Muddling the issue

Muddling the issue

MEDIATION is the buzzword of the hour in the US. Even those who may not benefit financially from the process are full of praise for it. Some see it as a means to eliminate drawn-out litigation or arbitration and the inherent costs related to these protracted proceedings. Some see it as another layer of the legal system that, because of the non-binding concept, lets parties walk away and resume litigation or arbitration. Still others see it as another source of income.

In certain US jurisdictions, mediators in court-ordered proceedings act pro bono, whereas others command hourly rates equivalent to $400 or more. The success rate for pro bono mediators is apparently below fifty per cent, whereas the figure is roughly seventy per cent for well-paid mediators. What conclusion can be drawn from this statistic?

Does it confirm the old adage that you get what you pay for? Or is it the case that, because you charge a hefty fee, you must be good? On the other hand, when you get something for free, you really have nothing to lose. If a pro bono mediation fails, you haven't lost much more than time.

Should mediation be on a "no cure, no pay" basis, as suggested by some? Or, if mediation is to be dealt with in charter party cases, for example, should the brokers be brought back into the picture so that they can earn the full amount of their commission charged when they initially got the parties into a deal which later had to be resolved with outside assistance? Where will it end?

In a rare timely and pertinent comment, The Arbitrator, the journal of the Society of Maritime Arbitrators in New York, quotes SMA president Lucienne Bulow who, having outlined the mediation rules introduced last year by the SMA, says, "Although arbitration is still the preferred method of ADR, and the mediation rules are not intended to replace arbitration, there are definitely certain types of cases which could benefit from being mediated."

Despite these commonsense words, there does currently seem to be a tendency to try and muddle the lines of demarcation between various forms of dispute resolution. Why? If the parties have selected arbitration over litigation, for example, why argue or insinuate that they should have picked mediation? It is difficult to see who gains from this, other than those who, frustrated in their attempts to be arbitrators, can at least entertain hopes of mediating.

Alternative definitions

IN the UK, meanwhile, the Woolf Reforms, and the new Civil Procedure Rules which they spawned, give the courts far-reaching powers to order parties not to litigate. This should ease the workload of the courts, and encourage the growth in mediation which is gaining momentum even as this column is spell-checked. You can read about it elsewhere in this issue.

I don't know the man, but it strikes me that humour is not the long suit of Lord Woolf. We have already lamented his decision to expunge from the legal lexicon such terms as Anton Pillar and Calderbank in favour of more mundane alternatives. But I wonder what he would make of the list of popular alternative definitions currently circulating the chambers of UK barristers wherein the court is referred to as "the building where problems are solved", where the high court is "the big building where problems are solved", where having the ear of the court is "a new criminal offence under the criminal justice act", and where barristers themselves are qualified in terms too rustic to be repeated in a family magazine.

None, however, can hold a candle to Ambrose Bierce who, in his classic Devil's Dictionary, describes a litigant as, "A person about to give up his skin for the hope of retaining his bones". Under Woolf, meanwhile, a writ is a claim form.

Spread the word

MARITIME arbitrators in London are certainly doing their bit to speed up the process of dispute resolution, over and above anything which Harry Woolf is bringing in. In a recent newsletter, for example, it exposed such recurring abuses as the sending of lengthy faxes immediately followed by a posted hard copy. Its message was admirably clear, but it seems that it may not be reaching its intended audience.

In the latest issue of its newsletter, the LMAA says that the notes on procedural guidelines which it prints from time to time "should be noted and followed. This requires them to come to the attention of as wide a readerships as possible, particularly case handlers, whether in defence clubs, or solicitors' firms, or commercial organisations."

The LMAA then admits that its newsletter goes only to named members of the organisation, "who are far fewer than the persons who need to take notice of the practice notes". As a consequence, "...abuses...still continue."

This, to be kind, is stating the obvious. There is no point putting a Wet Paint sign at the top of the stairs only. Imagine, if you will, a shipping dispute which turned on the failure of one of the parties to make sure that all relevant information was circulated to all interested parties. What would the arbitrators say about such conduct?

Asking members to pass on the message to everybody who doesn't get its newsletter, as the LMAA has done, is one way of dealing with the problem. Printing more copies of the newsletter, and putting together a representative mailing list, is another. The former is unreliable and unprofessional, while the latter isn't. Any mention of the additional cost of pursuing the latter course should be treated with the scorn it deserves.

Arrested development

THE new ship arrest convention seems to be getting a good reception throughout the maritime world, with the notable exception of the US and peripatetic Belgians addressing Dutch treat luncheons in Florida. Inevitably, though, there are some minor quibbles.

The Swedish Club, for example, thinks an opportunity has been missed to compensate those parties who can demonstrate that a wrongful or unjustified arrest has taken place. The convention says a court may order counter-security as a condition of arrest, or in order to permit an existing arrest to continue. The Swedish Club argues, however, that it should say that the court shall order counter-security.

There is no question that counter-security can inject greater fairness into ship arrest, so why not say that the court must order counter-security in the appropriate circumstances? It ought not to be beyond the wit of the maritime world to change just one little word.

But it won't happen, at least not for another twenty-five years. And maybe it shouldn't. Remember, the long-overdue updating of the old arrest convention foundered for an age on the inclusion of two little words - "such as" - in the definition of a maritime claim. On this occasion, perhaps it would be better to remember four little words - "leave well enough alone" - and rely on the discretion of the courts to order counter-security where appropriate, rather than spending time campaigning for a change that will not come at a cost worthy of the passion expended on trying to introduce it.

Message management

WHILE everybody was wondering a couple of months ago whether the world might come to an end when the calendar ticked over to 2000, I was reading an arbitration which gave me pause for thought.

The time-chartered owner of a vessel had missed an important telexed message from the original owner because its office was unattended between December 30 and January 2 on account of national holidays. This happened a few years ago, not in 1999, but you get the picture.

The arbitrator said, "One is only left to wonder what, if anything, would happen if a true calamity befell any of the owner's ships during such a holiday period." He has a point. We are all entitled to our holidays, and too few of us take enough of them. But if you're running a bulk carrier to tight deadlines through big seas, you should at least pick up your messages over Christmas and the new year.

Shipping regulate thyself

IT may be hard to believe, but it is not far short of two years since the first phase of compulsory ISM Code compliance came into effect. A lot of people have a view on how effective it has been.

The Swedish Club says ISM ships have a better claims performance in terms of both hull and P&I. This is a powerful argument, presuming we are comparing like with like.

Norton Rose, meanwhile, has been doing its own research. A year after first-phase implementation, it reports on a change of mind by the owners and managers who completed its ISM questionnaire. About a third of those who had previously thought that the code would not only improve the standard of the better owner/managers but also the lower quality operators, now think differently. This, says Norton Rose, is "worrying". It is also confirmation, yet again, that it is not so much the regulations in shipping that are a problem, but their enforcement.

Anybody looking for a good example of how self-regulation might work could actually do worse than look at the IMO guidelines on shipowners' responsibilities in respect of maritime claims which were recently adopted by the IMO assembly in London. The guidelines are predicated on the understanding that the right to limit liability should be balanced by a duty to ensure that adequate insurance cover is in place. This looks like a genuine expression of a commitment to quality through self-regulation rather than legislation.

Law for the lay man

ARBITRATION, depending on who you speak to, can be anything but the quick, just and cost-efficient alternative to litigation that it apparently started out life as. It is important to keep these things in perspective, of course, but I heard a true story last week about a lawyer who came away very angry from a dry shipping arbitration in London.. She wasn't angry at having her argument thrown out, but at the fact that one of the three arbitrators in the room had actually fallen fast asleep during the proceedings.

IT had to not happen

IT comes as no surprise to me to learn that litigation is currently progressing through the US courts to determine whether or not it is possible to recover millennium compliance costs under the sue & labour clauses in insurance policies.

The reason that such action is being contemplated , of course, is the fact that the millennium bug turned out to be the biggest dud since Billy Bunter's postal order - in shipping, as in every other industry. The only shipping-related problem I have heard about was the one experienced at the port of Santos, where the inability of the port's software to read last year's customs declarations reportedly caused a minor glitch.

It turns out that a lot of money has been spent, unnecessarily, on achieving millennium compliance and insuring against its failure to work. But I fail to see why IT consultants, and insurance underwriters for that matter, should pay for our neuroses. They were hired to create an impression of order in the mind of an international business community that had been persuaded to accept the probability of chaos and ruin. Even if they did it by legerdemain, smoke and mirrors do not come cheap.

It is easy to be wise after the event, especially when your IT consultant is buying his shirts in Jermyn Street. But my own preferred solution to the millennium bug was always to wait and see what happened at midnight on January 31 in New Zealand, and then react accordingly. This would have won me few friends in Wellington, but would at least have had the merit of enabling me to trouser the exorbitant fees I eventually paid to my computer consultant.

Busy doing something

THE Society of Maritime Arbitrators in New York reports that, "Over the past twelve months, seventy-three New York arbitrators were involved in at least one arbitration." Resisting the temptation to point out that this must have been one hell of an arbitration, we should take on board the true message.

The SMA says it continues to find broad participation of its members in New York arbitrations every year. This flies in the face of perceived intelligence, which has long queues forming two-deep outside the doors of established, fashionable arbitrators, and the phone never ringing in the homes of the great untried and untested.

Generally speaking, parties to disputes are supposed to be attracted to arbitrators with clear diaries in the same way that hungry people are seduced by thin chefs. So what the SMA reports is good news, the more so since it adds that twenty-eight arbitrators participated in more than two arbitrations last year.

Even today's busiest arbitrators were once callow, fringe players who couldn't wait to tell their parents about their first appointment. And, contrary to popular belief, there is no reason to believe that things are any tougher for the aspirants of 2000. In New York, if they have the right stuff, today's panel chairmen have every chance of becoming tomorrow's busiest arbitrators.

Only words

ON the whole, lawyers make poor journalists. Journalists prefer not to be confused by facts, while lawyers make a living dissecting them. Lawyers, too, are hopeless at writing to length, and without footnotes.

For this issue of the magazine, a lawyer submitted an article for publication which was 18,372 words in length. I exaggerate not. Offhand, the only thing I can recall which is longer and more tediously unhelpful is John Guy's explanation of tonnage measurement for ships, which - in either its long or short version - is a monument to insomnia.

Asked to resubmit the article, the lawyer whittled it down to 18,001 words. Finally, after several more tries, he got it down to 1,473. It was only then that I realised we had already covered the subject.

Many lawyers have the time to write a long article, but not a short one. That, I suppose, is why we have to suffer editors.

With honours

TALKING about wordsmiths, I must say how delighted I was to hear that my friend and former colleague Michael Grey was awarded an MBE in the New Years Honours. By dint of his ability to combine practical shipping knowledge and experience with a natural flair for writing and a lovely sense of humour, Michael has consistently demonstrated how very few people there are who can actually do just that. It's okay to be funny and intelligent and provocative for the odd article here and there, but you try doing it every week for thirty years.

Having spent a number of years helping Michael with his syntax, and offering him the odd adjective here and there, I had been hoping there might be something in the post around Christmastime for me, just as Michael's purple envelope was winging its way to Harrow from Buckingham Palace. There was. Michael got the MBE, and I got a pair of corduroy trousers, which is about right. A cat may look at a queen.

Time piece

IT has been said that, when a man gets to be over seventy, he boasts about his age, when he passes eighty he's very liable to lie about it, and when he's ninety he will throw his wig in the face of any man who insinuates that he isn't the oldest man in the world. There are exceptions, though. My next-door neighbour was as fit as a butcher's dog and as sharp as paint at the age of 93, and not the least defensive about his age.

T S Eliot once wrote,"I grow old, I grow old, I shall wear the bottoms of my trousers rolled." This memorable description of advancing years has always been a favourite of mine but, just occasionally, I find it inaccurate.

I defy you to find me a more dapper man than Nick Healy of New York law firm Healy & Baillie, who celebrated his ninetieth birthday last month, and who still goes into his Broadway office on a regular basis.

Nick was tempted away from his first job, at a New York insurance company in 1934, by the offer of a $14-a-week paycut on his $1,500-a-year salary. He was fickle in those days, but it looks like he might stay at Healy & Baillie now and make a go of it.

Mistaken identity

IN The Years With Ross, James Thurber recalls how Franklin Adams took Harold Ross, the legendary founder of The New Yorker magazine, tobogganing one wintry afternoon in the 1920s, somewhere in Connecticut. A few days after that, at the Algonquin Round Table, someone asked, "What does Ross look like tobogganing?"

Adams replied, Well, you know what he looks like not tobogganing."

Well, we had our own identity crisis in the last issue of the Advocate, getting the captions mixed up on our US Gulf report. The end result was that George Chandler of Hill Rivkins was portrayed as Eugene Silva of Vinson & Elkins - or was it the other way round. Not content with that, we also captioned Houston as New Orleans. Apologies all round.

Foggy outlook

WORD reaches me that a German professor has invented a fog-clearing device which fires tiny pieces of frozen carbon dioxide into the air at high velocity, thereby absorbing fog and dissolving it. The device, it is argued, could - among other things - help ships navigate safely to port.

I failed science at school, but the concept of releasing frozen air into unfrozen air in order to dispel polluted air is beyond my comprehension. And never mind that it is good seamanship, advanced technology, not a little luck and the lure of a fat payday that navigates ships safely into port. Even if the fog-disperser stands up scientifically, the only man I know who might have accepted that it could have a place in modern merchant shipping died half a dozen years ago, peacefully.

Headlines

OUR fascination with headlines continues. A recent issue of Tradewinds, which is excellent and essential weekly reading for anybody involved in shipping, claimed, "Gibsons poaches brokers". In my day, we used to fry 'em.