arbitration
{tax&legal}
Resolving
International
Disputes
Businesses seek out specialist legal
advisors to tackle growing problems
T
he number of businesses
hiring in-house specialist lawyers is set to rise
according to a new PwC
survey, after a third reported an increase in the
number of international disputes.
The survey, Corporate Choices in International Arbitration, showed that 35% of the
polled counsels had reported a rise in the
number of international disputes. When
asked what method they would choose to
resolve their disputes, twice as many opted
for international arbitration than other
forms such as litigation.
Currently companies tend to seek this
specialist expertise from external law
firms but under the current constraints
of the economic climate and the rising
cost of proceedings, many more are
likely to start recruiting in-house, the report says. Whilst 90% of respondents had
a dedicated legal department, the survey
revealed that only half (49%) had a dedicated in-house disputes team.
In partnership with Queen Mary, University of London, researchers analysed
International Arbitration (IA) trends in
more than 100 multinational businesses,
focusing on the financial services, energy
and construction sectors.
Overall 73% said that IA was well suited
to resolving transnational disputes, with
preferences strongest in the construction
and energy sectors. When asked to rank
various dispute methods in order of preference, 68% of construction respondents
said arbitration was their preferred method
compared to 56% for energy, whilst in
financial services, 82% ranked court litiga-
Many businesses
opt for arbitration
for international
disputes due to its
speedier process and
private nature
tion as their number one method.
Despite this, over two thirds (69%)
of in-house counsel in financial services
companies felt that IA was becoming
more suited to resolving their disputes.
Gerry Lagerberg, PwC’s head of international arbitration, said: “One of the
key findings of the research is this trend in
specialist counsel being brought in-house.
In part, this is down to a cost-control
measure but it will also serve as a real vote
of confidence in IA as these firms recognise
the value in having arbitration specialists
embedded more within their multinational
businesses”.
Of those that said arbitration was not
their preferred method for settling disputes, 22% said this was down to it being
less cost effective than other methods –
such as litigation, according to the report.
Many businesses opt for arbitration for
international disputes due to its speedier
process and private nature. There is usually no appeal process and the final decision is binding, unlike litigation.
To download a copy of the report:
www.pwc.com/arbitrationstudy
BOOK
REVIEW
The Lawyer Bubble:
A Profession In Crisis
Steven J. Harper (Basic Books, 2013)
A
RRP: £17.99 (£17.09 from amazon.co.uk)
lthough this book is about
the legal profession in
the US, many of the key
points raised doubtless
apply to other countries
too. As someone who has been listed
in numerous compilations of the best
lawyers in America, Harper is well
placed to know what is happening
to his former profession and he has
come up with a devastating indictment
of the greed, shortsightedness and
dishonesty that, he says, now permeate
it. In addition, there is a growing
oversupply of new lawyers, widespread
career dissatisfaction and spectacular
implosions of pre-eminent law firms.
Yet eager hordes of bright young
people continue to seek jobs with high
rates of depression, life-consuming
hours, and little assurance of financial
stability. The global financial crisis
has only worsened these trends but,
according to the author, correction
is possible. Being honest about
the legal job market, revisiting the
financial incentives currently driving
bad behaviour, eliminating the billable
hour model and more can take the
profession to a better place, he
argues as part of his proposals for “a
meaningful course correction”.
the international investment, finance & professional services magazine of cyprus
Gold 77