Surviving disclosure in arbitration and using Redfern Schedule.
The late Frank Costigan QC, former Royal Commissioner, eminent barrister and arbitrator, published an article in the Australian Financial Review in 2007 titled “Arbitrate or perish in a pile of paper”.[1]
In his article, Mr Costigan made some salient points about the state of arbitration in Australia, the thesis being that arbitration as a means of dispute resolution could lead to:j
- faster resolution;
- lower cost; and,
- streamlined disclosure.
Fifteen years later, the thesis around the perceived utility of arbitration has been questioned, especially regarding time and cost-efficiency. The passage of time suggests that arbitration’s real edge over litigation has been with regard to:
- neutrality of venue;
- confidentiality of proceedings;
- streamlined procedural steps; and
- effectiveness in enforcing awards in cross-border disputes / foreign jurisdictions.
The 2020 Australian Arbitration Report found that the cost of arbitration varies depending on the disputed value results in higher arbitration costs.[2] Nothing earth-shattering about that – but compared to litigation seemingly no better?
An obvious area where arbitration can offer disputants value in terms of cost reduction is simplifying the
disclosure process. In highly complex cases requiring more legal expertise and resources, costs increase with the evidentiary burden.[3] As such, one of arbitration’s most attractive features is that parties have a degree of autonomy / contractual freedom to avoid the rigours of conventional disclosure, particularly where such disputes may capture thousands, if not hundreds of thousands, of documents according to a conventional litigation test for relevance.
Pursuant to Article 19(1) of the UNCITRAL Model Law on International Commercial Arbitration, parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.[4] Australia’s legislation under the International Arbitration Act 1974 (Cth) and respective State uniform arbitration legislation, such as the Commercial Arbitration Act 2013 (Qld), adopt the Model Law for the purpose of arbitration in Australia.[5]
The International Bar Association (‘IBA’) also provides a set of internationally accepted rules (‘IBA Rules’)[6] that are now commonly adopted by parties around the world in arbitration, in cases where procedure is governed by either institutional rules or an ad hoc basis. The IBA is an organisation for legal practitioners, bar associations and law societies, which all assist in ensuring “global stability and peace through the administration of justice”.[7] In reliance on these rules and principles, disclosure can efficiently be managed by parties agreeing to include the IBA Rules in any arbitration.[8] This will assist parties in identifying and narrowing the production of documents.[9]
Article 2 of the IBA Rules prescribes that “the Arbitral Tribunal shall consult the Parties at the earliest appropriate time in the proceedings and invite them to consult each other with a view to agreeing on an efficient, economical and fair process for the taking of evidence”. Article 2 gives scope to the parties in arbitration to agree on matters relevant to evidentiary issues including the production of documents.
Article 3 of the IBA Rules provides a procedure for parties to both produce documents which they intend to rely upon as well as request production of documents believed to be in the possession, custody or control of the counterparty. Article 3(3) sets out the requirements that a request to produce documents must contain.
To aid in this endeavour, renowned international lawyer and arbitrator, Alan Redfern (retired), created the Redfern Schedule, as a tool that organises and presents document requests, objections and decisions.[10] Its purpose is to identify the main issue, which indicates to the arbitrator the respective position of each party after this exchange.[11]
The Redfern Schedule ordinarily consists of five sections, specifically concerning:
- the requested documents;
- stating the reason why disclosure of that document is relevant to the dispute;
- any objections to discovery;
- responses to the objections; and
- a column for the final decision by the tribunal.[12]
The Redfern Schedule is used during the document production stage of international arbitration proceedings and is set out in the first or subsequent procedural order made by the arbitral tribunal regarding document production issues.[13]
To use the Redfern Schedule procedure a party may request, or the arbitral tribunal can direct, that this process should apply during the proceeding.[14] The Redfern Schedule enables parties to request specific documents, through a limited category of documents. The parties need to stipulate why they require the document. For example, it could be relevant for specific allegations / defences, affidavits or other specifications. The other party is then able to consent to or object to the request for documents by providing reasons.
Once parties make a schedule containing the requests and responses, the arbitral tribunal will determine if the documents requested are necessary to disclose. The Redfern Schedule is the primary source of communication between the parties on disclosure matters.[15]
When an arbitral tribunal is deciding if a document should be disclosed, the tribunal should ordinarily consider the proportionality of the document; if the size and quality of the document outweighs the burden on the party that must provide the document.[16] In addition, the tribunal considers if the documents are relevant or significant if the document is protected by legal privilege and if it is unfair in the circumstances.[17]
Other rules can be used in conjunction with the Redfern Schedule, such as the ‘Veeder Codes’ which abbreviate objections set out in the IBA Rules.[18] This ensures the process is more efficient.
The Redfern Schedule can reduce disclosure and ensure that the documents that need to be disclosed are essential to matters in issue. The onus is on the party seeking to rely on the limited categories of documents to ensure that all of them are necessary. Further, this being a collaborative document allows for each party to verify their reason or objection to such documents, with the other party constantly being updated.
To further limit the disclosure requirements for cases would involve limiting the Redfern Schedule to a reduced number of discovery requests, or only allowing the discovery of specific documents, in comparison, to categories of documents that may be quite broad.[19] For example, parties might agree to a specific number of documents in any given category.
Parties using arbitration to resolve disputes, especially where there is a significant volume of documents, should consider the adoption of IBA Rules and a process such as the Redfern Schedule for streamlining disclosure in the event of a dispute.
To that end, the arbitral process can help parties to simplify the resolution of disputes and not mimic litigation and the onerous disclosure obligations that might typically attach to conventional litigation.
Using the Redfern Schedule allows parties to agree on the extent of disclosure that they require and ensure that the disclosure is neither excessive nor overly burdensome.
For further information about the use of arbitration as a means of dispute resolution in cross-border and domestic disputes, please contact our team and we would be happy to talk through the advantages.
Glenn Vassallo (Managing Director), Scott Standen (Director) and Ashley Hill (Director) can assist you with any queries in relation to your corporate legal requirements.
This article was written by GRT Lawyers Director, Ashley Hill and Evyana Grespos (paralegal).
[1] Frank Costigan, ‘Arbitrate or Perish in a Pile of Paper’ Financial Review (10 August 2007) <https://www.afr.com/companies/professional-services/arbitrate-or-perish-in-a-pile-of-paper-20070810-jenb3>.
[2] ACICA, 2020 Australian Arbitration Report (Report, 2020) 13.
[3] Ibid.
[4] UNCITRAL, ‘UNCITRAL Model Law on International Commercial Arbitration’, United Nations Commission on International Trade Law (PDF, 2006) 14 <https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/19-09955_e_ebook.pdf>.
[5] See for example, International Arbitration Act 1974 (Cth) s 16; Commercial Arbitration Act 2013 (Qld) s 2A(1).
[6] International Bar Association Rules on the Taking of Evidence.
[7] IBA, ‘About the IBA’, International Bar Association (Web Page, 2022) <https://www.ibanet.org/About-the-IBA>.
[8] IBA Rules on the Taking of Evidence in International Arbitration Adopted by a resolution of the IBA Council 17 December 2020 International Bar Association.
[9] Aceris Law LLC, ‘Revised 20202 IBA Rules on Taking Evidence in International Arbitration’, Aceris Law the International Arbitration Law Firm (Web Page, 14 March 2021) <https://www.acerislaw.com/revised-2020-iba-rules-on-taking-evidence-in-international-arbitration/>.
[10] Constantine Partasides et al, Redfern and Hunter on International Arbitration (Kluwer Law International, 6th ed, 2015) 271.
[11] Ibid 272.
[12] Anna Kirk, ’Document Disclosure in Litigation and Arbitration’ [2012] New Zealand Law Journal 123, 125-126.
[13] Constantine Partasides et al (n 10) 292.
[14] Federal Court of Australia, National Practice Area Practice Note C&C-1: Commercial and Corporations Practice Note, 25 October 2016 para 8.4.
[15] Constantine Partasides et al (n 10) 292.
[16] Duncan Watson, ‘International Arbitration Practice: Taking Advantage of the Flexibility’ (2017) 32 Law Society Journal 88, 89; Federal Court of Australia (n 14) para 8.6.
[17] Ibid.
[18] Constantine Partasides et al (n 10) 292.
[19] Paul Tan and Samuel Seow, ‘An Overview of Procedural Innovations in International Commercial Arbitration’, International Arbitration Asia (9 December 2014) <http://www.internationalarbitrationasia.com/articles/singapore/international-commercial-arbitration>.
