Film: Arbitrator did not demonstrate a balanced view
The High Court has removed a sole arbitrator it found had pre-judged the merits of a dispute because he said he knew and would believe the expert witnesses one side had put forward.
Mr Justice Calver said it was one thing to express a preliminary view as to the merits of a dispute or the credibility of a witness after hearing the parties’ evidence.
“It is another matter altogether to express such a view, preliminary or otherwise, before even hearing the witnesses, based upon the extraneous fact of purporting to know a witness by reputation or acquaintance.”
The order was sought by an insurer in dispute over a £3m claim to cover the costs of a delay in the production of a film being made in Sweden after a stunt involving the lead actor went wrong. All the details of the case were anonymised.
The arbitrator, ‘W’, an experienced film producer but first-time arbitrator, was nominated by the British Film Institute after the parties could not agree on one.
He made the comments in issue at a procedural hearing; the insurer sought to remove him on the basis of a real possibility he was biased, rather than actual bias.
Calver J said there were no justifiable doubts about W’s impartiality based purely on the fact that he knew some of the insured’s witnesses.
“Such commercial dealings are entirely to be expected of ‘an experienced practitioner in… television programme production” who has been in the market for some time and the parties must be taken to have had this in mind at the time of the arbitration agreement.”
However, the remarks he made went further than that. The judge explained: “Whilst ultimately agreeing that the parties could call their witnesses, including their expert witnesses and have them cross-examined, the arbitrator expressed a clear view that it was not necessary for them to be called (‘I don’t think we need to listen to them’) because ‘I know them all personally extremely well on the [insured’s] side’.
“He coupled this remark with the observation that he didn’t know the insurer’s expert witnesses.”
This was “plainly not an expression of a balanced and impartial view”, Calver J said.
“Rather, a fair minded and informed observer would consider that the arbitrator was saying that he would accept at face value the evidence of the insured’s expert witnesses because he knew them to be ‘exceptional people in their fields’.
“He was thereby pre-judging the merits of the dispute. The fair minded and informed observer would likely consider that his prejudice in favour of the insured’s expert witnesses would prevent an impartial assessment of the evidence of the insurer’s witnesses.”
The fact that the arbitrator reluctantly agreed that they could be cross-examined “would not assuage” such concerns.
Calver J said this was not a case where an arbitrator was merely indicating a predisposition towards a particular outcome, or expressing a provisional or tentative view on an issue before he had heard full argument.
“It is a case where the arbitrator gives the firm impression of having already allowed extraneous, illegitimate factors to influence his assessment of evidence which he has not yet heard and, moreover, of not even realising that that is an unfair approach to adopt.”
This was “particularly concerning” as W was a sole inexperienced arbitrator, “without the tempering influence of two other co-arbitrators”, making findings of fact which were not susceptible to appeal.
“The parties might expect the arbitrator to use his special knowledge of the film industry to understand the evidence that is given at the arbitration and any usages of the trade.
“But they would not expect him to use his special knowledge to pre-determine that he would prefer the evidence of an industry insider whom he knew (both personally and by reputation) over one whom he did not know.
“Rather, they would expect him to undertake an objective assessment of the evidence after he had heard it and heard it tested in cross examination.”
The judge anonymised the parties to protect their expectation of confidentiality in the arbitration process.
While the decision on naming the arbitrator was “more finely balanced”, he decided not to as his appointment was effectively a one-off and there was no public interest in revealing his identity.
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