THE AUTHOR:
Georg Scherpf, Head of the Arbitration in Germany and part of Clyde & Co’s Global Arbitration Group.
Paul Verhoeven’s classic 1990s movie Total Recall tells the story of the construction worker Douglas Quaid (played by Arnold Schwarzenegger), who finds himself incapable of distinguishing between his real experiences and those that are the result of a memory implant that he purchased from a company offering a fantastical adventure on Mars. The title of the movie Total Recall has somewhat of a double meaning. The first meaning being the total (full) recollection of events (or experiences, i.e., the implants) and the second meaning being the recall of a faulty product. The recent International Chamber of Commerce (ICC) Commission Report on “The Accuracy of Fact Witness Memory in International Arbitration” (“ICC-Report”) does not go as far as to ask for a “total recall” of witness evidence in international arbitration but has issued several recommendations on how to assist witnesses in their “total recall” of events.
The ICC-Report has extensively reviewed the distorting factors on witness evidence, outlined what can be done to preserve the accuracy of witness testimony and how to properly balance it against these influences. This article summarises and comments on the main findings of the ICC-Report from a practitioner’s perspective and raises some red flags for in-house and external counsel when it comes to the preparation of written witness testimony. It also points out some of the most prevalent misperceptions of the functioning of human memory.
Witness Testimony in International Arbitration
Witness evidence in international arbitration can be used to fill gaps in the paper trail, to support or explain existing documents or simply to “set the scene” by providing background information. The overall objective is that the tribunal gains additional insight into the relevant facts of the case for its deliberations and ultimate decision. Today, international arbitrations rarely come without witness testimony.
In contrast, civil law jurisdictions tend to give greater value to documentary evidence. Moreover, in many civil law jurisdictions, statements of a party to the proceedings (including its directors, managers or employees) are usually not even treated as evidence as such.
On the other hand, submitting witness testimony of a party, its directors, employees etc. is not only admissible but very common in international arbitration. It is also good practice in international arbitration that counsel interview witnesses and assist in the preparation of the written statements to provide clear and concise testimony. Counsel who are not prohibited from coaching witnesses for the hearing (e.g., in the US) often go to great lengths to prepare the witness for their day in court. English solicitors are, on the other hand, restricted to familiarising the witness with the (arbitral or court) process of cross examination.[1] In civil law jurisdictions like Germany, the rules are less clear, safe that counsel may not purposively ask the witness to mislead the tribunal or court (which would constitute a criminal offense). The lack of professional conduct rules in civil law jurisdictions relating to the interactions with witnesses is not surprising, given the preponderance of documentary evidence in civil procedure and the sceptical view taken more generally on the importance of witness evidence. In this context, it is also worth mentioning that tribunals should try to level the playing-field regarding the interaction with witnesses when counsel come from different jurisdictions.
Considering the close interaction between counsel and witnesses in international arbitration and the possibility to submit witness statements of the parties also, witness evidence has in recent years been criticised as unreliable, polished by counsel, and rarely relied upon by tribunals in their awards. The alternative would be direct evidence, as some have suggested, but that is often not feasible or indeed even inefficient in technically complex proceedings. Against this background, the ICC-Report sets out its findings and recommendations regarding the use of witness evidence in international arbitration. But let us first start with our expectations and general (mis)perceptions.
Our Expectation and How Human Memory Works
The situation that Douglas Quaid (aka Arnold) finds himself in Total Recall, is not as unusual as you may think when looking at how human memory works. Human memory, from what we know, is impacted heavily by our biases, by our perspective at the time the memory was created, or by information that we processed before, during and after the event. It is “fluid and malleable, being constantly rewritten whenever it is being retrieved” (See, Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3650 (Comm) (Leggatt J, as he then was)).
Those of us who look for absolute truth or ultimate accuracy in witness evidence will therefore be ultimately disappointed when actually dealing with witnesses. There are many distorting factors that shape our memory already when the event we experience is “encoded”. The latter psychological terminology (“encoded”) also suggests that the human brain does not work like a tape recorder but rather stores information which are enriched and shaped by our perspective at the time of the event, our stake in it as well as all our past experiences and biases. Our memory does not come with a source code clearly labelling what this or that memory is based on and how it may have been affected by extrinsic or intrinsic factors. Moreover, every time our memory is retrieved, it is enriched, diluted, or simply changed by the information that we have processed in the meantime – it doesn’t get better the more we think or talk about it. In fact, certain information or interactions can even create new memories that were never there before. In all, human memory is a very fragile creature, and it is the job of the counsel to discern the minimum objective content whilst excluding possible distorting factors as best as possible.
So, if you are looking for “the truth” in the sense of a complete and accurate representation of facts, written statements or witness testimony will not get you far. However, if you see it as a piece of a puzzle, it can be an essential tool in the evidentiary toolbox that arbitration offers – in particular if tested thoroughly by cross-examination and against the case record.
ICC Report – The Accuracy of Fact Witness Memory and International Arbitration
The ICC-Report specifically looks at unintentional distortions and inaccuracies as opposed to deliberate efforts to mislead. To begin with, the ICC report clarifies that, although witness memory is invariably imperfect, “it does not mean that their testimony is not valuable or at times vital” (ICC-Report, Section 1.29) to the arbitral process.
The main distorting factor identified by the report is the exposure of a witness to Post Event Information (“PEI”). Such PEI can be anything from reviewing new documents or press reports to talking to colleagues, counsel, or co-witnesses. The ICC-Report quotes existing psychological research which states that such “misinformation doesn’t just alter details in our memory, it can add information to memory that was never there in the first place” (ICC-Report, section 2.5) – so back to Douglas Quaid (aka Arnold). This is particularly critical in international arbitration as there is often more than one witness testifying on the same or overlapping events. Exchanges between witnesses can easily lead to “memory conformity” effects. Studies suggest, as referenced in the ICC Report, that exposure to PEI can even overwrite existing factual memory. This “conformity effect” is essentially the standard operating procedure of human memory. Our memory will always look for conformity and consistency and would even override actual (accurate) memories if there is other overwhelming (extrinsic) information available that challenges such conformity. In simple terms: the human brain simply wants to make sense of it all.
In order to determine whether these existing psychological findings (derived primarily from studies relating to criminal cases) equally apply in a commercial setting, the ICC Commission asked psychologist Dr Kimberley Wade (University of Warwick) to conduct a witness memory experiment. The experiment showed that in a commercial context, witness memory is as susceptible to similar distortions and influences as in the criminal context – all minds work seemingly alike.
The report concludes, however, that simply reducing these distortions (i.e., interactions) with a witness may not be feasible, as such interactions are often necessary to discover the full facts of the case and efficiently prepare hearings. Besides the recollection of events, factual witness statements in international arbitration also serve the purpose of providing context and explaining technical issues and/or documentary evidence. The ICC Task Force therefore opted for differentiated recommendations in which it proposed various possible steps to “preserve witness memory” and “reduce distortions”. The recommendations were structured as follows:
a) In-House Counsel
In-house counsel are encouraged to establish procedures – both within their department and also more generally within the company – for keeping contemporaneous written notes of events as they unfold. When it comes to an arbitration, in-house counsel should point out the importance of the witnesses’ own recollection before bringing them into contact with external counsel. Witnesses should be interviewed one-by-one and not in a group. Outlining the overall trial strategy to the prospective witnesses should be avoided. Also, witnesses should be discouraged from discussing their testimony with other witnesses.
b) External Counsel
External counsel may assist in-house counsel by going through the following steps:
(1) Interview
Witness evidence should be collected as early as possible to avoid a dilution of memory. At the outset of the witness interview, counsel should remind the witness that it is normal to have forgotten details and to differentiate between their own recollections and what they may have heard from others. It should be made clear that, whatever the witness says in the interview, does not have any personal consequences (with criminal liability being the limiting factor). It might also be helpful to point out some of the above-mentioned psychological influences to the witness, so that they can critically reflect on their own recollections.
During the interview, counsel should ask unbiased (and open) questions that allow the witness to freely elaborate without any sense of direction. Psychologists call this process “reinstating the witness in their own memory”. Counsel should avoid giving feedback to answers – as these are mostly biased – and, if possible, avoid showing post event sources or documents. Inaccuracies can even be intensified by putting questions to the witness with qualifying descriptors – e.g., “Do you frequently eat chocolate”. At the end of the interview, counsel should advise the witness not to discuss their testimony with co-witnesses or colleagues although this might not always be possible in complex cases.
(2) Assessing Information Provided by the Witness
Counsel should be mindful of the time that has lapsed between the actual events and time of the witness interview and test the accuracy of the statements by cross-checking with other witnesses or documentary evidence. When assessing the information, preceding discussions of that witness with in-house counsel, co-witnesses or other colleagues should be considered (misinformation and memory conformity effect). The position of the witness and their responsibilities within the company should also be factored in (stake in the evidence).
(3) Preparation of the Witness Statement
It is recommended to provide written questions either before or after the interview to allow the witness to answer on their own terms. Giving the witness an opportunity to prepare their own drafts, if capable, considering language and drafting skills. Numerous discussions and drafts/revisions of the witness statement should be avoided. When drafting or polishing the written statement, counsel should preserve the witnesses’ “own voice”. The witness should generally and where possible be discouraged from reading other witness statements or submissions.
(4) Preparation for the Hearing
Counsel should carefully consider to what extent witness preparation is permitted under the applicable professional conduct rules and/or the rules independently agreed or set in procedural orders. The ICC-Report also refers to the guidelines described above for the witness interview when conducting witness preparation for the hearing.
(5) Identifying Distorting factors and Weighing Testimony
The ICC-Report encourages all participants in an arbitration to educate themselves to better understand the distorting factors on human memory, such as the “misinformation effect” or “memory conformity effect”. Moreover, especially external counsel should train themselves to conduct cognitive interviews (e.g., reinstating the witness mentally in past events, encouraging active participation etc.). Training and education are also crucial to reduce wrong perceptions of witness memory.
Comments on the ICC-Report and Some Prevalent Misperceptions
In practice, distorting effects can particularly arise when witnesses are interviewed in the presence of in-house counsel, superior managers, or other witnesses. This can tempt the witness to try to fill gaps to seemingly “help” their company and employer, by providing the “best possible” witness testimony.
From a practitioner’s point of view, it is essential to point out that filling gaps (even unconsciously) often leads to inconsistencies in witness statements which are then brought to light in a thorough cross-examination. Providing an honest testimony is the best assistance to external counsel and the in-house department. Ideally, witnesses can review and refer to their written contemporaneous notes, emails, or memos to minimise distortions and allow counsel to assess the veracity of the information provided. Caution should also be exercised when providing fact witnesses with the parties’ submissions or excerpts of those submissions. In practice, witnesses often want to know what their company is arguing in the case and get into the details. The exposure to this information should be kept to a minimum.
It is equally important to interview witnesses with an open mind and conscious of the potentially distorting factors. Witness interviews should be conducted by experienced attorneys and not “outsourced” to junior associates all on their own, who may be eager to obtain “advantageous statements”.
Providing written questions before the interview has proven helpful in practice, allowing the witness to answer the question on their own terms. Especially in complex technical arbitrations it is not always possible, as recommended by the ICC-Report, to avoid showing the witness documents or indeed to liaise with co-witnesses. Overly polished written statements and overly prepared witnesses, where permitted, often harm the credibility of the witness. In practice, it is important to convey to “keen witnesses” that they should only provide their recollections and not attempt to help their employer by filling gaps, making assumptions, and reading up on past events.
The ICC-Report provides welcome guidance and encourages all stakeholders to educate themselves about distorting factors and witness memory more generally. Distorting factors harm the arbitral process, and it is in everyone’s interest to preserve witness testimony and minimise distortions. The ICC-Report has also addressed common misperceptions about witness memory, which nicely illustrate the need for education and training. Here are two particularly common ones:
a) Detail is not a Proxy for Accuracy
Many counsel and arbitrators think that a witness who can recall peripheral detail is especially reliable and has good memory. However, psychological research suggests that there is no link between peripheral detail and the accuracy of the relevant other statements. The ICC-Report points out:
“‘[…] research suggests that witnesses who include a high volume of peripheral detail in their memory reports are perceived as more credible than witnesses who provide few peripheral details (e.g., Wells, Leippe, 1981). […] Of course, such trivial and peripheral detail in a witness’ testimony tells us little about how accurate their accounts really are. But this trivial information is persuasive, and we all have a tendency to think ‘people who recall trivial details have a really good memory’. Training would help all participants have a better appreciation of their own biases and perceptions with respect to a witness’ memory.” [Emphasis added] (FN 24 ICC-Report)
b) Confidence is not a Proxy for Accuracy
The studies conducted by a team around William Hirst on so called “flash-bulb memories”, illustrated that even recollections of traumatic events (in this case the attacks of 9/11) vary over time but the confidence of witnesses in the accuracy of their recollection – also in relation to peripheral details – remained high. In other words, counsel will always have to question the confidence of the witness in certain events, cross-check with documentary evidence and challenge the witness through a series of questions. Just because the witness thinks that they remember events well (perhaps because of “flash-bulb memories”) does not necessarily reflect the true state of things.
Conclusion
Do we need a total recall of witness testimony in international arbitration? Probably not. But we certainly need to learn how to deal with it in better ways and be very conscious of the distorting factors. We should also begin to “[…] absorb the lessons of a century of psychological research into the nature of memory […]” (See, Justice Leggatt in Blue v Ashley [2017] EWHC 1928).
Coming back to the classic Paul Verhoeven movie Total Recall and Douglas Quaid (aka Arnold) being implanted with a fake memory. That, as we have seen, is not necessarily science fiction, but – in a way – already a reality: In fact, it is all too easy to get a witness to confirm information or even “remember” information that was never there in the first place by guiding the witness through leading questions, presenting post event information, and failing to reduce distorting factors.
The movie is based on the 1966 short story called “We Can Remember It for You Wholesale”. This title even better encapsulates the ICC-Report’s essence: that it is all too easy or “cheap” to remember events for a witness and that we as counsel must work hard to avoid exactly that and to obtain only reliable and helpful witness testimony that safeguards the integrity of the arbitral process. To repeat the ICC-Report: “although human memory is in invariably imperfect, it does not mean that it is not valuable or even at times vital to the arbitral process”.
ABOUT THE AUTHOR:
Georg Scherpf is Head of the Arbitration Team in Germany and part of Clyde & Co’s Global Arbitration Group. He advises both private and State parties on complex arbitrations and cross-border litigations. His commercial arbitration work covers a broad range of legal issues and sectors including international trade (CISG), corporate disputes (joint venture and post M&A) and energy (particularly offshore wind). His public international law experience includes advising clients in relation to bilateral investment treaties (BITs) and multilateral investment treaties including the Energy Charter Treaty (ECT). He has acted for investors in several complex treaty cases (ICSID, UNCITRAL and ad hoc) relating to infrastructure and energy investments in Spain, Czech Republic, Albania, and Germany.
[1] Stricter standards apply for solicitors in criminal proceedings R v Momodou [2005] EWCA Crim 177, [2005] 1 WLR 3442, [2005] 2 Cr App R 6. Caution must nevertheless also be applied in civil proceedings, see Ultraframe (UK (Ltd v Fielding [2006] EWHC 1638 (Ch).
