Encouraging Sustainable Practices in International Arbitration
ABOUT THE AUTHOR: Patricia Snell is an associate at Covington & Burling LLP
The Campaign for Greener Arbitrations (the Campaign) – a global movement advocating for environmentally sustainable practices in international arbitral proceedings and day-to-day legal practice – was founded by Lucy Greenwood in 2019.
The need for such an initiative is apparent when one considers the carbon footprint of a USD 30-50 million international arbitration dispute. A case study prepared by the Campaign found that approximately 20,000 trees would need to be planted to offset the dispute’s carbon emissions, with three-quarters of those emissions arising from the long-haul flights typically involved.
Given firms’ and clients’ increased focus on Environmental, Social, and Corporate Governance (ESG) issues, and with the upcoming COP26 UN Climate Change Conference, it is important for arbitration practitioners and other stakeholders to reflect on the steps that they can take to reduce the practice’s carbon emissions. To that end, this blog post discusses sustainable measures put forward by the Campaign, and considers the arbitration community’s response to greener practices.
The Green Pledge
At the core of the Campaign is the Green Pledge – a general commitment to greener practices endorsed by over 600 individual practitioners, arbitrators, law firms, arbitral centres, arbitration service providers, and corporates.
The key principles of the Green Pledge consist of:
- encouraging the use of electronic correspondence and electronic submissions;
- avoiding printing unnecessarily and promoting the use of electronic bundles at hearings;
- encouraging the use of videoconferencing facilities as an alternative to travel, where appropriate (including for the purpose of fact-finding interviews with witnesses and cross-examination of witnesses or experts);
- selecting suppliers and service providers that are committed to reducing their environmental impact; and
- avoiding unnecessary travel and offsetting carbon emissions for arbitration-related travel.
The Green Protocols
Over the past six months, a working group of the Steering Committee of the Campaign (the Working Group) drafted six Green Protocols and a Framework for the Adoption of the Green Protocols (the Framework). The Green Protocols expand upon the key commitments of the Green Pledge by providing detailed practical guidance and recommended best-practices for reducing the carbon footprint of international arbitration. Following a public consultation process with arbitration stakeholders through written submissions and virtual Regional Roundtables, the Working Group formally adopted the Green Protocols on Earth Day 2021.
The Green Protocols may serve as guidance or be voluntarily adopted by parties in whole or selectively and they consist of:
- Green Protocol for Arbitral Proceedings and the Model Green Procedural Order (providing guidance on conducting an arbitration from start to finish in a more sustainable manner);
- Green Protocol for Arbitrators;
- Green Protocol for Arbitral Institutions
- Green Protocol for Law Firms, Chambers and Legal Service Providers Working in Arbitration;
- Green Protocol for Arbitration Conferences; and
- Green Protocol for Arbitral Hearing Venues.
Potentially the most significant Green Protocol (at least from a practitioner’s perspective) is the Green Protocol for Arbitral Proceedings. This protocol addresses methods increasingly used by practitioners such as conducting remote hearings, as well as opting for electronic bundles, and the electronic filing of submissions. It also proposes further sustainable measures, including:
- Considering at the outset of the case whether there is scope for the use of shared technology platforms or case management systems;
- Using electronic platforms and tools for annotating documents;
- Conferring with witnesses and experts using videoconferencing rather than in-person meetings;
- For in-person hearings, engaging local transcribers and interpreters;
- Empowering the tribunal to claim for the cost of carbon offsetting their flights; and
- Agreeing that the cost of carbon offsetting the parties’ air travel may be allocated as part of the costs award.
The adoption of sustainable measures in an arbitral proceeding can further be facilitated by incorporating proposed language from the Model Green Procedural Order into the parties’ procedural order. The Model Green Procedural Order generally mirrors the language of the Green Protocol for Arbitral Proceedings.
Arbitrators and arbitral institutions are expected to play a significant role in leading the charge for promoting more sustainable measures, as they actively adopt such measures in their proceedings and arbitral rules, respectively. The Green Protocol for Arbitrators recommends that arbitrators give due consideration to the adoption of the Model Green Procedural Order or parts thereof, where appropriate. Amongst other sustainable measures, the Green Protocol for Arbitral Institutions encourages institutions to modify their arbitration rules to:
- Remove requirements for hard copies of documents and encourage electronic filings;
- Empower the tribunal to consider the effective use of technology;
- Broadly define the concept of hearings, so as not to exclude virtual hearings; and
- Provide discretion to the tribunal to determine how witnesses and experts may be examined, including by remote means.
The Green Protocol for Law Firms, Chambers and Legal Service Providers Working in Arbitration addresses the day-to-day operations of institutions to conduct their business in a more environmentally conscious manner. Amongst other measures, firms may consider appointing a ‘Green Ambassador’ and adopting an incentives scheme.
The Green Protocol for Arbitration Conferences and the Green Protocol for Arbitration Hearing Venues propose means of reducing energy consumption by opting for renewable energy sources, minimising printing, and encouraging responsible travel. For conferences specifically, event organisers may consider holding virtual or hybrid events and using electronic conference materials.
The arbitration community embraces the Campaign
The global arbitration community appears to have embraced the Campaign whole-heartedly. This was reflected in GAR awarding the Campaign the GAR Award for Best Development in 2020. For the 2021 GAR Awards, GAR went a step further and announced a new “Green” award category – the GAR Campaign for Greener Arbitration Award for Sustainable Behaviour that recognises the contributions of individuals, law firms, or organisations in promoting sustainability. The Campaign has also inspired a similar movement in the litigation context with the recent launch of the Greener Litigation Pledge. More broadly, the legal profession has experienced a shift towards ESG practices as firms embrace measures to reduce their carbon emissions. In late June 2021, a network of law firms launched the Net Zero Lawyers Alliance committing to reach Net Zero greenhouse gas emissions by 2050.
The positive reception from the arbitration community has led to the establishment of Regional Sub-Committees of the Campaign that will be hosting regional events in the coming year. The Campaign also plans to expand the environmental case study on the carbon footprint of international arbitrations. Another initiative in the pipeline involves gathering data on the costs savings for clients when sustainable measures are adopted in arbitral proceedings (including the reduction in flight, hotel, and printing costs).
Looking towards the future
A cultural shift at the institutional and individual level is now well underway. Prior to the global lockdown, one would have struggled to imagine legal practitioners working remotely as the default and attending substantive arbitral hearings virtually. Expedited by necessity, law firms have invested in the digital infrastructure needed to conduct paperless proceedings and virtual hearings. The 2021 QMUL International Arbitration Survey identified an increase in the use of virtual hearing rooms, with 72% of survey respondents using virtual hearing rooms “sometimes”, “frequently”, or “always”. This is compared to the 2018 survey findings in which 64% of respondents reported that they had never used virtual hearing rooms.
Arbitral institutions have also adapted their rules and guidance to reflect the reality of electronic submissions and virtual hearings:
- In accordance with Articles 4.1 and 4.2 of the LCIA Arbitration Rules 2020, the default position is that the Request for Arbitration and the Response are to be submitted electronically, and that written communications are to be by electronic means. Article 19.2 of the LCIA Arbitration Rules 2020 expressly provides that a hearing may take place by conference call, videoconference, or other communications technology.
- The updated Article 26.1 of the ICC Arbitration Rules 2021 expressly provides that the arbitral tribunal may decide that a hearing will be conducted remotely.
- The Stockholm Chamber of Commercial Arbitrator Guidelines provide that all new arbitrations are to be administered on the SCC’s digital platform for communication and file-sharing between the SCC, the parties, and the arbitral tribunal (Section 2, the SCC Platform). The Guidelines also propose that arbitrators may claim as expenses the carbon offsetting costs of their flights (Section 3, Expenses).
- In addition, the Revision of the IBA Rules on the Taking Evidence in International Arbitration, introduced in December 2020, includes a provision (Article 8.2) encouraging tribunals to consider time, cost, and environmental concerns when determining whether an evidentiary hearing should be held remotely.
Now is the time for actions, not words
Arbitration practitioners should consider implementing appropriate aspects of the Green Protocols as a matter of practice. The Framework identifies various factors to consider when assessing the appropriateness of measures, including: the relevant procedural rules, the applicable laws, the burden and costs of implementation, the availability and practicality of electronic resources, the impact on diversity, the cultural expectations of the parties, and the availability of cybersecurity measures. Separately, individuals and law firms should consider committing to the general principles of the Green Pledge. In the words of the Campaign’s slogan, given the urgency of climate change, now is the time for actions, not words.
Patricia Snell is an international arbitration associate at Covington & Burling LLP (London) and a Steering Committee Member of the Campaign for Greener Arbitrations. She is qualified in England & Wales, New York, and Ontario.