Too much

Too much

THE publication of reasoned awards has been described - quite rightly - as an attraction of maritime arbitration in New York. While London has fiddled and fudged its way round the issue, New York has continued to have the courage of its convictions. And it does take a certain amount of courage, because published awards are inevitably going to be read by other parties, other lawyers and other arbitrators, who are free to draw their own conclusions about the reasoning powers of a panel, and its ability to write and articulate its views.

There can be no doubt that publication of New York awards has exposed - and perhaps led to - some excesses which have not been beneficial to the overall process. Brevity is supposed to be the soul of wit but, in arbitration, it is more often the soul of clarity.

No-one will ever win a Pulitzer Prize for writing awards, but you have to wonder about the ultimate purpose behind some of the awards that have been published. Of course, they are intended to impart the decision, but they also seem to be written for self-gratification and increased fees, with the order of importance sometimes left in doubt.

Not too long ago, the chairman’s fee in a case was double that of one of the other arbitrators. The disparity was attributed to the award-writing and, in particular, to the length of the award. The parties to the dispute were not the only ones who thought the award too long and the fee too high.

It seems that some arbitrators have forgotten why the process was created. Arbitration was meant to be speedy, and less costly than litigation. That being the case, arbitrators should understand that the process belongs to the principals. The arbitrators are in place to carry out the contractual wishes of the parties, and not to satisfy their own intellectual or economic needs.

Some years ago, a dissenter wrote more than 230 pages - responding to a 33-page majority opinion - in a New York maritime arbitration. Thereafter, he stopped arbitrating, not because he made enough money from that case, but because he had arguably lost credibility.

You don’t have to be a soothsayer to know that publication will come to London maritime arbitration. It has to, despite the pusillanimous, selective, one-eyed diktats of those currently at the top of the process. We trust that New York and others will continue to publish their awards, and shame London into doing the same. In the meantime, though, there has to be a balance in order to achieve what is reasonable and necessary, so that it is enough but not too much.

Fine line

THERE is a fine line between enough and too much. Sometimes, the distinction is blurred still further by unrelated conditions or events, or by personal perceptions. Some of this is unintentional. On other occasions, there is purpose to the act.

One arbitrator tells us he recently sent out a statement for a panel’s fee and expenses after the parties had settled the case. A few days later, one of the attorneys called and asked whether it was the panel’s full and final fee, as the amounts seemed to be too low. The arbitrator responded that the panel considered the fees appropriate and proper compensation for services rendered. Strangely enough, although one party paid within a day or so, the fee from the inquiring party remained outstanding.

Is there a lesson here for arbitrators? If they charge more, do they get paid faster, or get quicker attention?

Bad habits

TALKING about getting paid faster, this is something that London arbitrators would like to see happen. Indeed, they have taken steps to make it happen.

We heard recently that maritime arbitrators in New York were contemplating adopting the London procedure whereby payment of fees is due when the award is issued, rather than - as is customary - waiting thirty days for payment. They would be right to do so, but London has problems of its own.

LMAA president Mark Hamsher has recently written to members, noting, “It has become clear that arbitrators are now experiencing problems with bad debts that previously never arose. The committee has been made aware of many examples of seriously delayed payments or even complete refusals to pay interlocutory charges or the costs of awards.

“That is often unfair because, unlike solicitors or clubs who can satisfy themselves as to the creditworthiness of their clients or members or insist on payments on account, LMAA arbitrators cannot insist on money being paid on account before they do any work on a reference.

“… the LMAA committee … think it would be very unattractive to the users of London arbitration if the LMAA were to adopt the practice of some arbitral bodies and insist on the payment of significant deposits before an arbitration could be commenced. That would not only lead to delays, but it would also generate an enormous increase in administrative costs which would be to the detriment of everybody.”

To cut a long story short - which might actually make a fitting mission statement for the profession of arbitration - the “general feeling” at the LMAA seems to be that interim invoicing of significant interlocutory charges on a six-monthly basis should at least alleviate the problem. It would certainly concentrate the minds of the users of the system, and it would almost equally certainly cut down on interlocutories.

The LMAA should upgrade its general feeling to a tablet of stone. Bad debts are bad news.

Seeing double

TALKING about interlocutories, how many arbitrators have sat staring dumbly at their fax machines after a 35-page brief has eaten the last thirty pages in the paper tray? While they are still wondering about the missing pages and trying to refill the paper tray, the courier service delivers a hard copy.

A number of arbitrators have asked us just what counsel expect to achieve by this. Do they envisage arbitrators jumping up to read the fax transmission, possibly ruining their dinner in the process? Or is it an attempt to show expedience? If the fax transmissions are necessary to meet deadlines, is it not enough to simply fax opposing counsel, and send a transmittal confirmation to the arbitrators?

I don’t know the answer, beyond the fact that too many lawyers are convinced that the law requires them to send a hard copy of anything they send by fax. What law is this, exactly?

More than one cynical observer has suggested that the fax machine represents a better return on investment for some law firms than the contributions of a young associate. We prefer to eschew mindless lawyer-baiting, and to believe that lawyers don’t charge for both the faxes and the hard copies. If they do, it is because we pay them for doing so. And it is up to us tell to tell them to stop bombarding us with paper.

Over the top

IT is easy to let frustration lead to cynicism, and never more easy than when talking about lawyers. But perhaps it is time to say something to help set the record straight, or at least a little straighter than it is at present.

One often hears complaints about so-called “over-lawyering.” This must be a subjective description, because there are no absolute standards to determine when “over-lawyering” starts. But the implication is that more has been done than was necessary, that cannons were used where slingshots may have sufficed, or that the body was killed six different ways after the heart had already stopped beating.

Why does it happen? Cynics say it is because lawyers want to charge more. But that can’t be the real and only reason, because many lawyers - and particularly those engaged in the mainstream of maritime arbitration - are focused and try to get to the bottom line as directly as possible. The overall process has become more competitive, more contentious and, of course, less civil. The role of the consigliare too often becomes that of the gladiator.

If you win, it’s expected. If you lose, the second-guessing begins, and some principals blame the lawyers, never mind that it might have been a marginal case when it started. Maybe counsel did get it wrong, or perhaps the arbitrators messed up. Who knows?

These are possible alibis. But lawyers can’t afford to take the risk. Attorneys get sued by disappointed principals, and so have to protect their interest and their reputation. With this type of pressure, lawyers really have no choice but to pursue all avenues, even if they risk allegations of over-lawyering, to ensure that no fault can be found with their prosecution of the case.

When arbitrators grumble that they have heard an argument over and over again, they should bear in mind that they can walk away from the case with a big fee, whereas counsel may have to face adversity much greater than deserved and bargained for.

Help required

WITH lawyers becoming arbitrators, ship agents becoming lawyers, chief engineers becoming journalists, and shipbrokers becoming despondent, shipping is an industry that encourages diversification. But we are still entitled to expect a proper level of knowledge, and a degree of expertise, in our dealings with industry professionals. And we need to satisfy ourselves that those hanging up new shingles on shipping’s beach know what they are talking about.

I am not entirely happy that this is the case, after receiving this fax recently. “We are a Vietnamese maritime company. Your member has introduced us about you. Now we want to set-up a shipbroker department, but before setting up we need some information, that the reason we write you for helping. Could you send me by email the details below. What is shipbroker? The development history of shipbroker. The currently situation of shipbroker and tradebroker companies. The development tendency of shipbroker & tradebroker companies on the world. The forecast of shipping and trading market in near future. We need these summary documents very quickly, if possible, please send us soon. We look forward your help very much.”

Even allowing for the language difficulty, this has to be a case of a little knowledge being a dangerous thing.

Mediation works

LONDON law firm Lawrence Graham says that, despite some cynicism among lawyers about the effectiveness of Alternative Dispute Resolution, mediation has a good foothold in the market and can be expected to grow.

In its latest shipping newsletter, Shipping Lawgram , Lawrence Graham's shipping team reports that it has recently seen a $500,000 dispute settle in one mediation session. The litigators across the firm are mediating successfully on a regular basis. The shipping team in particular is seeing the benefits of using mediation to reduce costs and conflict in disputes between international clients. Mediation offers clients the opportunity to have their say, which then makes settlement simpler. The growth in ADR is mirrored by a falling-off in the number of cases reaching the commercial courts and the appeal courts. Parties still need lawyers to support them in mediation, but there will be more short mediations and fewer long court cases in the future.

Lawrence Graham partner Imogen Rumbold warns, however, that parties to some disputes under the new Civil Procedure Rules actually spend more than they would have previously because, under Woolf, solicitors have to do much more of the work at an early stage, with the result that costs can be higher. She concludes, though, that the key to making ADR work is to believe in it. Only that way can clients believe in it too, and when they do, it works.

Send no money

IF I asked you to lend me a million dollars until tomorrow lunchtime, you would probably give me a very dusty answer. But the level of gullibility currently abroad in shipping suggests that this may not be the case.

It seems that the good old Nigerian letter fraud racket is currently enjoying a renaissance. This type of fraud used to be the exclusive speciality of Nigeria, but the TT club’s electronic website recently confirmed that it is now in vogue in a number of other West African countries.

As the TT Club explains, the prime objective of the letter is to secure an advance fee payment. The author usually claims to be a person who has managed by some good fortune to generate a substantial sum of money which he or she needs to smuggle to another country. In return for helping to facilitate this, the recipient of the letter is promised a percentage of the fund, usually between ten and thirty per cent. Further sums are then extorted until the victim finally realises what has happened.

The circulation of these letters is a serious worldwide problem. A number of countries have adopted multi-agency approaches to combat them. The letters, incidentally, are also used to obtain company and personal details so that the information may be used to commit other types of fraud.

However unbelievable the letters may seem, people are frequently deceived by them. According to the TT Club, five million such letters were sent worldwide in 1999. To add insult to injury, the stamps on the envelopes were forgeries. Increasingly, too, e-mail is being used as a means of transmission.

Out of every 100,000 recipients, about a thousand respond, and ten are defrauded. For the record, the largest known individual fraud of this type, amounting to $6m, is said to have occurred in the United States. The largest known company fraud occurred in Germany, involving $23m.

The only comparable disregard for the value of money that I can think of involves one of the central characters in the twenty-five-billion-dollar Wall Street battle for control of RJR Nabisco in the 1980s who, on his way out to lunch, would pause at the desk of his secretary and demand, “Give me an inch of fifties.”

Of course there is a simple way to avoid getting involved in these frauds. Just throw the letter in the bin.

Happy days

I WILL admit that a tear came to my eye recently when I read that somebody was going to sell off memorabilia from the old Lloyd’s underwriting room. And, in case you’re wondering, I mean the 1958 building, which used to transform itself into a tawdry imitation of an Elton John concert at 4.27 every afternoon as five hundred cigarette lighters clicked on simultaneously to signal the start of ‘fag on’ time.

I have to ask whether any investment in Lloyd’s memorabilia is going to be money well spent. I have a broker friend who has a seven-foot-high information board upstairs at home, mounted on a heavy wooden base, which used to reside in the main entrance of the old Lloyd’s building. The sign says, “This room is private & for the use of members, subscribers, associates & substitutes only". Conservatively, I would estimate that the thing weighs three tons. Yet, on the day that underwriting ceased in the old building, my friend carried it back to the office single-handed during a force 9 gale and then took it home on the train to the garden of England.

On long summer evenings, my friend pours himself a cheeky little chardonnay and, relaxing in front of the old information board, if he concentrates hard enough, he can visualise the 1958 building back in the days when underwriters occasionally wore smiles on their faces, and were known to pay claims within nine months. With a bit more effort he can also picture the chef in the restaurant at Lloyd’s dishing up the cornish pasties with a cheeky rejoinder of, “I'd rather keep you for a week than a fortnight,” usually followed by, “I like a man with a moustache." Who doesn’t?

The old sign was never terribly effective at keeping out unauthorised visitors. With the new building, of course, they got the architect to do the job for them.

Jobs for the buoys

THERE may be far fewer jobs in shipping than there used to be, but there are many more specialist maritime employment agencies offering their services. Leading the way is the excellent shippingjobs.com site operated by Spinnaker Consulting, which I unreservedly recommend to our readers. But, imitation being the sincerest form of flattery, there has been a rash of rather worrying new entrants to the market. Would you, for example, want to put your career in the hands of somebody called Captain Vladimir Moldovan, who has emailed me as follows:

“The Baltic Maritime Job Exchange is offering you to view samples of CV, which are prepared and placed on our pages.

“If you are an employer, please, place your orders with us …. We will send to you the CV of persons who wish to serve at you. Jobseekers who have their CV on our exchange will not require keeping a heap of documents, papers and copies at constant readiness.”

Capt Moldovan concludes, “The question is why persons from the category Other Maritime so poorly sign up. It is well known that good agents, brokers, managers, stevedores, surveyors etc were always on demand. Why then they will not register with our Exchange.”

That’s a hard one, captain.

Just desserts

MOST people maintain a healthy scepticism for awards of any sort. This is not surprising, since the collective recognition of merit must be very subjective. That is not to say that some awards are not deserved, however, or that they cannot be used to encourage excellence.

In shipping, the SAAC/Seahorse Transport Journalism Awards are now in their third year, and there will be those who will even now be rehearsing their acceptance speeches for the gala presentation in London this April. I wish all the hopefuls the very best of luck in the six categories of awards for journalists, and commend SACC/Seahorse on its initiative. I am a little worried, however, about the Publication of the Year category. What are we to make of the notation, "Winner: To be arranged"?

Proof negative

I AM indebted to the excellent BOW WAVE electronic newsletter produced weekly by Jonathan Ignarski, a good friend of long standing who gives a lie to the very idea that it is impossible to be a jack of all trades and master of none. (S...@WavyLine.Com)

In his latest issue, Jonathan passes on this intriguing news item from a recent edition of the Birmingham Sunday Mercury . “Bosses of a publishing firm are trying to work out why no-one noticed that one of their employees had been sitting dead at his desk for five days before anyone asked if he was feeling okay. George Turklebaum, 51, who had been employed as a proof-reader at a New York firm for thirty years, had a heart attack in the open-plan office he shared with 23 other workers. He quietly passed away on Monday, but nobody noticed until Saturday morning, when an office cleaner asked why he was still working during the weekend.

“His boss, Elliot Wachiaski, said, “George was always the first guy in each morning and the last to leave at night, so no-one found it unusual that he was still in the same position all that time and didn’t say anything. He was always absorbed in his work and kept much to himself.”

A post-mortem examination revealed that George had been dead for five days after suffering a coronary. Ironically, he was proof-reading manuscripts of medical textbooks when he died.

It is hard to imagine anything sadder than this.

Advances in air travel

SHIPPING is often urged to take a leaf out of aviation’s book when it comes to safety, and litigating disputes. But I’m not so sure, after reading a snippet from a legal publication of unknown provenance sent to me by a US arbitrator and headlined, “Air carriers can be sued for sexual advances of a fellow passenger.”

It seems that the Second Circuit Court of Appeals in New York was asked to decide whether the actions of a male passenger who managed to sneak his hand into the underpants of a female passenger sleeping next to him in a window seat in economy class was an ‘accident’ for which the victim could sue the airline.

First, I like the word ‘underpants’. It has more or less died out everywhere except in those countries - like the US - who insist on calling trousers ‘pants’. But it would be instructive to know if the woman in this case was wearing overpants as well.

Second, the appeal court noted that the female passenger was “cramped into a confined space beside two men she did not know, one of whom turned out to be a sexual predator. … It must have taken time for the predator to undo the victim’s clothing and to grope her. Yet, during the whole time, not a single flight attendant noticed her problem.”

Third. Am I the only person in the world to find this condemnation of the flight attendants astonishing?

Fourth. Is it possible, do you think, to simply “turn out to be” a sexual predator, in the same way that someone might “turn out” to be left-handed, or Australian?

Fifth, the appeal court held that this was “an accident waiting to happen, and the plaintiff had a right to sue the air carrier.”

Quelle surprise.

Photo call

IN our last issue we carried an article by Jude P Benny of Singapore-based Joseph Tan Jude Benny Anne Choo of Singapore comparing the 1957 and 1976 conventions on limitation of shipowners’ liability. Unfortunately, the photograph accompanying the article was not that of Jude Benny, but of one of his associates. We understand that Jude is even better-looking than the person in the photograph we published, if that is humanly possible.

Post hast

HAVE you noticed that end-of-year holidays are getting longer, and xmas cards more scarce? I am in favour, I must say. Meanwhile, the shipping group of a Paris law firm has sent us a seasons greeting card from Paris. It took just two days to get here, having been posted on January 31. An afterthought, or getting ahead of the game?