[PODCAST] JAMS Introduces Key Changes to International Arbitration Rules

In this podcast, Kim Taylor, President of JAMS; Robert Davidson, Executive Director of JAMS Arbitration Practice; and Ranse Howell, Director of International Operations at JAMS discuss key changes made to JAMS International Arbitration Rules, the process for making changes and how these changes meet the needs of the legal community, particularly in light of the COVID-19 crisis.

Moderator: [00:00:00] Welcome to this podcast from JAMS. In June, JAMS announced it had updated many of its International Arbitration Rules. The revised rules respond to the needs of modern arbitration practice and address changes to the process brought on by the COVID crisis. Several of the changes are meant to expedite and streamline the process.

Today, we're speaking with three JAMS executives who are going to tell us a little more about those changes. Our guests include Robert Davidson, recognized as one of the world's leading international arbitrators and the Executive Director of JAMS Arbitration Practice. We also have Kim Taylor, President of JAMS and a key player in drafting of the new rules and Ranse Howell, Director of International Operations at JAMS.

Thank you all for joining us. Kim, I'll start with you. Can you talk a little bit about the changes and what spurred them?

Kim Taylor: [00:00:52] Sure. So, we periodically update our rules to reflect changes in arbitration practice or suggestions that we received from users or from our arbitrators. So, we were in the process of looking at revisions to all of our sets of rules as early as 2019.

Then, of course the pandemic happened and with the accelerated adoption of virtual ADR, we realized that we could make additional changes to reflect the virtual environment and the use of online document management tools and other aspects that we thought would be helpful.

Moderator: [00:01:32] Thank you, Kim. Bob, what does the international arbitration community need to know about these changes?

Robert Davidson: [00:01:37] Well, they have to know really two things: one that there are changes and that they should be fully aware of them when they put the JAMS International Arbitration clause into their contracts. And they should also be aware of the major changes that these rules have.

Moderator: [00:01:57] And can you expand on some of those new rules, Bob?

Robert Davidson: [00:01:59] Yes. The ones that really are key, and there are several changes here, but one is that confidentiality, which used to be limited to JAMS itself as an institution and the arbitrators, has now been expanded in the international rules to include the parties. So the parties are to keep confidential the arbitration.

Also, contrary to some other providers, we are not publishing awards. Awards will be confidential unless of course in connection with court proceedings, they're made public. There are of course changes, which many of the other providers have put in and we have also, that allow hearings to be ordered remotely, even over the objection of a party.

So if for the health and or safety of a party, the arbitrators deem it necessary to hold hearings by Zoom or some other platform, they can do that. They can also hold preliminary hearings and arguments in that way. We anticipate that there are going to be “hybrid proceedings,” as people have been calling them, in which a proceeding will be done partially in person and partially remotely, if a witness, especially a third-party witness or an expert, happens to be located in some other place.

Moderator: [00:03:18] And Bob, I understand there's a major change in the interim measures of protection. Can you tell us a little bit about that?

Robert Davidson: [00:03:25] Yes. Traditionally, if you wanted an interim measure of protection and that's something like an injunction, for example, you would make application to the panel and the panel would decide and use a standard that usually included two elements to it.

An applicant had approved something called irreparable harm, and irreparable harm is by definition something which is not compensable by money damages. The applicant had to show a likelihood of success on the merits. Well, after a discussion and a lot of thought on this, our rules now embrace what is the UNCITRAL motto law standard for granting an interim measure of protection. That is that a requesting party must show that quote "harm, not adequately reparable by an award of damages is likely to result if the measure is not ordered and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed, if the measure is granted"

Second, a requesting party must show not a likelihood of success, but quote, "there is a reasonable possibility that the requesting party will succeed on the merits of the claim." Now that lowers the standards necessary to obtain interim relief and takes the two key elements, which are often impediments to the granting of such relief out of the equation.

That's something that is a major change and to my knowledge, we're the only provider organization, aside from the UNCITRAL model rules, that provide for that standard.

Moderator: [00:05:03] Okay. And what else has changed under the new rules, Bob?

Robert Davidson: [00:05:06] Emergency relief procedures are also relaxed. The standard is that the emergency arbitrator shall determine whether the party seeking emergency relief has shown that immediate loss or damage will result in the absence of emergency relief and whether the requesting party is entitled to such relief.

Again, the standard is not as strict as the standard which is used often by other providers. With respect to dispositive motions or early determinations, we have several provisions which are meant to speed up or expedite the proceeding, one of which allows the tribunal on its own, after consultation with the parties to determine any claims or defenses outside of its jurisdiction or manifestly without merit. That's to prevent a lot of time and effort being spent on frivolous claims or claims which in no way are going to be granted or outside of the tribunal's jurisdiction. We also have added to the list of procedural matters that can be addressed during a preliminary conference, the need or advisability of establishing measures of security protocols.

To protect the confidentiality of the arbitration or the confidentiality of information disclosed in connection with the arbitration. There has been a lot of talk and continuing legal education panels. about the need for security, especially in this day and age where the hacking and intrusion into internet systems is not uncommon.

So that's really the major changes. There are others. Kim can go through the changes in which the administration and filing of an arbitration are indeed faster and much more user-friendly.

Kim Taylor: [00:06:56] Sure. Our international rules traditionally required and were reliant on hand service or hand delivery or mail courier service of hard copy documents with multiple copies being sent to different parties at different times.

We just completely eliminated that and streamlined the process so that it can be done electronically. We noted the fact we have an online document management system that we call JAMS Access. So we changed the rules to conform to the use of the electronic document management system and to just generally simplify the commencement process for an arbitration, which was something that, you know, in practice, we realized we could gain some advantages and make the process more efficient for all the parties if we did that.

So that's the primary change that we made. As Bob said, our rules previously did permit remote hearings, but we made it much more explicit so that the arbitrator’s authority with regard to that is quite clear. Those are the primary ones having to do with the demand for arbitration, the request for arbitration and how we commence it.

Moderator: [00:08:06] Thank you, Kim. Ranse, can you talk about what JAMS really wanted to accomplish with these new rules?

Ranse Howell: [00:08:10] Yes. I think JAMS wanted to accomplish a recognition that we have all experienced something rather unique and that arbitration was always meant to be flexible and demonstrate a responsiveness to the needs of parties.

As Kim had mentioned, we were in the process of reviewing our rules before the COVID pandemic happened early last year. As we were looking at the rules and as we were listening and talking to parties, we recognize that what parties really wanted was efficiency. They wanted certainty, they wanted it to be an expedited process and they also wanted flexibility.

I think both Kim and Bob have talked about both the administration portion and also the process and how the rules can anticipate a flexible or hybrid process but how parties, particularly as we enter into this next phase, were emerging out of the COVID experience, how parties will need to have a kind of a fast and efficient method of getting some interim relief and also potentially having an expedited process.

Moderator: [00:09:17] And can you talk about the influence of JAMS and its rules and the international arbitration community generally?

Ranse Howell: [00:09:23] I think that we do things and we introduce things that other institutions potentially haven't thought about or may not necessarily have highlighted. Let's just say the use of mediation in arbitration. We've had as part of our rules for some time the opportunity to appoint a mediator and have them as part of the arbitration process as and when necessary.

In addition to that, in 2018, we were the first institution to introduce a diversity rider that could be introduced into a contract clause for an arbitration. And what this does is it really causes and forces parties to consider: are they looking at a diverse range of individuals who will be serving on their arbitration panel?

Diversity is a very important and integral part of our outreach to the community, and I think that we really have led the way.

Moderator: [00:10:17] Thank you, Ranse. And Kim, can you talk about what goes into the process of drafting new rules?

Kim Taylor: [00:10:22] Sure. We typically update our rules every two, three years or so and we monitor developments in arbitration law.

We monitor best practices of other institutions. We take suggestions from our arbitrators who are working with the rules in practice, and may have some suggestions to make things less complicated or more efficient or, if there's a potential ambiguity, we can try to address that. We also take feedback from our case managers who are administering the arbitrations, which is one of the reasons we made the changes we did to the commencement process.

So, we collect those over the months and years and then sit down and go through them. We have a committee of people that work on that, including Bob and others. We have some conversation or debate about what the best practices ought to be and then we make those updates and try to make sure that we're being as up-to-date as possible with all new developments, including things like the introduction of our JAMS Access document management system, the reality of virtual and hybrid hearings, which we think are here to stay, at least for the foreseeable future.

And these were issued at the beginning of June, and I expect that by the end of the year, we'll start another list for the next round of it.

Moderator: [00:11:47] Has there been any reaction to the rules so far?

Kim Taylor: [00:11:50] Our primary goal in administering arbitrations is to ensure that the parties get a fair and efficient process, and so we're going to always listen to their feedback.

We anticipate that the changes we made are going to be welcomed in the legal community.

Ranse Howell: [00:12:05] Just as a follow-up, one of the things that we're doing to help to promote the changes in some of the new attributes of the rules is we're really taking the message to the clients and really identifying key areas of the rules that we think and we know from speaking to them, that will be important to them, to their clients and then also the efficient management of their dispute.

Moderator: [00:12:27] We'll leave it there. Bob, Kim, Ranse, thank you for your time.

Kim Taylor: [00:12:31] Thank you very much.

Robert Davidson: [00:12:32] Alright, good.

Ranse Howell: [00:12:33] Thank you very much.

Moderator: [00:12:35] You've been listening to a podcast from JAMS, the world's largest private alternative dispute resolution provider. Our guests have been Robert Davidson, Executive Director of JAMS Arbitration Practice, Kim Taylor, President of JAMS and Ranse Howell, Director of International Operations at JAMS. For more information about Jean. Please visit www.JAMSADR.com. Thank you for listening to this podcast from JAMS.