arbitration
How is it ethical for clients to instruct their lawyer to deliberately lose their case?
<p>I transcribe <a href="https://essexcourt.com/barrister/toby-landau-qc/" rel="nofollow noreferrer">Toby Landau BA BCL (First Class Honours) (Merton College, Oxford)</a> QC's answer at <a href="https://youtu.be/sj-mVRysujA?t=5055" rel="nofollow noreferrer">84:16</a>.</p>

<blockquote>
  <p>My
  funniest case probably was my first ever international arbitration, which is a
  84:23
  case that, Neil [Kaplan CBE QC SBS], you know about a lot. And that was a case called <em>Green Mining</em> and that was a case way back, where I think, Neil, you would have been an expert in that case, I think. Yeah it was an 
  international arbitration, it was seated in Washington, it was under ICC rules, and I acted with <a href="http://www.arbchambers.com/arbitrators/lucy-reed?lang=en" rel="nofollow noreferrer">Lucy Reed</a> and Martin Hunter. <strong>And the instructions we were given were to lose the case. And we had to lose it on jurisdiction because it
  was all to do with an <a href="https://en.wikipedia.org/wiki/Overseas_Private_Investment_Corporation" rel="nofollow noreferrer">OPIC</a> policy and 
  basically the interest was to exhaust remedies. So they wanted to lose an ICC
  arbitration in order to then go and pick up on a triple A arbitration later. So
  that was our instruction : lose the case.</strong>  The chairman of the tribunal was
  somebody called John Evita [Note by Greek Area 51 Proposal: I can't deduce his surname's spelling.], and he sat with [I can't deduce how to spell this person's name.] who was then 85:20 general counsel of the World Bank, and a
  at the time a humorless very strict 
  stern Attorney General from Trinidad.</p>
</blockquote>

<ol>
<li><p>It feels outlandish and uncanny to instruct a barrister to deliberately lose the case. Isn't this unethical? Wouldn't an arbiter find such an instruction sly or deceitful? </p></li>
<li><p>I'm not an arbiter. What's "a triple A arbitration"? </p></li>
<li><p>Please ELI5 in layman's terms  the strategy here  "to exhaust remedies"? What's "a triple A arbitration"? </p></li>
</ol>

<h2>Losing on jurisdiction</h2>

<p>This is a key point and worth understanding before anything else.</p>

<p>The barrister doesn't actually mean "lose". The first thing an arbitrator must do is decide if they have jurisdiction to hear the arbitration. If they don't have jurisdiction the arbitration is over before it really begins and ends without a determination. If they do have jurisdiction then they will proceed to decide the arbitration "on the merits" - this results in a binding determination.</p>

<p>"Losing" on jurisdiction means that the dispute is unresolved and you move on to the next rung in the dispute resolution ladder. "Losing" on the merits means you're screwed and you pull out your cheque book.</p>

<p>Normally, the person who initiates the arbitration wants the arbitrator to have jurisdiction and its the other party who is trying to convince them that they don't. Or not - more often then not both parties are happy to have their dispute resolved by arbitration at this point. In this case, the person who initiates the arbitration <em>wants</em> it to fall over so they can do something else.</p>

<h2>Ethics</h2>

<p>A barrister has three ethical duties: one to the court (or, in arbitration, to the arbitrator(s)), one to their client and one to their client's opponent. Using the Australian Bar Association <a href="http://chrome-extension://ohfgljdgelakfkefopgklcohadegdpjf/https://nswbar.asn.au/circulars/2010/feb/rules.pdf" rel="nofollow noreferrer">Barristers' Conduct Rules</a> as a guide (since all will be similar), the duties are:</p>

<ol>
<li><p><strong>To the tribunal</strong>: to act with independence in the administration of justice and to not knowingly mislead the court. There is no suggestion in the court that losing on jurisdictional ground thwarts justice nor that there is any intention to deceive the arbitrator(s). No ethical problems here.</p></li>
<li><p><strong>To their client</strong>: "must promote and fearlessly and by all proper and lawful means the lay client's best interest to the best of the barrister's skill and diligence ..." but "must not act as the mere mouthpiece ... must exercise the judgements called for by the case independently". The client believes that it is in their best interests to lose this arbitration (I'll deal with why this might be so latter). If the barrister's independent judgement agrees with this assessment then there is no ethical problem here.</p></li>
<li><p><strong>To the opponent</strong>: "must not knowingly make a false statement to the opponent". Again, no problems here.</p></li>
</ol>

<p>Ethically, the barrister is on solid ground.</p>

<p><strong>Tripple A arbitration</strong></p>

<p>"Tripple A arbitration" refers to an arbitration conducted under the relevant <a href="https://www.adr.org/Rules" rel="nofollow noreferrer">rules</a> of the American Arbitration Association. Remember the strategy here is to lose jurisdictionally an arbitration under the International Chamber of Commerce <a href="https://iccwbo.org/dispute-resolution-services/arbitration/rules-of-arbitration/" rel="nofollow noreferrer">rules</a>.</p>

<h2><a href="https://en.wikipedia.org/wiki/Exhaustion_of_remedies" rel="nofollow noreferrer">Exhaustion of Remedies</a></h2>

<p>Is a doctrine that prevents a court or tribunal from considering a case unless and until all remedies available in another forum have been exhausted. For example, where I live in <a href="/questions/tagged/new-south-wales" class="post-tag" title="show questions tagged &#39;new-south-wales&#39;" rel="tag">new-south-wales</a> if you are unhappy with a government decision, you have to exhaust all administrative remedies before you can go to court. This usually means you have to follow the complaints/appeals process of the relevant government department, only when that is exhausted can you seek a hearing in the <a href="https://www.ncat.nsw.gov.au/" rel="nofollow noreferrer">NSW Civil and Administrative Tribunal</a> (which is not a court even though it operates like one - legally it is a branch of the executive, not the judiciary), failing there, you may be required to appeal to the discretion of the relevant Minister and only then can you go to court.</p>

<p>In this particular circumstance, the ICC arbitration was something that had to be done before an AAA arbitration could be started. This is possibly a contractual obligation or, more likely, the client was going to take <em>someone else</em> to the AAA Arbitration rather than the other party in ICC Arbitration, possibly the OPIC itself. This might be advantageous if, for example, you foresee problems collecting if you won the ICC Arbitration such as your opponent is a recalcitrant foreign government.</p>

<h2>Why?</h2>

<p>There are 2 possible outcomes of the ICC arbitration:</p>

<ol>
<li>The arbitrator(s) or a court decides that they <strong>do not</strong> have jurisdiction to conduct the arbitration. This leaves the dispute unresolved and, in this case, allows the forum to move on to the AAA arbitration.</li>
<li>The arbitrator(s) or a court decides that they <strong>do</strong> have jurisdiction and the arbitration proceeds to its conclusion and someone wins and someone loses. Unless the arbitrator(s) have royally screwed up, this will be a final and binding determination - no appeals, the loser pays up.</li>
</ol>

<p>The client wants No 1 and not No 2.</p>

<p>Some reasons why the might include:</p>

<ul>
<li>Different opponents as suggested above,</li>
<li>They think their chances of winning on the merits are better under AAA rules than ICC rules,</li>
<li>There may be higher limits on awards under AA rules than ICC rules.</li>
</ul>
