The math is not hard: the numbers readily prove that international arbitration is not diverse. (Inclusivity is another issue.) Harder is to quantify the impact (if any) on arbitral justice. Harder still is to identify, confront. and accept our role in the causes, which is the first step in finding workable solutions. Long experience suggests that it is caution, habit and, yes, bias that underlie our non-diverse practice.
Lucy F. Reed: Thank you, and welcome to all. I see so many good friends here, who are absent from my life so far away in Singapore. And of course, I share the sadness in not seeing David Caron here today. David is a friend of over thirty years. We were both Presidents of ASIL and Chair of ITA and had many opportunities together to scheme about these organizations and many other things.
I hope that you all are here not because you think I have all the answers to diversity issues and challenges in international arbitration. I certainly do not. I am better equipped to pose the questions than the answers. My personal preference is to take action to further diversity in international arbitration by teaching associates and students, by sponsoring, by networking, by appointing women and minorities to tribunals, and also by stepping back and making room in the front of the stage for the next generations. As such, I do not do that much speaking anymore and I frankly feel uncomfortable to be viewed as part of the story of successful women in arbitration. I would rather make things happen.
I hope that you all are here not because you think I have all the answers to diversity issues and challenges in international arbitration. I certainly do not. I am better equipped to pose the questions than the answers. My personal preference is to take action to further diversity in international arbitration by teaching associates and students, by sponsoring, by networking, by appointing women and minorities to tribunals, and also by stepping back and making room in the front of the stage for the next generations. As such, I do not do that much speaking anymore and I frankly feel uncomfortable to be viewed as part of the story of successful women in arbitration. I would rather make things happen.
Nor have I written much directly about diversity. Exhibit A of the small number of highly-visible women in international arbitration—and this makes me laugh—is the fact that I am often mistaken for Lucy Greenwood, who is here today. Recently, I was at a conference where a man came up to me and said:
“I really like your recent article.”
I said: “Oh really, which one?”
He said: “You know, the one about diversity.”
I said: “I really don’t think I have written about that recently.”
He said: “Oh yes, you have. I am sure you have.”
I said: “Really, I am not Lucy Greenwood.”
And he said: “No, I’m sure you are.”
There are not that many “Lucy’s.” I am the tall one for anyone who wants to know. Humor aside, I think it is important to keep the hard facts and challenges front and center.
The first question is why is diversity important? I think we all know the answer. We practice in a diverse global world with diverse disputes and therefore the people who resolve those disputes should be diverse and representative.
The second question is, whether there is diversity now among arbitrators and lead counsel? The answer is no, not so much, and not as much by far as there should be. I think when we talk about this we have to keep in mind that arbitration tribunals are only three- or one-person strong. Women are not a minority, but we cannot aspire to 1.5 women per tribunal. We have to be looking at the broader pool of candidates to serve as arbitrators and lead counsel. That is what I call the “pool of experience.”
Recently, I saw the headline about the first known three-woman tribunal. I am not sure what I think about that, because it may raise questions about whether that is diversity—to have three women on a tribunal? Does that mean it is okay to have three men on a tribunal now? Of course the answer is no. It depends on the overall picture. But a three-woman tribunal does ring like a “Man Bites Dog” kind of headline. I remember when Chief Justice Beverly McLachlin from Canada was speaking about diversity and the judiciary at the ASIL Annual Meeting a few years ago. She said: “Won’t it be nice when we get to the point where there aren’t headlines about appointments of women or an all-woman tribunal or more than 50%?” And the answer is it will be, but we have a long way to go for that.
As I was thinking about what I could say about diversity writ large, I put my thoughts into the (partial) equation that is the title of my talk: “Caution + Habit + Bias.”
This equation equals what? Caution + Habit + Bias equals, or causes, low levels of diversity in international arbitration. This is my personal view after some 30 years in this practice. I wonder if we cannot change this equation.
I start with caution because states and private parties will continue to be cautious and conservative about appointing arbitrators in cases of any magnitude. Why is that? Because when we are talking about arbitration, we are talking about awards that are non-appealable and enforceable relatively easy around the world. It is like sudden death (except it is not so sudden or fast anymore). In any case, these are not disputes that any reasonable party is going to entrust with anyone but the most experienced arbitrators.
Who is in that group is another question. This requires a brief reprise of the history of international commercial arbitration. I have been struck that some of the young practitioners are not aware of this history.
The key point is that no one started out to discriminate. If we go back to the ‘80s and ‘90s, arbitration was not a popular field of practice. With some exaggeration, it was not even a recognized field of practice, except for some Swiss professors. For example, when there were major Gulf oil disputes and Alan Redfern and Martin Hunter started practicing international commercial arbitration at Freshfields in the 1960s and 1970s, there was no international arbitration group. Actually, there was not even a litigation group at that time. Arbitration was seen as risky and perceived as soft. Alan and Martin, as some of you know, recruited Jan Paulsson in Paris, as another new specialist in arbitration. And there was born one of the first, if not the first, international arbitration groups within major firms – without any certainty of success. Other excellent practices have followed, mostly in Europe, New York and the US “oil patch.”
When international arbitration accelerated later, I would say in the ‘90s, in the wake of the Iran–U.S. Claims Tribunal and with increased foreign investment and bilateral investment treaties, there was a small cohort of experienced practitioners. As is generationally true of law firms and faculties at the time, it was predominantly men from western European commercial capitals. The parties new to this field—understandably—were cautious in appointing arbitrators from that cohort. They are still doing so, when it is no longer warranted.
The good news is that there is growing diversity in the number of experienced arbitrators in the growing pool of experience. Yes, the growth is slow. Given the high stakes in international arbitration, caution in appointments from the pool of experience continues.
Caution has to stay a factor in my equation. We cannot change it.
What can we change? This brings me to my second factor – habit. We know who we know. And so, when we look for arbitrators or lead counsel, we list people we know, rattling off our favorites. I am as guilty as anyone. The Equal Representation in Arbitration Pledge—which was launched by an ambitious and energetic group of women, including my former Freshfields partner Sylvia Noury—is important. I purposely took a backseat in the development of this, so the younger women have more space. I did go to some of the dinners at which the Pledge idea was floated for discussion. I remember one in Hong Kong where the head of a leading international arbitration group—a man—described how successfully the Pledge was working for his group. He called it the “five-minute rule,” by which he meant if the team took just an extra five minutes in listing names, they could and did think of names of experienced women, younger practitioners and non-Europeans. I follow this rule. How hard can it be? It is not rocket science to think more pro-actively about our appointments and recommendations.
The names that come up in that extra five (or more) minutes may not make it on your final list for a particular case, because they are not the right fit. Similarly, even though certain candidates make it on the list, they may not be selected for appointment. But, at least, those names get into play. They get into circulation. They get advertised and noticed. They start coming to mind—ideally by habit—and become part of a bigger pool.
As a (now former) Vice-President of the ICC Court of Arbitration, approving and observing arbitrator appointments, it is not a breach of confidence for me to tell you that there are many strong and diverse people sitting in arbitrations who are unknown to everyone in this room. I am also happy with the new ICC practice of posting on its website the names of all arbitrators in all cases, because this transparency allows more names to get into circulation. There is no breach of confidentiality as the tribunals are not matched to cases or parties. I would like to see other institutions do the same.
The institutions, we know, have long been better than parties in appointing diverse arbitrators. I have heard that the percentage of party appointments of women and minorities also is noticeably going up, since the Pledge was launched. To me, it is a positive sign that counsel are taking those extra five minutes.
I propose that we remove the factor of habit from my equation, because it hinders diversity unnecessarily.
Now, I come to my third and final factor, which is bias. We all have to acknowledge a very thin boundary between habit and bias, especially unconscious bias. Habit is knowing and selecting the people we know; bias slides into knowing and selecting people just like us. We all have biases. We should admit it.
The challenge is to recognize and confront and neutralize – or try to neutralize – our biases. This takes more than five minutes when we are building lists of potential arbitrators or lead counsel. This takes affirmative research. This takes going out and looking for new names and new people, which is why it is important to have more publicly available information on the pool of experience.
I am not sure whether habit or bias is more responsible for the discouraging statistics, but I think it is bias. I will tell you why. It is the mysterious 16% diversity ceiling. The surveys and the institutional data show fairly consistent percentages of women arbitrator appointments. In Lucy Greenwood’s research to mark the one-year anniversary of the Pledge, she points out that some 17% of total appointments in 2016 were women.1A Year of the Pledge: New Data on Women Arbitrators, Global Arbitration Review (May 17, 2017)1 Professor Susan Franck’s survey from the 2014 ICCA Congress shows that 17.6% of total appointments were women.2Susan D. Franck, James Freda, Kellen Lavin, Tobias Lehmann and Anne Van Aaken, The diversity challenge: Exploring the “Invisible College” of International Arbitration (2015)2 The International Centre for Dispute Resolution’s 2015 survey – 16%.3White & Case, Arbitral Institutions Response to Parties’ Needs (Apr. 10, 2017)3 The 2017 ICC Statistical Report – 16.7%.4International Chamber of Commerce, ICC Court Releases Full Statistical Report for 2017 (July 31, 2018)4 The LCIA in 2015—16% (now up to more than 20%).5London Court of International Arbitration, LCIA releases 2017 Casework Report (Apr. 10, 2018)5 The Hong Kong International Arbitration Centre’s survey of 2016 –11.5%, now 16.5%.6Hong Kong International Arbitration Centre, 2017 Statistics6 An outlier: in the Singapore International Arbitration Centre, women appointments are now up to 29.7%.7Singapore International Arbitration Centre Annual Report (2017)7
Professor Debora Spar, who was one of the youngest female professors to be tenured at the Harvard Business School and who went on to become President of Barnard College, wrote a book in 2013 called Wonder Women.8Debora L. Spar, Wonder Women: Sex, Power, and the Quest for Perfection (2013)8 In that book, Professor Spar documented what she called “the 16% delusion.” She noticed that in every think tank report and at conference after conference the data repeated across different industries and sectors: 16.6% of Fortune 500 board members, women; 16% of partners in major law firms, women, 19% of surgeons, women. This despite the fact that as early as 1994 women accounted for 50% of graduating physicians, 46% of graduating lawyers, and 48% of Ph.Ds.9Id., at pp. 177-178.9
Why is this? Why is this 16% ceiling there? One reason may be that 16% is deemed “good enough”, regardless of the total size of the pool. Those who are graduating or hiring women may think that they have done well enough when they hit about 16%. At that percentage, they do not look for women for relevant vacancies unless and until a woman resigns or leaves her seat. In international arbitration, this probably translates to: “Look at me. Am I not great?” I appointed a woman to my last tribunal, and so I get a pass for a while.” This is far from looking for genuine diversity from the pool of experience, based on the requirements of each new case and the overall balance of tribunals as we appoint person after person or tribunal after tribunal. To me, the 16% ceiling looks to be influenced by bias.
Let me raise one more statistics point. This goes to unconscious bias, which many think is now gone. My statistics come from the Berwin Leighton Paisner 2016 diversity survey.11Berwin Leighton Paisner, International Arbitration Survey: Diversity On Arbitral Tribunals - Are we Getting there?11 Among other things, they found that 84% of participants said there are too many male arbitrators, but only 12% said that gender is important or very important. That means that 72% actually are not concerned about gender, despite what they said. When asked whether tribunals should have gender balance, assuming equal qualifications, 50% said this is desirable, 41% said it makes no difference, and 6% said affirmatively that gender balance is not desirable. Really, what is that about in this day and age?
I have some positive biases about arbitrator appointments. One is my bias for mid- to senior-level women arbitrators. The reason is not “just because.” I have thought about this carefully: I cannot think of a woman arbitrator with whom I have sat or worked who is not always fully prepared, hands-on, careful and responsible.
My second positive bias is for youngish arbitrators. By youngish, I do not mean novice. I increasingly find myself unpopular in urging young practitioners not to lobby so hard for arbitrator appointments, at least in substantial cases. This is because, in my view, they are not ready for the responsibility of deciding cases. They lack the mileage necessary to build the judgment required. Indeed, I would say that their impatience to be arbitrators too early shows a lack of judgment. Further, a mistake early in one’s career can lead to a poor reputation.
At this point, I want to delete bias from my equation.
I now turn to the topic of inclusion. The title of this Conference is “Diversity and Inclusion in International Arbitration.” My keynote title in publicity said in parentheses that inclusion is another matter than diversity. I was taken to task on this by my friend Judge Gabrielle Kirk McDonald, who wrote: “Inclusion is not another issue, it is the real issue.” Judge McDonald is right in the normal sense of the term. But I am not talking about inclusion or exclusion of people from arbitrator appointments because of race or gender or even experience.
What I mean is that, in international arbitration, we are extraordinarily inclusive in terms of training, educating, and welcoming newcomers. Look at the conferences, the trainings, the LLM programs in international arbitration. Look at the publications, the blogs, the Willem C. Vis and other moot competitions, the young arbitrator groups. The participants in all these activities – the conference audiences, the students, the young and old arbitration practitioners – are extraordinarily diverse. My corporate partners used to say to us: “What are you arbitration lawyers doing? Why do you give away your hard-earned experience and intellectual property to your competitors, with your books and your speaking about how to practice international arbitration?” My answer was because we want to include more people, with more diversity, in the international arbitration community.
This is why I am adding the factor of inclusion to my equation, with some caveats. On the one hand, I think this kind of inclusivity is good, because it helps build the pool of experience. On the other hand, I must voice my one note of concern about our inclusivity, which probably is an unpopular note. I increasingly wonder whether we are over-inclusive, given that this type of inclusion does not lead to actual work for a broader group. International arbitration is a small field. I do not agree with the conventional wisdom that it is growing. We enjoy superb training conferences, including the pioneer ITA Dallas workshop and this joint ASIL-ITA program, but how many more should there be? How many more should we be supporting, at the expense—in substantial time and funds—of young and other aspiring entrants to a limited field?
Judge McDonald wrote to me: “Please do not accede to the time-worn excuse that we cannot find qualified arbitrators who are minorities.” I definitely do not. I do not accede to that, because we surely can find them. My point is that I fear we have too many qualified arbitrators and lead counsel, of both genders and many races and nationalities, to fill the arbitrator positions available in the market.
This means that those of us who are already up on stage need to redouble our efforts to see that the positions available are filled with more diverse arbitrators and lead counsel, whose names may not surface in a five-minute identification exercise. This also means that those of you wanting to enter the field must be realistic about prospects, and be both persistent and patient – always persistent and somewhat patient.
This is the final equation I reach, including both factors and a result:
The factors of habit and bias are out. The factor of caution stays in. The factors of reasonable inclusion, patience, and persistence are added, to achieve yet better diversity.
I look forward to listening to the panel discuss solutions. I hope one is extending the Pledge or encouraging pledges for other diversity categories, as I see the success of the Pledge as some evidence that my equation is good math.
Thank you.
Flores Commentary
Gonzalo Flores: Thank you, Lucy. Good morning everyone. Thank you very much for being with us today on this surprisingly sunny Washington D.C. morning. Allow me to start by thanking Lucinda Low and the American Society of International Law; Abby Cohen Smutny and the Institute for Transnational Arbitration; and, Won Kidane and Caroline Richard, the two chairs of this conference, for their invitation to participate in this event. I am delighted to be here, surrounded by so many friends, both in the discussion panels and on the floor. I would like to join Abby, Lucinda, and Lucy in remembering David Caron who was a close friend of ICSID and a personal favorite of mine.
I am particularly honored to be commenting on the keynote remarks by Lucy, whom I have known for many years as a formidable counsel, arbitrator, and expert in international law. I must confess that I am terrified to speak about diversity, following on the steps of Lucy. However, being a middle age male, I have a completely unfounded and undeserved confidence in my capacities. So, here I am.
I would like to focus on two points that I think I can synthesize from Lucy’s remarks. I am going to call them “Talk the Talk, Walk the Walk.”
On “Talk the Talk:” In her remarks Lucy noted that she rarely speaks or writes about the particular topic of diversity and inclusion. The same applies to me and to many others who have been practitioners in the field of international law for a long time. The fact that we are talking about this today is extraordinarily important. One of the key factors of any form of exclusion or discrimination is that during a first stage, the excluded groups are not heard by the mainstream. For example, the lack of women in the legal profession is not a new problem. It is an old one that women have been discussing for quite a while. The good news is that the problem has become mainstream enough to be addressed as a general problem discussed within the broader legal community.
Just two months ago, I sat on another ASIL panel called “Women in Arbitration.”1ASIL, Women in Arbitration Panel (Jan. 10, 2018)1 Like that one, many other conferences are being organized to explore this important issue of diversity in international arbitration. When I joined ICSID in the late ‘90s, this was not a topic of discussion (nor was transparency, for what is worth). This may come as a shock for the younger practitioners, given that international arbitration is, by definition, a mechanism that seeks to peacefully resolve disputes between a diverse group of parties, subject to different legal systems, and represented by a diverse pool of counsel. It should be a natural consequence that these disputes are decided by a diverse pool of adjudicators. That the matter was not even a topic of discussion is flabbergasting.
Lucy mentioned in her remarks that women cannot aspire to 1.5 women in a three-member tribunal. Maybe that aspiration should be three women in the three-member tribunal. In 2016, in a National Public Radio interview Supreme Court Justice Ruth Bader Ginsburg, speaking about her experience as a woman on the U.S. highest court, was asked: “How many women in the Supreme Court would be enough?” Justice Ginsburg’s reply was: “When there are nine.” She then added, “For most of the country’s history there were nine, and they were all men. Nobody thought that was strange.” The point that Justice Ginsburg was trying to convey was that we will not accomplish the task of having a fully inclusive system until the topic of diversity and inclusion is no longer a matter of discussion in academic and professional fora but has become the norm. Until a three-female-arbitrator tribunal is no longer the “Man-Bites-Dog” headline referred to earlier by Lucy. Until conferences like this one are no longer needed.
To some extent, our industry is “Talking the Talk”; initiatives like GQUAL2GQUAL is a global campaign that seeks to promote gender parity in international tribunals and monitoring bodies. See GQUAL Website: http://www.gqualcampaign.org/about-gqual/.2 and The Pledge are positioning gender diversity at the forefront of the discussion.
In preparation for this conference, I mentioned to one of my (few) male colleagues at ICSID that I was going to be speaking about diversity. He immediately said: “Well, you should talk about the large percentage of female counsel working at ICSID.” When I said diversity, he immediately though ‘gender diversity.’ Diversity should be more than that. Gender diversity is key, but we should expand the concept. The important point is that the issue of gender diversity has already been implanted in our industry.
I also note that in Lucy’s remarks, when she referred to the “Five-Minute Rule,”—on this point it is worth emphasizing that a serious amount of time and thinking should be allotted to the appointment of arbitrators—she stated that through this extra time of pondering, counsel could come up with more names of: (1) women with solid experience, (2) younger practitioners with solid experience, (3) non-Anglo-Europeans with solid experience. I do not know if this was on purpose, but you can see that there was an order: first, gender diversity; second, age diversity; third, geographical diversity. We have, all of us, this bias. We are focused on gender diversity, which is key, but we need to expand the scope of what we think as diversity.
In a way, this is a three-phase process. There is a first phase, where exclusion is so strong that no one talks about the issue. That was the situation 20 years ago. There is a second phase, where the issue is firmly positioned in the mainstream discussion. I think that is where we are today. We are discussing this very important topic. And there is a final phase, where we no longer talk about these issues because it is no longer a problem. Progress undoubtedly has been made, but until we reach this new normal, it is important that we continue “Talking the Talk.”
Now let us “Walk the Walk.” ICSID plays an important role in enhancing diversity in the international investment dispute settlement system. We have taken numerous and concrete steps to address the diversity imbalance in the field and we are making ourselves accountable by publishing this data.
ICSID regularly collects data on the appointment of arbitrators in ICSID proceedings. You probably have seen our statistics, which are published biannually. Lucy referred to the ICC’s new practice of publishing all the names of arbitrators. ICSID has been doing this since its inception in 1966. We have taken important steps to increase the representation of arbitrators, male and female, from all parts of the world, in international investment arbitration and conciliation cases.
Let us look briefly at some data. I do not want to bore you with statistics. On the participation of women in international arbitration, ICSID’s data shows that between 1966 (year of ICSID’s establishment) and December 2017, more than 2,200 appointments were made to ICSID tribunals and annulment committees, yet only 9% of the appointees over that period were women. That is below the rule of 16%. This is disappointing, for sure, but there has been an improvement through the years. In the calendar year of 2017, out of the 195 appointments made to ICSID tribunals and annulment committees, 19% were women. This is a large increase. This includes an increase from the previous year, 2016, where only 13% of the appointees were female. We are breaking the 16% rule. The improvement in gender distribution also affects and improves other diversity metrics. In 2017, out of the 37 appointments of women, there were 18 different individual names and they were nationals of a dozen different States.
It is important to remember that in most ICSID cases, the instrument of consent to arbitration calls for party appointment, with appointments by an institution generally being the default measure. As a result, a large number of the appointments are made by the disputing parties. Roughly 75% of the arbitrators is appointed by the parties, not by ICSID. It is interesting to note that, as reflected in ICSID’s Annual Report for the year 2017, 14% of all appointments involved women. Out of this 14%, 87% were appointments made by ICSID or the respondent State. The remaining 13% were appointed jointly by the parties. In other words, in 2017, not a single woman was appointed by claimants individually or by the co-arbitrators. Given the prevalence of party appointment in ISDS, parties, their counsel and party-appointed arbitrators clearly play a key role in advancing diversity in ISDS. It is important that we all “walk the walk”.
ICSID has incorporated diversity awareness in its best practices for appointing individuals to ICSID tribunals, conciliation commissions and ad hoc annulment committees. For example, when it is called to appoint an arbitrator, ICSID always includes at least one woman among the candidates it proposes in a list or ballot compiled for the parties, and this has increased the number of women ultimately appointed to tribunals and committees. Similarly, we often encourage member States to consider diversity when making designations to the ICSID panels of arbitrators and conciliators. This is specifically mentioned in a note in our website called “Considerations for States in Designating Arbitrators and Conciliators the ICSID Panels” where we expressly say, “ICSID has actively sought to diversify the profile of candidates for appointment in the ICSID cases and encourages the designation of qualified persons of any gender, age, or national origin.”3Considerations for States in Designating Arbitrators and Conciliators to the ICSID Panels3
As part of “Walking the Walk”, in 2017 the Chairman of ICSID Administrative Council made, for the first time, 10 appointments to the panel of ICSID arbitrators in equal numbers: five women and five male candidates. Also, ICSID provides practitioners in the field, male and female, opportunities to showcase their expertise in publications like the ICSID Review where we publish notes and articles on contemporary issues in international investment law and ISDS in Spanish, English, and French. This is a great opportunity for younger, new arbitrators from different geographical origins to showcase a breadth of expertise that may not be available everywhere.
Finally, we reflect our commitment to increase diversity in international investment arbitration in the composition for our own Secretariat. We have over 30 nationalities. We have the capacity of speaking over 25 languages and women comprise over 74% of the ICSID staff, including assistants, counsel, financial officers, a deputy Secretary-General, and the Secretary-General.
There is no doubt that there is still a significant distance to go to achieve greater diversity in international arbitration in all the different aspects I have mentioned. However, there is much to be optimistic about. We have seen concrete changes, not just from a statistical perspective but also in the willingness of the parties, their counsel, and institutions to consider diverse arbitrators and “Walk the Walk.”
As I have said, gender diversity is key, but diversity is more than that. It has to be broader. Lucy mentioned today that she has been mistaken for Lucy Greenwood many times. Well, I have been called ‘Gustavo’ many, many, times. In recent days, a distinguished arbitrator while handing me a document for comments, said to me: “I expect to be in ‘fair, if demanding’, hands. Shouldn’t it be everyone’s goal to have a ‘fair, if demanding’, process for the selection of arbitrators?”
Thank you very much.
