Corporate counsel are starting to “drive the bus” on the greening of arbitration and procedural efficiency with the recently released “Model Clause for Company Outside Counsel Engagement” from the Campaign for Greener Arbitrations (CGA).
The Model Clause, says the CGA, is for use by company legal departments to assist in reducing carbon emissions and other environmental impact associated with managing and resolving disputes.
The group’s members are listed at Task Forces and until recently also included Ramona Schardt of Siemens Energy, who is now the new secretary general of the German Institute of Arbitration (DIS).
Chair of the CGA Corporate Task Force, Michael Mcilwrath, formerly vice-president of litigation for Baker Hughes and now as founder of MDisputes, is focused on providing in-house legal support on demand to large and small organizations. He said the task force’s members decided to focus on developing tools to help in-house counsel drive real change. He added that more is in the pipeline to assist them.
Greener arbitrations and procedural efficiency
“The Model Clause not only tracks some of the key principles of the CGA,” Mcilwrath said, “it also incorporates issues of procedural efficiency by encouraging discussion on whether certain procedural steps can be streamlined or are even necessary. In this sense, the model language is consistent with the trend of in-house counsel being actively engaged in arbitration and active collaborators with their outside counsel.”
These “twin objectives” of corporate counsel and their companies in relation to arbitration (and other modes of dispute resolution) should expedite attaining both objectives. There is a natural synergy.
As we saw with virtual (and later hybrid) proceedings rapidly taking hold during the pandemic, greener practices in arbitration will take hold far more rapidly when they fit naturally with procedural efficiency (and even more so, when they are tied to necessity).
Use of Model Clause
The Model Clause can be incorporated in part or in its entirety in a company’s guidelines or policies relating to external counsel, included in counsel engagement letters, or adapted as appropriate.
Provisions of Model Clause
The Model Clause focuses on the “reduction of environmental impact and waste.” It states that the company has adopted/adhered to/agrees with the principles expressed in the CGA’s Green Pledge and the Green Protocol for Law Firms. It goes on to provide that “Outside counsel are to make efforts, consistent with the company’s objectives, to minimize the impact of the resolution of disputes on the environment.”
The Model Clause covers and provides, by way of example, the following:
Travel
- Consider and question the need to fly or the number of people who will fly, and consider instead the use of virtual meetings and hearing technology, including for document review, witness interviews, client meetings and hearing participation.
- Make reasonable efforts to offset the carbon emissions of any flights taken on company matters.
- Where available and appropriate, consider the use of train travel as a lower-carbon emitting alternative to flying.
Documents
- Whenever reasonably possible, conduct correspondence through electronic means unless hard copy documents are expressly required under the circumstances.
Hearings
- Consider whether certain issues genuinely require a hearing of any type (virtual or physical presence) to advance the company’s interests in the dispute or whether one or more issues may be decided on the basis of documents and written submissions only.
- Where a hearing is considered necessary or advantageous for the company’s interests, consider whether it genuinely requires the physical, in-person attendance of all participants, or whether some or all of the participants, including witnesses and experts, may participate through virtual hearing technology rather than by travelling to a hearing location.
- Whenever possible, discourage the use of hard copies of documents in arbitrations and instead encourage the use of electronic documents.
The Model Clause includes a disclaimer that the Framework and the Green Protocols are not binding and are not intended to displace applicable rules or derogate from the arbitration agreement unless and to the extent the parties so agree (either in the arbitration agreement or subsequently) or the tribunal so orders. Also, it states that the Framework and the Green Protocols do not establish liability or a liability standard for legal or regulatory purposes.
Plans for dissemination of the Model Clause for company outside counsel engagement are in development and more will follow soon. The Model Clause can be found on the CGA website, where also can be found the Model Procedural Order (in seven languages).
The Honourable Barry Leon is an independent arbitrator and mediator with Arbitration Place, 33 Bedford Row Chambers (London) and Caribbean Arbitrators. He was presiding judge of BVI’s Commercial Court (2015-2018) and is a former chair of ICC Canada’s Arbitration Committee. He is a member of CGA North America. Earlier versions of this article first appeared as the author’s posts on the OGEMID and Young OGEMID listservs, and as a LinkedIn article by the author posted by CGA.