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International Arbitration Update 13 Jun 2018 Gender diversity in international arbitration: does the Arbitration Pledge go far enough?

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What you need to know

  • In 2015 members of the international arbitration community drew up the Arbitration Pledge in recognition of the under-representation of women on arbitral tribunals.
  • In this article we examine whether the Arbitration Pledge goes far enough in view of similar efforts in Australia in relation to the gender equitable briefing of barristers.
  • We conclude that while the Arbitration Pledge does not include targets and in that way does not go as far as the Law Council of Australia Equitable Briefing Policy, the reporting requirements in both initiatives are likely to be effective drivers of change.

The under-representation of women on arbitral tribunals

It is well documented that arbitral tribunals tend to be male-dominated, a phenomenon which has been resistant to change as the same arbitrators are often chosen again and again. In 2014, only 11.7% of arbitrators in LCIA arbitrations were women.

A lack of gender diversity is not limited to international arbitration and can also be seen across the legal profession, both in Australia and in the United Kingdom. It is particularly pronounced in certain roles such as senior counsel.

But the gender breakdown of the legal profession also shows that women are well-entrenched in the profession, particularly in corporate counsel roles. We should assume that corporate counsel will increasingly expect to see an equitable makeup of arbitral tribunals if their organisation is involved in a dispute, not least because of the tangible benefits diversity brings.

The need for change appears to be widely accepted, certainly amongst arbitral institutions, where the increasingly diverse character of institutional appointments demonstrates real action. The last few years have seen a number of initiatives directed at improving diversity in international arbitration. Perhaps the most important initiative has been the introduction of the Arbitration Pledge which has been taken by arbitrators, representatives of corporates, arbitral institutions and an impressive number of law firms including Ashurst.

But does the pledge go far enough?

To answer this question, we have examined similar efforts in Australia to promote the gender equitable briefing of barristers. The Australian experience highlights the danger that these kinds of policies do not always go far enough, having only a modest impact on the advancement of women in the profession.

Both the Arbitration Pledge, and the recently strengthened Equitable Briefing Policy in Australia, for the first time require participants to report on their progress. This appears to be an important mechanism for keeping participants honest and for keeping the policies front of mind, as enduring change will only occur through sustained commitment by all in the profession.

And the initial reports from the arbitral institutions are cause for optimism. In 2017, the percentage of female arbitrators in LCIA arbitrations had risen to 24%.

Gender diversity in the legal profession

As can be seen from the following table, the lack of gender diversity in international arbitration mirrors (but is more pronounced than) the lack of gender diversity in the legal profession, both in Australia and the United Kingdom.

Role Percentage who are women
Law Graduates in Australia (2015)
62.3%
Newly admitted solicitors in the UK (2016)
61.5%
Senior Associates in Australia (2015) 60% 
Corporate Counsel – head of legal function (Australia and New Zealand - 2017)
50%
Lawyers in UK law firms (2017)
48%
High Court of Australia judges (2018) 43% 
Partners in large UK law firms (50 plus partners) (2017) 29%
Judges in UK Courts (2017) 28%
Federal Court of Australia judges (2018) 25%
Partners in major Australian law firms (2016) 25%
LCIA – arbitrators (2017)
24% 
Barristers in Australia (2015) 23%
LCIA – arbitrators (2016) 20.6%
ICC – arbitrators (2017)
16.7%
ICC - arbitrators (2016) 14.8%
Senior Counsel in Australia (2015) 10.8%
LCIA – arbitrators appointed by parties rather than the LCIA (2016) 8.8%
Managing partners in Australian law firms (2014)  3.4%
 

As these statistics show, at certain levels, the legal profession is increasingly diverse. More than half of law graduates are women, substantial percentages of judges are women, and 50% of corporate counsel who are head of their legal function in Australia and New Zealand are women.

The areas lagging behind are the percentages of women senior counsel and women arbitrators appointed by parties. A 2016 LCIA report notes that the improved statistics for arbitrations in that year were attributable primarily to LCIA nominations and not to appointments by parties.

Why is there a lack of gender diversity in arbitration?

The reasons for a lack of gender diversity in both the upper echelons of the legal profession and on arbitral tribunals are many and varied. Overt discrimination and unconscious bias no doubt are factors, but it would be simplistic to suggest that these are the only factors.

Careers which require long hours at the office or frequent international travel often will not be practical for women (nor indeed for men) with childcare responsibilities. These structural impediments are particularly pronounced in international arbitration which by definition operates across jurisdictions and often requires extensive international travel.

To compound this parties, rightly, are looking for senior, experienced arbitrators with a proven track record. As there are fewer women in senior legal roles, the pool of women available to be arbitrators is relatively small and parties can have limited access to information about suitable women candidates. It can be hard for both women and younger men to break in and get some "runs on the board", so the same arbitrators tend to be appointed again and again, creating a small pool of mostly male arbitrators who get older each year.

Why does gender diversity matter?

Apart from considerations of equity and equality, many in the arbitration community believe that diversity on tribunals improves the quality of decision making, as different perspectives lead to better decisions. This is backed up by evidence that financial performance in companies is better when there is gender diversity on the board.

Others have commented that improving gender diversity will introduce "fresh blood" on arbitral tribunals, which is necessary to maintain a sustainable pool of arbitrators. Widening the pool of arbitrators will also give greater choice and fewer conflicts.1 The goal of securing greater diversity in arbitral appointments extends to the full spectrum of diversity, not merely gender. There is much to be said for younger tribunals and for tribunals that reflect more effectively the breadth of talent available in the legal profession.

Chief Justice Allsop of the Australian Federal Court commented in 2015 that a "male-club-like-blokeiness in the conduct of litigation" can also alienate not just women, but people from other cultures. In his view, gender balance of the judiciary was one way of driving out that "blokeiness". The same would be true in arbitration.

Measures to promote the appointment of women arbitrators

Arguably, the most significant initiative to promote gender diversity in arbitration is the Arbitration Pledge. Those who take the pledge commit, among other things, to ensure that lists of potential arbitrators include a fair representation of female candidates and that gender statistics for appointments be collated and published. Senior and experienced arbitration practitioners pledge to support, mentor and encourage women to pursue arbitrator appointments and otherwise enhance their profiles and practice.

The commitments in the pledge are supported by large networks of arbitration practitioners, including most of the leading law firms globally, supporting the expansion of networks of women in arbitration and providing informal and formal mentoring programs such as the ArbitralWomen Mentorship Programme. ArbitralWomen also maintains lists of female arbitration practitioners.

Do these initiatives go far enough?

Although the early statistics suggest that the initiatives are making a difference, time will tell whether they go far enough. In this regard, there are lessons from the Australian experience with seeking to promote gender equitable briefing of barristers, where early initiatives were not as effective as hoped.

In 2004 the Law Council of Australia developed a Model Equal Opportunity Briefing Policy for Female Barristers and Advocates which was adopted by various members of the profession including this firm. But as time went on, it was felt that more needed to be done. As can be seen from the statistics above, only 10.8% of senior counsel in Australia are women and, despite an overall increase in the number of female barristers, there has been a concern that "progress towards a more equitable bar has remained slow", and that the statistics reflect a "glass ceiling" in the profession.2 Concerns about the slow pace of change prompted the Law Council of Australia to revise and strengthen its policy, culminating with the introduction in 2016 of the Equitable Briefing Policy.

The policy was strengthened in two ways in particular:

  • it now includes non-mandatory targets, with the long term aim that by 2020, women receive at least 30% of all briefs and at least 30% of the value of all brief fees; and
  • signatories are to provide a confidential annual report on their briefing practices and the measures taken to implement the policy.

While the targets and the reporting requirements arguably take the Equitable Briefing Policy further than the Arbitration Pledge, both initiatives have stopped short of imposing quotas on the profession. This no doubt reflects the importance of ensuring that all decisions about arbitral appointments and briefing counsel are based on merit – and that the goal is to counter any unconscious bias, or other structural impediments, that may be affecting these decisions.

Arguably the most useful aspects of both initiatives are their reporting requirements. It is likely that the decision to publish statistics by arbitral institutions has prompted those institutions to work harder to appoint women arbitrators when the opportunity arises, and this appears to be the principal reason why the statistics on gender equality in international arbitration have improved over the last few years.

And this is an important factor in driving change. Institutional appointments will give opportunities to women to get the necessary runs on the board to improve their chances of being considered for appointment by parties in the future.

The regular reports on progress required under both the Arbitration Pledge and the Gender Equitable Briefing Policy should also be an effective way of keeping these policies, and the measures required to support them, front of mind in the years to come.

Gender diversity is not the only issue

It must be said that the lack of diversity on arbitral tribunals goes beyond gender. There is also a lack of ethnic and regional diversity. Few statistics are available, but it has been noted that "minority ethnicities and candidates of non-Western geographic origin are blatantly under-represented" on tribunals.3 

The benefits of different perspectives to the quality of decision making apply equally to the ethnic and regional make-up of the tribunal and this is an emerging area of focus in the arbitration community. In a recent survey, 70% of respondents thought it was desirable for arbitral institutions to publish statistics on the gender and ethnic or national identity of appointed arbitrators.4 It is likely that the publication of statistics on the ethnic and regional diversity of tribunals would be key to enduring change in this area as well.


Authors: Georgia Quick, Partner and Camilla Wayland, Expertise Counsel.

________________________________

References:

1. Berwin Leighton Paisner, International Arbitration Survey: Diversity on Arbitral Tribunals.

2. Daniel Reynolds and George Williams, 'Gender Equality Among Barristers Before the High Court' (2017) 91 ALJ 483, 484, 487.

3. Berwin Leighton Paisner, International Arbitration Survey: Diversity on Arbitral Tribunals.

4. Berwin Leighton Paisner, International Arbitration Survey: Diversity on Arbitral Tribunals.


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