Guy Fetherstonhaugh QC and Katie Bradford explain how to dispel client fears over perceptions of conflict of interest and bias
Test for bias
If the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the [judge/arbitrator] was biased, then the [judge/arbitrator] should step down.
Reasons include:
- community of economic interest = conflict of interest;
- leaks of confidential information;
- links to party/party representative = bias; and
- unfair influence on party representative.
In the property world, those who decide disputes in courts, tribunals or arbitrations, often know the advocates and expert witnesses who appear before them. A barrister may appear as counsel before a part-time judge who is a barrister in the same chambers. A surveyor may appear as advocate or expert before a surveyor arbitrator who is a long-standing colleague in a specialist area.
Traditionally, property clients understood the structures and professionalism of those engaged in the resolution of disputes, and trusted their judgment. However, international investors and operators new to the UK are sometimes bemused by “the cosy world” here, which differs from practices they are used to. They speculate about “bias”, or “conflict of interest”.
This concern is not restricted to the property sector and, in July 2015, the Bar Council of England and Wales issued an information note addressing perceptions of bias or conflict of interest, where a barrister appears before an arbitrator in an international dispute and the arbitrator is a barrister from the same chambers. The guidance is a helpful reminder that due care must be taken to dispel an appearance of bias or conflict, including in the property sector.
Potential concerns
Judges swear that they “will do right to all manner of people after the laws and usages of this realm, without fear or favour, affection or ill will”. Occasionally, applications are made to judges to recuse themselves from hearing cases, on the ground that they have links to one of the parties, which may incline them towards or against that party, contrary to their judicial oath.
Readers may recollect a recent instance, when Peter Smith J stepped down from a British Airways case, having voiced such irritation at the loss of his luggage after air travel involving BA as to prompt an invitation for him to recuse himself. Applications based on the judge having an actual bias towards a party are more common. The test is whether the judge has a direct pecuniary interest (such as owning shares) in one of the parties, or is otherwise so closely connected with a party that he can truly be said to be judge in his own cause.
Actual bias or conflict of interest is rare. But justice must also be seen to be done. According to the test evolved by the courts, if “the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased”, then the judge should step down.
Sometimes, counsel for one party may have worked alongside the judge in the same chambers for years – and may still do so where the decision maker is a part-time judge, or member of a specialist tribunal.
As with litigation, so with arbitration. The DAC Report preceding the Arbitration Act 1996 noted that it was often the case that one member of a barrister’s chambers appears as counsel before an arbitrator who comes from the same chambers. The committee was quite certain that this should not be regarded, without more, as a lack of independence justifying the removal of the arbitrator.
But clients who instruct counsel from different chambers may yet express concern at a danger of bias. They should be reassured: the few applications that have sought to raise this ground of challenge have all failed. This article explains why, and sets out some practical steps that those practising in niche property fields should consider to address such concerns.
The reasons for challenging a decision maker are summarised in the box to the right. How might they apply where judge and advocate are from the same chambers?
Conflict of interest
The first reason for challenging a decision maker – economic conflict of interest – will rarely be a material concern given the structure of a typical set of chambers.
It is true that barristers usually share premises and support staff, promote the employment of their colleagues, socialise, and hold themselves out as a group sharing special expertise. However, barristers practise individually, despite being members of a set of chambers; are instructed separately on each assignment; and do not share their income or profits. Granted, they do share administrative expenses, but this would rarely be considered sufficient to form an economic community of interest.
Nevertheless, each case should be considered on its own merits. Where the barrister is instructed on the basis of a conditional fee agreement, then whether the barrister will be remunerated, and in turn whether chambers will receive its own administrative cut, will depend on the outcome of the case. So the outsider might have grounds to think that the judge/arbitrator will be improperly influenced towards a decision in favour of his or her colleague.
Wrongful sharing of information
The second ground – wrongful sharing of information – must be addressed by chambers, to prevent accidental or improper dissemination of confidential information, by hard copy and electronic security; discrete clerking; and perhaps a check on casual socialising.
These are routine matters of professional conduct which barristers should be concerned to observe, and able to demonstrate to enquirers.
Comradeship
The third challenge (comradeship) is not of course one that solely or necessarily springs from joint membership of the same set of chambers.
As Rix J pointed out in Laker Airways Inc v FLS Aerospace Ltd [2000] 1 WLR 113 – a case involving an arbitration in which one of the parties appointed as its arbitrator a barrister (now Burnton LJ) from the same set of chambers as counsel instructed to appear for it as advocate – “one barrister may be on better terms with a barrister in other chambers than with anyone in his own set.” The notion that familiarity may colour the tribunal’s judgment is therefore difficult to sustain as a ground for objection by itself.
The authors are aware of challenges on the grounds of friendship between an arbitrator and the expert or advocate of one party. These have all failed. One has to bear in mind the test is would “the fair minded and informed observer” conclude bias is a “real” (not theoretical) possibility.
Currying favour
The fourth reason – currying favour with the judge/arbitrator – is a matter for the professional judgment of the advocate.
For example, it might be said that a fair trial is put at risk where a recorder is the head of chambers of counsel appearing. Anxiety not to offend one’s head of chambers might lead to a reluctance on the part of counsel to stand up to the recorder, to the detriment of the client.
Arguments to this effect were rejected as a general proposition by the Court of Appeal in Smith v Kvaerner Cementation Foundations Ltd [2005] EWCA Civ 1410: they were at odds with the independence of and the high professional standards observed by the bar. It is likely the same approach would apply to a surveyor representative with a senior member of the profession acting as arbitrator – even one who may be on the Arbix interview panel.
Notable advantages
Overall, the fact that the tribunal and counsel may practice together does not afford a ground for challenge to the tribunal. As the Court of Appeal said in Taylor v Lawrence [2003] QB 528: “It is also accepted that barristers from the same chambers may appear before judges who were former members of their chambers or on opposite sides in the same case. This close relationship has not prejudiced but enhanced the administration of justice. The advantages in terms of improved professional standards that can flow from these practices have been recognised and admired in other jurisdictions.”
The position of solicitors is different, for a solicitor who is a partner in a firm of solicitors is legally responsible for the professional acts of his partners and as a partner owes a duty to clients of the firm for whom he or she personally may never have acted and of whose affairs he or she may know nothing: see Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451.
In AT&T Corp v Saudi Cable Co [2000] 2 Lloyd’s Rep 127, the Court of Appeal held that the test to be applied on a complaint of bias against an arbitrator in respect of an award should be no different from that applied to judges and tribunals in respect of decisions made by them in the course of the public administration of justice. Accordingly, the fact that the arbitrator and counsel were from the same set of chambers should not in itself ground an application for removal of the arbitrator under section 24 of the 1996 Act (“circumstances exist that give rise to justifiable doubts as to his impartiality”).
The advantages of arbitration over litigation (ability to choose an arbitrator versed in the subject matter of the dispute; timetable control; flexibility over procedure) should result in increasing demand for arbitration. Where consideration is given to the appointment of an arbitrator from the same chambers as counsel, the following points should be addressed:
- Do chambers have a separate arbitration clerk who will process the arbitrator’s instructions separately?
- Do chambers have an administrative staff experienced in dealing with such instructions and in ensuring no misdelivery of documents or leakage of information?
- Are there arrangements in place to ensure the security and protection of the confidentiality of documents in the arbitration?
- In particular, do chambers have systems that ensure that communications destined for one member cannot be seen by, or come into the hands of, the other member?
Further matters that chambers and clients may wish to bear in mind are set out in the Bar Council information note regarding barristers in international arbitration.
Guy Fetherstonhaugh QC is a barrister at Falcon Chambers and a member of Falcon Chambers Arbitration and Katie Bradford is a litigation partner at Linklaters LLP
