitimate interest to have case decided by decision makers who are “up to the job”. The report, however, is mindful of this very fact. It quotes one interviewee in saying “We want practical experience of someone and whether or not they’re sensible because it’s ultimately a business and why would a client take a risk?” Personal familiarity as a decision criterion must therefore not automatically be equated with prejudice or bias. The report therefore is mindful of the fact that the choice of arbitrators is ultimately a decision to be taken in the best interest of the client (which primarily consists in winning the case). Having said so, it can be seen that clients, i.e. the users of arbitration, increasingly expect the legal industry to integrate diversity and inclusion into the provision of their services. There is no reason why this development should not affect arbitrator selection.
