Aspirations for arbitration

From ‘unhappy and dysfunctional’ to ‘user-friendly and attractive’  –  Lord Glennie on the rise of arbitration in Scotland

Lord Angus Glennie is passionate about arbitration, which is perhaps not surprising given that he’s Chair of the Scottish Arbitration Centre (SAC). But he doesn’t pull any punches when talking about the development of the dispute-resolution procedure north of the border.

Glennie, brought up in England and educated at Cambridge, is a former Court of Session Judge who retired in 2020 to take up the SAC role.

“When I moved to Scotland and qualified as an advocate, I was both surprised and disappointed by how little arbitration work there was,” he says. “What little there was related mainly to construction disputes and I came to realise that the experience of arbitration in Scotland was not a happy one. Looking back, we’d probably say there was a dysfunctional system at the time.”

Glennie says that some of the problems arose from constantly allowing court intervention; conducting debates as if it were a court case; and stating a case for the opinion of the court. “It all led to delay and expense. It gave arbitration a bad image,” he says.

The advantages of arbitration

Glennie, who practised at the Commercial Bar in London before coming to Scotland, had mostly been involved in shipping and commodities, where the majority of disputes were referred to arbitration. It was the norm.

There were many reasons for this and Glennie outlines arbitration’s advantages over litigation.

“You can choose a tribunal that knows about the subject matter of the dispute. You can keep your dispute confidential; you can set your own timetable without having to wait for the courts to find a judge and find court time; you can have greater flexibility in the way the dispute is handled. An award is readily enforceable, both in Scotland and abroad. And it can be significantly cheaper than court.”

Another advantage, in his experience, is that it gives parties an opportunity to see each other face to face in a less hostile atmosphere than in court.

“Occasionally,” he says, “meeting in that way can breed an attitude of ‘let’s not fight this all the way, let’s get it settled and we can do some more business together’.”

So why hadn’t Scotland gone down the same path as England? According to Glennie, it required the Arbitration (Scotland) Act 2010 to bring arbitration law in Scotland up to date and give the profession a platform for building – or at least trying to encourage – the greater use of arbitration in Scotland.

“It’s taken a while to rebuild the reputation of arbitration in Scotland,” he says. “I don’t think we’re quite there yet, because the legacy of the bad old days takes a lot of dispelling. We’re still trying to encourage people to believe that arbitration should be the default dispute resolution system in Scotland, particularly in commercial work, but also in family law and other fields.”

The user-friendliness of arbitration

It’s hard to get an accurate picture of how many parties choose this form of dispute resolution because arbitration is confidential.

“If you ask three people whether they’ve been involved in an arbitration and they all say yes, you don’t know if it’s the same one or three separate ones. But there has undoubtedly been an increase in the use of arbitration in Scotland,” says Glennie.

“We would like to see this continue. I would encourage contract drafters to consider writing Scottish arbitration into their contracts and, for good measure, opting for SAC arbitration,” he says.

“If parties can’t agree on the choice of arbitrator, then the SAC will make an appointment if asked to do so, but that doesn’t happen very often. The Law Society of Scotland and other Arbitral Appointment Referees, such as CIArb, would also do this following a legitimate request.”

As to what parties can expect from an arbitrator, Glennie says that while everyone is different, a good arbitrator will have the same skills as a good judge. 

“You have to be prepared to work hard and efficiently, but you need more than that. You need patience and an even temper, and you need to display courtesy. You are chosen because the parties want you. To that extent you have to be a bit more ‘user friendly’.”

Interestingly, Glennie notes that arbitrators need to avoid what he terms ‘judge-itis’.

“You’re not a judge, so don’t act like one. The parties have chosen you because they have confidence in your skills and your ability to conduct an arbitration in a reasonably civilised way.”

He also thinks that there is a feeling among some potential customers of arbitration that it is a “very dignified and austere process populated by retired judges and senior lawyers”.

“I don’t think that’s accurate any more,” he says. “Many arbitrators in London, for example, have both legal and business experience and have been appointed as an arbitrator at a relatively young age. There’s no reason why people who think they have got the right skills shouldn’t put themselves forward for the profession,” he says.

Arbitration’s path – from SAC to AI

The SAC, founded in 2011 in the wake of the 2010 Act, must take much of the credit for promoting the use of arbitration in Scotland. A significant landmark was the hosting of the International Council for Commercial Arbitration (ICCA) Congress in 2022, which brought more than 1,000 practitioners from across the world to Edinburgh.

“Since then, we, at SAC, have developed a set of arbitration rules, so we can now operate arbitrations under these institutional rules and provide a comprehensive arbitration service, which is a development of our remit from the early days,” says Glennie.

“We have a registrar and case-management system that is now up and running. We also have a court headed by another retired judge, Lady Wolffe, that can appoint arbitrators in SAC cases and other ad hoc references. We now offer a complete package that I have no doubt will be attractive to commercial parties in Scotland.

“One of our main ambitions is to make Scotland a place of choice for arbitration, particularly among Scottish commercial parties, rather than them going to London, Paris or Geneva, where, inevitably, it’ll be more expensive for them.”

Glennie also has strong views on the role technology will play in the future.

“We’ll see more online dispute resolution,” he says. “We’ll see AI being used more by practitioners, initially to assist them in the preparation and presentation of cases, but also the low-value cases will be effectively decided by AI, allowing resources to be concentrated on the more substantial disputes. There’s no reason why we should be frightened of that, provided we remain in charge,” he says.

Similarly, he expects the greater use of virtual hearings. “They can be very effective, but it’s a balance. What people may not realise is that it’s more tiring. Your face is close-up on the screen the whole time. Also, you lose a sense of what’s happening ‘in the room’, to put it colloquially, whether that’s among the parties or between you and your co-arbitrators or co-judges.

“You miss the body language, the momentary catching of an eye or brief comments you pick up that are missing when the matter is dealt with virtually.”

Glennie, who has conducted five-day trials using video conferencing systems such as Microsoft Teams, says that subject to those reservations, it works well.

“By choice,” he says. “I would prefer to restrict the use of virtual hearings to interlocutory or procedural discussions, maybe lasting up to a day. But I think virtual hearings are here to stay.”

Needless to say, he has the same aspirations for arbitration as a whole.

ArbFest2024 – a call for delegates and sponsors

The inaugural Edinburgh International Arbitration Festival – ArbFest – in September 2023 followed the biannual International Council for Commercial Arbitration (ICCA) Congress, which took place in Edinburgh in 2022.

“We thought that we should start a smaller annual event to capitalise on the impact of ICCA,” says Lord Glennie. “We had great feedback. We had more than 100 speakers and delegates, bringing international practitioners to Edinburgh, and we hope this year will be even bigger. I would encourage the local arbitration community to attend – and also sponsor – this year’s event in Edinburgh on 5–6th September.”

While the programme is yet to be finalised, it’ll include a series of talks about confidentiality as opposed to open justice.

“There’s also the question of ‘psychology in arbitration’ and we’re bringing speakers in on that topic,” says Glennie, “because there’s the whole ethos of going into arbitration with the mindset of knowing what you’re looking for versus the ‘all or nothing’ court atmosphere.”

The event should further challenge people’s preconceptions and help to enhance arbitration’s growing reputation.

Written by Steve Smethurst