Maximizing the use of experts in international arbitration

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International arbitration is a melting pot in which the mix of different legal cultures is not always very homogeneous.  Large Anglo-Saxon law firms—Big Law—still enjoy a dominant position in the international arbitration market.  And this dominance is such that certain procedural practices typically used by litigators in common law jurisdictions have permeated and are now mainstream in international arbitration.  Party-appointed quantum experts, for instance, are nowadays ubiquitous in the adjudication of international disputes.  This practice, however, is not immune from criticism even in cases in which the presence of partisan experts may be warranted to help the tribunals award just compensation.

Arbitration users in continental Europe and Latin America are often concerned that the financial dependence of the experts on the party that appoints them could be the cause of the frequent and extreme gap that separates opposing quantum testimonies.  Other critics highlight the fact that the experts’ excessive partisanship, when coupled with the tribunals’ struggle—or failure—to assess expert testimony, could entail a high risk of unfair adjudication that frequently results in awards that do not adopt the experts’ recommendations and simply “split the baby.”  Thus, for reasons of fairness, cost, and efficiency, many of the critical voices advocate in favor of using neutral tribunal-appointed experts over partisan experts.

Research on the role of quantum experts in investment arbitration shows that the proposal to prefer neutral experts over party-appointed experts largely misses the point because while the latter appear in the quantum phase of every award examined, the former are rarely used, if at all.  Serious empirical studies also show that quantum experts are developing a sort of “repeat-players’ game” in which a few individuals, associated with even fewer firms, concentrate all of the appointments.  Interestingly, the data available from investment arbitration cases shows that the experts, irrespective of their repeat-player status, seldom manage to dictate the awards’ monetary outcomes.  In fact, the tribunals that hear investment cases award damages in a very conservative manner—less rather than more—and only rarely “split the baby.”  

While experts have little to gain from exaggerating their clients’ claims and the lawyers from encouraging such type of behavior, the so-called “battle of the experts” persists in more recent cases.  At the same time, the fees payable to the experts remain a very significant portion of the clients’ bill.

Our guiding principle at Victoria Associates is to accomplish our clients’ goals in every case and to do so at the lowest possible cost.  One way in which our lawyers honor this principle is by relying on a wealth of collective knowledge and experience navigating the procedural complexities of past cases to tailor successful strategies for the efficient use of quantum experts in future cases.  Our lawyers are knowledgeable about damages issues and will do a significant portion of the groundwork that larger firms typically entrust to the experts. 

This allows Victoria Associates to provide better legal advice to the client and better instructions to the experts with whom we work.  In the aggregate, this approach ensures that the quantum phase of an arbitration is conducted in a manner that maximizes the role of the experts we appoint and increases the overall chances of success for our clients.

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