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THE DIGITALIZATION OF THE LEGAL SECTOR

 With particular regard to virtual hearings in the arbitration sector & possible future developments for courtroom activities.

Redazione a cura di Julian Nezih Isci e Iacopo Brini
Revisione a cura di Francesco Neri

1. Introduction

Ancora 1

To say that digitalization has, in the last few decades, completely revolutionized the world we live in would be a massive understatement at best: the undeniable impact of the Digital Age has been felt by every sector and undersector of human society. Every single facet of our day to day lives now sees some form of digital interaction, whether by smartphone or other means, and professional sectors have not been spared either, as from the greatest industrial corporation to the most modest family-owned enterprise, digitalization has been exerting its influence and changing old conventional practices at a breakneck pace. 

Law firms in particular have been riding what we could call the “digital wave” for at least the last twenty years, and the legal sector in general has begun a massive shift from the old traditions of gargantuan libraries and heavy thousand-page-long statutes to sleeker and far more efficient ways of storing and consulting data, giving rise to an IT subdivision referred to as Legal Tech and which now encompasses multi-million dollar software providers such as AbacusLaw or MyCase and is constantly seeking to improve, streamline and perfect the law firm’s procedures and techniques.

Legal Tech sees possible applications in every law field, however, and its scope is not limited to the firm business; the statal legal branch has also experienced inroads made by digitization processes, with computers, screens and similar technology appearing more and more in courtrooms to help judges, prosecutors and lawyers alike in streamlining and making trials more efficient, effective and less time-consuming. This process, however, has not been without its own share of opposition, and new and unforeseen legal questions have been posed in reaction to new technologies being introduced on the stage.

Ancora 2

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We will now take into consideration one particular example of a sector of the law where such questions arose, it being that of arbitration proceedings. With many international participants, the travel effort, associated costs and planning difficulties of such events have always proven to be a significant hindrance [1] and with the coming of the Digital Age, the use of video conferencing technology, so-called "virtual hearings", seemed poised to easily overcome this hurdle.

However, arbitral tribunals have been very reluctant to use video technology in the past. Why, you might ask? The reason has to do with a legal doubt regarding the possible violation of the "right to be heard" under Article 6 of the ECHR, the European Convention on Human Rights, especially if a party were to object to the implementation of such a practice.[2]

Specifically, the ECHR provisions aim to secure the citizen’s right to a public hearing where he may freely be heard, to protect them against “the administration of justice in secret with no public scrutiny”. Holding the trial online, or in a closed-doors virtual meeting, might prove to be arguably a flawed (at best) form of publicity for the arbitration proceeding.

Thus, it took the COVID-19 crisis (as in many other areas) to secure the digitalization of arbitration. In a landmark decision [3], the Austrian Supreme Court was the first national high court to allow the admissibility of online arbitration proceedings, even against the will of a party. In the specific case, the question was once again whether a virtual hearing violated fundamental procedural principles: the parties' right to be heard and their right to be treated fairly.[4]

Article 6 grants each party the right to present its point of view during ongoing proceedings. The fact that the basic use of video technology does not violate Article 6 had already been established by the ECHR. It should also be borne in mind that Article 6 also grants a right to effective legal protection, and virtual hearings can prove to be an excellent help for the effective enforcement of rights. The Supreme Court stated that, especially in times of a pandemic, remote hearings offer a significant alternative while preserving both the right to be heard and effective access to justice.

In addition, for more practical examples, three guidelines on the use of virtual hearings in arbitration have already been published, the ICC Guidance Note, the HKIAC guidelines and the Seoul Protocol. Without going into the details, the most important features are mentioned below. Each of the three guidelines shares the same objective of assisting parties during virtual hearings.[6]

-       The ICC Guidance Note[7] focuses on issues that may arise from holding hearings virtually and encourages parties to consider specific measures that promote efficiency during arbitral proceedings. 

-       The HKIAC Guidelines[8] also aim to promote efficiency during arbitral proceedings but encourage parties to use the available resources of the institution. 

-       The Seoul Protocol[9] offers guidance concerning the logistical challenges presented by remote arbitration hearings. Its guidelines focus on default standards applicable to streamline video-conference proceedings. 

Under both the precedent set by the Austrian court and the aforementioned protocols it is clear that the main obstacle to the integration of virtual hearings into arbitration has shifted from a legal and procedural nature to a new purely technical kind, as the main focus is now perfecting new procedural rules that, in due time, will become enshrined in statutes and regulations across both the EU and the rest of the world.

2. The digitalization of arbitration proceedings

3. Conclusions

Ancora 4

To summarize, we could say that the arbitration sector has fallen in line with the rest of the legal world and has now fully accepted the changes brought on by the pandemic; as with most other sectors forcibly digitized during COVID, the question now seems to shift towards the permanence of such impositions once the epidemiological situation returns to normal and, in case of an affirmative answer, the correct implementation of these new procedures alongside the more traditional, in-person ones to create a hybrid system that maximizes efficiency and keeps in tune with the flow of new technology, without sacrificing or compromising any fundamental rights of the citizen.

4. Bibliography and website citations

[1] For the parties and probably even more for the environment. For example: A medium-sized arbitration case (value in dispute USD 30-50 million) would result in a total impact of 418,532.02 kg CO2. To compensate for these emissions, more than 20,000 trees would have to be planted. This is roughly equivalent to the number of trees in New York's Central Park, see Greenwood/Duggal, The Green Pledge: No Talk, More Action, Kluwer Arbitration Blog, arbitrationblog.kluwerarbitration.com/2020/03/20/the-green-pledge-no-talk-more-action.

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[2] Förstel-Cherng/Tretthahn-Wolski, Anmerkung zu OGH 23. 7. 2020, 18 ONc 3/20s, NR 2021, 88.

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[3] OGH 23. 7. 2020, 18 ONc 3/20s.

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[4] Scherer/Schwarz/Ortner/Jensen, In a ‘First’ Worldwide, Austrian Supreme Court Confirms Arbitral Tribunal’s Power to Hold Remote Hearings Over One Party’s Objection and Rejects Due Process Concerns, Kluwer Arbitration Blog, http://arbitrationblog.kluwerar- bitration.com/2020/10/24/in-a-first-worldwide-austrian-supreme- court-confirms-arbitral-tribunals-power-to-hold-remote-hearings- over-one-partys-objection-and-rejects-due-process-concerns.

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[5] OGH 23. 7. 2020, 18 ONc 3/20s.

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[6] Jin Lee/van Muelken, Virtual Hearing Guidelines: A Comparative Analysis and Direction for the Future, Kluwer Arbitration Blog,http://arbitrationblog.kluwerarbitration.com/2021/06/23/virtual-hearing-guidelines-a-comparative-analysis-and-direction-for-the-future/.

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[7] https://iccwbo.org/content/uploads/sites/3/2020/04/guidance-note-possible-measures-mitigating-effects-covid-19-english.pdf.

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[8] https://www.hkiac.org/sites/default/files/ck_filebrowser/HKIAC%20Guidelines%20for%20Virtual%20Hearings_3.pdf

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[9] http://www.kcabinternational.or.kr/user/Board/comm_notice_view.do?BBS_NO=548&BD_NO=169&CURRENT_MENU_CODE=MENU0025&TOP_MENU_CODE=MENU0024

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