Talk given at the conference “The promise of hybrid dispute resolution fora” held in Doha on 18-19 November 2018.
Before I get going, I’d like to say that this is a paper I have prepared with a co-author, Clément Bachmann, of the University of Geneva, although he is not with me today.
We get trained in ways of seeing things. And then we see in only those ways. We get trained in ways of believing things. And then we believe in only those ways. We get trained in being selective. And then within our selection we move, and think, and plan, and build. Our world is made within and according to these formulae. Beyond this vision, we see little.
And so we continue to write the history of our future with the same ideas. It has been two decades since the remarkable potential of investment arbitration has been discovered, and how it mainly benefits certain social actors, to the detriment of others. It has been even longer that notions were first explored, for instance by Dezalay and Garth, of how the extraordinary development of arbitration was driven by legal entrepreneurs working primarily for themselves, to the detriment of others.
Yet, we are not terribly far into understanding how this future will work. We still look at these questions of growth and opportunities and jurisdiction and professional specialization with the same lens that our fathers and mothers used; we ask the same types of questions about private autonomy and the need for dispute resolution services; the same actors have the same significance; nothing much has changed in the story we tell, in the story we see.
My aim this morning is to sketch a different perspective. To recall a story less often told. A story that ask different questions. Questions about possible limits to private autonomy. Questions about possible limits to how much territory our industry can conquer before legitimacy concerns hit back. Questions about the way we understand and assess the evolution of our field.
But first let me say the usual few words of deserved self-congratulation we all need. As a community, as members of the arbitration community, we are, in many ways, quite tightly knit. We tend to think alike. We tend to have the same values. We tend to come from the same background. We tend to come from the same schools and go to the same sort of bars and restaurants and conferences and lectures, where we exchange the same sort of ideas. And we shine happily when we realize that, yes, we are still very much in agreement. How good it is to be in the company of fellow souls!
But wait, actually. What feels comfortable is perhaps, in fact, not a good idea. Perhaps we shouldn’t all think alike all that much. Hmm. How to know?
As with all deep thoughts about ourselves, we should consult a psychologist. In this case a social psychologist. And indeed she may have an opinion on this. Indeed, social psychologists do have a view about this, a theory called ‘groupthink’.
Groupthink essentially says that, if we are too much all alike and think too much alike, this leads us to feel somewhat invulnerable, unwarrantedly of course. And so we think, for instance, that arbitration is there to stay, once and for all, that private or semi-private dispute resolution is there to stay, at least at the level we have it today. We think like this because we don’t challenge one another’s ideas quite often enough. Most of the time we only nibble at the edges. We focus on technical adjustments.
Yes, the landscape of international dispute resolution is changing. Today, a new instrument is on the table, and it is new and exciting and revolutionary and perhaps we can get a career in it. But rather than, or perhaps in addition to, marveling at this innovation and haggling over cosmetic amendments, let us think for a moment about how we approach these changes, about how we look at them in the first place.
And here is groupthink again. Groupthink informs the way we assess the evolution of dispute settlement mechanisms. Our perspective often remains narrow. Our eyes are fixed on our values and interests, and on how they might be impacted by these changes.
No, no, no, enough, you may say! Obviously the authors of this paper are not aware of all the conferences on arbitration and human rights, arbitration and the environment, and what have you! Well, quite. But, frankly, it does appear that public and third-party interests are only taken into account to the extent that it is deemed necessary to deflect criticism: put brutally, we are willing to consider other values and interest as far as we expect that this may influence the perception of those actors whose support we actually need.
And why should it be otherwise? Why should “the rest” be our problem? Let us not go, just here and just now, into the proposition that we have a collective responsibility towards society at large in our capacity as citizens, as lawyers. Arguably we are lawyers and not merely businesspeople. Law was never meant to be merely business. But this start to sound seriously unenjoyable, so let’s not go there. Then again, we probably do have to admit that we have at least a responsibility to keep our field, our industry, sustainable. For our students, for our tutees, for our metaphorical children, and for ourselves if we are not close to retirement or indeed if we don’t quite know what that word means.
And so, can we be unqualifiedly content with our narrow perspective? Are we, the arbitration community, good, safe in the long run, if we preoccupy ourselves only or mainly with various forms of economic and financial positives?
The point is simple, well known, and the subject of many discussions at, precisely, arbitration conferences: should we not be extremely cautious that the increasing backlash against investment arbitration will not spill over into all other forms of arbitration, regardless how lucrative investment arbitration may be in the short run? If we suggest dispute resolution developments which primarily promote the economic interests of certain categories of the population, we may well be building increasing resentment against what we do, thus increasingly likely pushback and backlash. No, we are not safe in our industry.
So how to think about this whole problem? Perhaps notions of legitimacy might help.
Two notions of legitimacy, to be precise. Substantive legitimacy and rhetorical legitimacy.
Substantive legitimacy asks a simple question: who benefits from a given dispute resolution mechanism, from a given development in dispute resolution mechanisms? And so it also helps understand how changes impact interests and values of all affected actors.
Before we turn to rhetorical legitimacy, let us introduce another idea: perceptions of legitimacy. The idea is simple: what is perceived as legitimate will be supported by those who perceive it as legitimate. So now, what makes one perceive, in the current case, that private dispute resolution, from arbitration to hybrid dispute resolution fora, is legitimate?
Perceptions, of course, may be based on substantive legitimacy. Something may considered legitimate by someone because the something is substantively in line with what the someone wants. Fine.
But another form of legitimacy may play a decisive role in perceptions: enter “rhetorical legitimacy”. We may perceive something as legitimate because it ‘sounds good’, in the sense that it is rhetorically convincing. This would be the case, for instance, if the object in question mobilizes symbols of ‘goodness’, of acceptability, of justice. It is, if you will, a symbolic form of legitimacy. Rhetorical legitimacy is easily a tool. A powerful tool, which consists in mobilizing symbols to boost, or to undermine, the support granted to an institution.
Let us return to groupthink.
What groupthink typically leads us to do, is to consider our interests and values through the lens of substantive legitimacy, and other interests through the lens of rhetorical legitimacy. We assess whether developments – such as the hybridization of international dispute resolution – benefit our community and where the answer is yes, we work on advertising them, framing these developments in a way that will make them appear attractive to larger audiences.
Yes, I have said that rhetorical legitimacy is easily a powerful tool. But it may be a dangerous tool too. Rhetoric certainly works well in the short-term. In the longer term, however, if perceptions are not aligned with reality, backfire is to be expected.
Let me repeat a point I made a minute ago: if we suggest dispute resolution developments which, regardless how appealing they sound rhetorically, only or mainly promote the economic interests of certain categories of the population, we may well be building increasing resentment against what we do, thus increasing the likelihood of pushback and backlash. Put differently, even if rhetorical legitimacy may serve us today, it is doubtful that will benefit our industry tomorrow if our rhetoric is… too rhetorical. So for instance, is “hybridization” a real innovation, or is it merely “repackaging”?
Under a narrow perspective, we would have every reason to welcome the creation of hybrid mechanisms with enthusiasm.
First, they may attract new actors and new disputes into the realm of autonomous dispute settlement, because they circumvent the problem of arbitrability and overcome the reluctance of some parties for institutions which are seen as excessively loose. In other words, hybrid mechanisms increase the territory of autonomous dispute resolution, and therefore the related market.
Second, these new mechanisms have a promising legitimating potential. They increase competition among dispute resolution fora and they promise the “return of the state”.
We do not need to lecture this audience about the alleged miraculous effects of competition. We know the story about competition: competition promotes financial efficiency and leads to the best possible allocation of resources. Increasing competition, it follows, can only be applauded, can only make things more legitimate.
As for the marketed “return of the state”, the rhetorical idea again is simple: we can see it playing its part in the rise of the idea of an international investment court.
The operative word here, of course, is ‘court’. The very word ‘arbitration’ is increasingly associated with critical discourses, in academia, in politics, in the media, in general societal discourses. So let’s call it a court. A court is something good. Something called a court is something good. Affixing the label of ‘court’ to something mobilizes symbols of justice which effectively give the thing it is affixed to a boost in rhetorical or symbolic legitimacy: it will be perceived as more legitimate simple because it is called a court.
Likewise, to some extent, with the idea of state control: the state, as an a priori aggregator of interests and preferences, tends to legitimize whatever it is involved in.
Two assumptions may explain this positive connotation.
First, there is the assumption that the involvement of the state apparatus leads to better societal representation.
Second, there is the assumption that where states are more directly involved, state interests will be more closely considered. We don’t only mean the particular interests of the state involved, but what we may call “common state interests”, interests that states share because of their common nature as states.
In sum, hybridization may be comforting because it entails the assumption that hybrid adjudicators will give more consideration to values and interests of states and society than arbitrators do. It will not only contribute to extending the market of autonomous dispute resolution, but also help it evolve to survive should the forecasted winter finally come.
The diagnosis is comforting, we have said. But is it rightly so? Can we be unqualifiedly content with this?
Even if the object of our profession is indeed good economically, is it thereby good for everyone, or at least for a broader array of stakeholders? How does it, in its current and evolving form, impact states, common interests, society at large? And remember, the question may prove crucial even if we only cater for the interests of our community. If it is not really good beyond for ourselves, good advertising may buy us some time. In the long run, however, should we not expect a pushback, a backlash from those people, those forces who don’t benefit, and possibly suffer, from what we do, from the developments we suggest?
Let us consider the assumptions on which our comforting diagnosis is based.
To begin with, we know that economic growth doesn’t benefit everyone. We now, for instance, that trickle-down economics don’t work. Economic development of some categories of individuals only may in fact increase resentment because of inequity aversion.
What about the “magic” label of the state?
First, will hybridization really increase the representativeness of international dispute settlement adjudication? Will adjudicators really give closer attention to broader interests and values? In fact, nothing indicates that hybrid court judges would be more representative than the existing pool of international arbitrators. And these new bodies are mainly designed to take market shares from local courts, not arbitral tribunals. Should they succeed, this would lead to replace local judges in all their diversity with a much more homogeneous global group of commercially oriented dispute resolution individuals.
Second, how about what we called “common state interests”? In fact, the creation of hybrid mechanisms places states in direct competition. And so it changes the setting: from solidarity of interests to competition of interest. The result is that states acquire an incentive to advance their particular interests as potential hosts of international dispute settlement bodies, to the possible detriment of interests they share with other states. In other words, to prioritize their direct financial interests over broader considerations. And the most efficient way to attract as many international disputes as possible is obviously to grant as much autonomy to potential users and players as possible. But is autonomy really good for everyone? For those who truly are autonomous, perhaps.
So the point is this: it would appear that the developments we are assessing today prioritize financial interests of specific actors over more common interests.
From the perspective of our community, this gives us reason to rejoice, at least in the short term.
From a broader perspective, however, one could wonder whether hybridization is not closer to repackaging than to a real, substantial improvement. Extending the ambit of autonomous dispute resolution arguably will have positive financial externalities. But it is far from certain that these will be shared and it is doubtful that they will be accompanied by a corresponding increase in societal representativeness.
Brutally simplified in the end, by promoting this evolution, we will perhaps do something good for the economy, perhaps in particular for the economic elites which tend to resort to these sorts of dispute resolution mechanisms. But in doing so we may well fuel the backlash against the entirety of what we do.
We are not invulnerable.