Major infrastructure disputes

Introduction

Recent developments in English procedural law may have an important bearing on whether and where to bring a claim in infrastructure-related disputes. In particular, these developments raise a number of legal and practical considerations that could make arbitration a more attractive forum than the English courts for resolving disputes over large scale, complex infrastructure projects going forwards.

Witness statements

In recent years, stake-holders have expressed concern that witness statements submitted in court proceedings were becoming increasingly argumentative and overly-lawyered. In 2021, the Business and Property Courts of England & Wales introduced new rules in relation to witness statements. These rules, contained in Practice Direction 57AC, make it clear that the scope of witness statements should be narrowed so that they only contain evidence as a matter of fact, of which a witness has personal knowledge, which is relevant to the case and which needs to be proven at trial.

These new rules do not apply in arbitration seated in England & Wales. Instead the normal practice is that the tribunal will adopt the IBA Rules on the Taking of Evidence in International Arbitration (2010) (the IBA Rules), which provide the parties and the tribunal considerable flexibility to agree or determine how witness statements are to be presented (if indeed they are to be presented at all) and in relation to their content..

As a result of this new regime, parties may feel that arbitration is a better option for disputes that are fact-heavy, such as those relating to large scale infrastructure projects. In large infrastructure disputes, parties often use witness evidence to provide narrative for the detailed and complex factual background relevant to the dispute to assist the tribunal to navigate voluminous documentary evidence. Using witness statements in this way is now much more difficult under the new court rules, placing more pressure on pleadings and skeleton arguments.

Documentary evidence

The process of disclosing documents and adducing evidence at a final hearing can often be overwhelming whether it be in arbitration or court litigation. For disputes in the English courts, this is often exacerbated by the approach to disclosure under English law, which has traditionally required parties to disclose: i) those documents they rely upon; ii) those that are adverse to their case or another party’s case; and iii) those that support another party’s case. This can lead to parties including a large volume of unnecessary material at trial. In the case of Energy Works (Hull) Limited v MW High Tech Projects UK Limited [2022] EWHC 3275 (TCC), which concerned an energy from waste plant in the North East of England, 142,037 pages of disclosed evidence were included in the electronic bundle (said to be equivalent to 474 lever arch files), and the parties provided witness statements from 28 witnesses, running to over 10,000 pages.

Energy Works serves as a good example of why litigation proceedings in the English courts may not always be the most efficient and cost effective option for parties when compared to arbitration. Whilst new rules governing witness statements may limit the volume of witness evidence, this will not address the pressure on hearing bundles driven by broad litigation-style disclosure. Prescriptive requirements for disclosure in litigation proceedings can result in potentially very large numbers of documents being disclosed, increasing the costs of the disclosure phase for both parties and the likelihood of voluminous hearing bundles at the merits stage.

In contrast, disclosure rules commonly selected by parties in arbitration, such as the Chartered Institute of Arbitration rules (CIArb Rules), the IBA Rules, and the Rules on the Efficient Conduct of Proceedings in International Arbitration, all propose more limited levels of disclosure obligations upon parties. Those obligations are generally confined to documents upon which a party relies and documents that are reasonably requested by another party, which, under the IBA Rules for example, are confined to documents that the requesting party can show are both relevant to the case and material to its outcome. The ability to limit disclosure will appeal to parties seeking to control the amount of time and cost spent on resolving large scale disputes concerning infrastructure projects. This may be particularly the case when those dispute relate to parties who are more familiar with civil law concepts of disclosure, where the scope of such disclosure is limited or non-existent.

Presentation of a claim

Separately to the points about evidence, arbitration can also offer parties greater flexibility regarding the way in which their claims are presented when compared to the approach adopted by the English courts. This can be especially advantageous for disputes concerning complex infrastructure projects, where the use of presentations and visual aids may help Tribunals to better understand the subject matter and the issues involved.

The use of tools such as visual and electronic aids, or presentational software, is becoming increasingly common in international arbitration and, according to the 2021 International Arbitration Study by the Queen Mary University of London, only 12 percent of participants ‘never’ or ‘rarely’ used some form of hearing room technology (such as multimedia presentations). Similarly, the February 2022 report by the ICC Commission on ‘Leveraging Technology for Fair, Effective and Efficient International Arbitration Proceedings’ records that over two thirds of participants had either always, often or sometimes experienced trial graphics or multi-media presentations during an evidentiary hearing. By utilising such technology, parties will be better placed to explain detailed and complex issues or concepts relevant to the dispute. For international disputes, presentations and visual aids may also help to transcend language barriers and enable parties to present their position in a way that can be understood by all.

While parties should keep in mind that presentations and visual aids should only utilise the evidence already filed in the dispute, the flexibility that arbitration offers in using such tools means that parties may be more inclined to choose arbitration for resolving a dispute on an infrastructure project.

Conclusion

National courts choose adopt rules that they consider best suit civil procedure in that jurisdiction, whereas arbitration provides for flexibility. While there may be good reasons for the recent changes in English civil procedure, those changes may not benefit the parties in large-scale infrastructure disputes and this may be another factor to lead such parties to choose arbitration instead.