§ 16. Discussion

Giacomo Rojas Elgueta – Well, here the standard law and economics would answer “No”, because here we actually have the typical principle agent problem. So the counsel is representing the principle, which is the client. And to put a success fee, you should perfectly align the interest of the two parties, which should help the counsel to have a more objective assessment of the situation because he is putting his interest at stake exactly as the client. This would be the answer from a standard economist. Then I look tensely to see whether this, in your opinion, changes if we bring a psychologist in the picture. Maybe not, here I think, still it’s a way to align the interest of the client and the counsel, more than an hourly fee arrangement.

Participant II – But the lawyer is going to be paid zero, if he or she lo…

Prof. Giacomo Rojas Elgueta – Exactly, so he or she should be more objective…

Laurence Shore – I think there are other variables. Like how badly you need the case, and whether you have a portfolio, as third-party funders do. For example, (a portfolio) of cases in which they are expecting that a certain percentage are going to be successful. So I take the point, and I certainly agree with Giacomo that we, or at least I, usually over-estimate but the overestimation is often related to how badly I need the case. Or how busy I am, or how un-busy I am. Can I say something about the claimant-respondent point? You know I take your point, but I have represented, and usually the people I have appeared before have also represented so many respondents in their careers that I think it flattens that curve out. I absolutely take your point that the first cut usually is the deepest. If the request for arbitration is a really good advocacy document, setting a lot of the framework for the case, that has a way of (effecting the outcome). But so many people (arbitrators) that I have been before, have represented so many respondents that they are really waiting to see the respondent’s answer looks like before they even read the request. Because sometimes they aren’t sure if they are reading the request…

Speaker I – I’d just like to add two sentences. First of all, you said, provided that the request for arbitration is properly drafted and presented. But that goes without saying. There are requests of arbitration, which if you read them first, you say “Okay that’s it, but let’s wait for the respondent’s response” and you may immediately doubt why this case was brought in the first place. That’s comment number one. My comment number two is that, it’s happened to me at least a number of times over

Laurence Shore – I agree with that and I think it is very useful to always hear from counsel if you are sitting. And as counsel, I would always want to have the opportunity to speak to the tribunal. It is much easier. I think I would take Participant 1’s point directly. You have an opportunity to confront the points that are against you. It’s also, I think, helpful to do that because there is a recency effect for arbitrators of course. I know Paolo will make a speech about it and we will ask him at the next session. You know, memory effects arbitrators. Because they are writing their awards 2-3 months later, never Dr. Esin, he writes them next week

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