ARBITRATION – FEES OF ARBITRATORS – EPISODE 2

Written by Graham Perry

Graham Perry M.A. Cantab FCIArb Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer

1 July 2022

MEDIATION #253

The Chair asks for the arbitrators’ fees. Why? Because the sum that is to be requested from the parties starts with the Tribunal’s fees and expenses + then the fees of the body that is administering the arbitration. The two sums are totalled + then a deduction is made for any sums already paid by the parties at the request of the administrators. The balance is communicated to the parties and, upon payment, the award is issued.

The Chair’s fees are £275 per hour. Your fees are £225 per hour. B’s fees are much higher at £350 per hour. This is a big sum – even bigger when it is measured against the quite reduced input + contribution from B.

What happens next? Do you just nod through B’s fees without action or comment because you feel awkward, even embarrassed about the sensitivity of questioning another arbitrators’ fees? Quite understandable but wrong. Something should be stirring inside your head + spur you to speak up. It confronts us all at some stage in our career. The choice is whether to stay mute, and let the reference proceed. Or ask the question.

It is the latter. You have to ask the question. You cannot let such an out-of-range fee pass without querying it. And here S33 comes into play. You have a duty to avoid unnecessary expense. Are B’s fees “an unnecessary expense? If they are – you do not have the option to remain quiet – however awkward or embarrassing the moment maybe for you, you need to say something. But what?

Do you sound off to B in a testy phonecall followed by an angry email? Or, do you step back review the options + stay calm. Of course, you do the latter. After all arbitrators are not impetuous. We think first + act second – that is our training – our DNA.

But what do you actually say? Something like – “do you mind if we have a word about fees? I think we have an imbalance in our respective charges which may well give us both a problem. I realise this is a little awkward but I think it is best if we air the issue than pretend that all is well. What do you think?

EPISODE 3 – THE BLUE TOUCH PAPER IS LIT.

Episode

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