ICC report released: witness evidence in international commercial arbitration

The International Chamber of Commerce has recently published its report entitled ‘The Accuracy of Fact Witness Memory in International Arbitration’ (Report). The mandate of the committee behind the Report, inspired by observations of Toby Landau QC,[1] was “to look at the science (with input from eminent psychologists specialising in human memory), at arbitral practice (with input from Task Force members specialising in international arbitration around the globe) and to consider whether modifications could be made to current practices, or alternative approaches could be adopted …”.

This paper provides a summary of the key concepts represented in the Report.

Witness memory in international arbitration

The findings in the Report are fascinating and important. A significant part of the preparatory work for international arbitration proceedings is the preparation of witness evidence in the form of outlines, statements or affidavits.

Whilst practitioners take steps to prevent the contamination of evidence (through communications between witnesses) or the recreation of events in the witness’ mind (through producing documents which might cause a witness to adopt its contents as their ‘recollection’), the practices they use are based on experience and are unlikely to have regard to the science or psychology of witness memory. The tribunal assesses this evidence to determine both the facts applicable to the dispute before it and the credibility of the witness.  It is rare for an arbitrator to ask whether the evidence represents the true memory of the witness.  

Civil v common law practices

It should be noted from the outset that the role of ‘fact witness evidence’ differs in arbitration proceedings which are conducted in a truly civil law manner and those which are conducted, albeit rather unfortunately, in a manner which replicates common law litigation.  

The IBA Rules on the Taking of Evidence in International Arbitration (IBA Rules) are designed, at least in part, to “reflect procedures in use in many different legal systems”, and have assisted in overcoming differences between the civil law and common law procedures (particularly in relation to disclosure of documents, but also in relation to the presentation of fact witnesses).  

The Report recognises the differences between civil and common law jurisdictions, noting that it is from common law jurisdictions that ‘the traditions of narrative witness statements and the cross-examination of witnesses have emerged’. It also acknowledges the use of the IBA Rules.

Scope of the Report

The Report considers existing research into witness memory, the significance of the accuracy of witness memory in arbitral proceedings and suggests practical measures to improve accuracy. Appendix 1 to the Report sets out observations on some of the scientific literature on memory and witness evidence. Appendix 2 reports on ‘An Experimental Test of the Reliability of Witness Memory in a Business Context’.  

Significance of witness evidence in international arbitration

The Report observes, amongst other preliminary matters, the high cost of the preparation of witness statements in arbitration proceedings and observes that the “presentation of oral evidence is one of the main functions of a ‘final’ hearing, often amounting to several days”.  

In common law practices, unless check clock procedures are adopted, the presentation of oral evidence can in fact amount to several weeks (or longer). The Report notes that “[t]he decision of the tribunal on the merits of the case will often turn, in varying degrees, on the witness whose evidence has been presented” and that “[o]ne of the important judgments that the tribunal members will often have to make is to determine the credibility of a witness and the weight to be given to a witness’ evidence”.

Witness memory is imperfect

A key finding of the Report is that:

“Scientific studies and human experience show that witness memory is imperfect and is subject to possibly distorting influences as soon as it is formed.  Memory is malleable – it is not akin to a fixed image that is ‘retrieved’ when needed, but rather it is a dynamic process that can be affected by subsequent events.”

Importantly, the authors of the Report found that studies indicate that the “same issues of witness memory arise in international arbitration” as they do in other contexts. Most of the existing scientific research with respect to witness memory centres on criminal cases, where the success of the case usually rests on the recollection of a short, quick and often traumatic sequence of events.  

The Report concluded that in international arbitration, there is no single ‘best practice’.

Factors impacting witness memory and evidence

The Report identifies both ‘actors’ and ‘factors’ which can affect witness memory, noting:

1. Memory can be affected by multiple ‘actors’, including “in-house counsel, outside counsel, peers and supervisors … so that each of the participants in the arbitral process can help to reduce the distortion effects”;
   
   
2. Evidence can be impacted by “cultural perceptions, manner of presentation, language and cognitive biases by arbitrators, counsel and witnesses”;
   
   
3. Events described by Professor Maryanne Garry (School of Psychology at the University of Waikato in New Zealand) and her colleague, Eryn Newman,[2] as ‘post event information’ can have a misleading effect on memory (with susceptibility increasing as memory becomes weaker); and
   
   
4. Exposure to ‘misinformation’ can impact memory, including misinformation in questions put to witnesses.

In relation to (c), the Report notes that the ”way in which witness evidence is currently prepared and presented in arbitration proceedings includes multiple opportunities for a witness to be exposed to [post event information], including misleading [post event information]”.

In relation to (d), according to the studies relied on in the Report, misinformation can “have the effect of overwriting an existing factual memory in addition to supplementing the memory with additional (inaccurate) details”.  

Misinformation can be transmitted in numerous ways, including from another witness, in discussions with legal counsel, or even in the process of retelling a story numerous times which can have the impact of changing a witness’ perspective of the event or situation.

These findings emphasise the importance of ‘quarantining’ potential fact witnesses in an arbitration proceeding in a bid to limit their interactions with various individuals. Even the initial conference with multiple representatives of a corporate claimant or respondent (for example in-house counsel and the chief executive officer), has the potential to mislead each of those persons as to their memory of key events.

Interestingly, and contrary to the writer’s experience, the Report suggests that “it is not unusual for witnesses to be interviewed or debriefed together”. Indeed, it is not unusual for a witness in a common law jurisdiction to be asked whether they have discussed their evidence with another witness in the same litigation or arbitration.  The issues raised in the Report may lead to similar questions being asked in international arbitration as a matter of course, not only by counsel with a common law background.  The answer is for arbitration practitioners to be scrupulous in how they bring potential fact witnesses together before the arbitration commences and, in particular, the people and events to which those potential witnesses are exposed during fact evidence preparation.

It is recognised, of course, that it is not always simple to identify key witnesses when initially taking instructions, but practitioners must be alert to the circumstances in each case so that steps are implemented to ‘protect’ witness memory as early in the proceeding as possible (and certainly in some cases before arbitration is commenced).  Similarly, practitioners must keep in mind that an imperfect recollection of events does not necessarily render a witness’ evidence as less valuable or probative.

The Report discusses the work of Dr Cartwright-Finch and Dr Wade[3] and their studies into the relevance of cultural diversity. As the Report notes:

“The key takeaway for international arbitration was that culture did not keep witnesses from incorporating details of other witnesses’ memory reports into their own memory reports, even if that information contradicted what they had observed. Regardless of whether that incorporation was the result of a memory distortion of witnesses’ trusting reliance in their co-witness, the study is relevant to international arbitration.”

Measures to preserve witness ‘memory’

The Report provides guidance for in-house counsel and external counsel to “mitigate or eliminate the factors that can distort the memory of witnesses”.

Recommended steps include:

• Encouraging contemporaneous record keeping;
  
  
• Holding separate meetings with potential fact witnesses (from an early stage);
  
  
• Avoiding presenting a ‘party line’ to fact witnesses;
  
  
• Discouraging communication amongst witnesses;
  
  
• Considering early witness interviews (outside of any procedural timetable) to capture the evidence at the earliest possible opportunity;
  
  
• Keeping accurate records of interviews, including recording where appropriate (but not as a ‘general practice’);
  
  
• Asking witnesses about the source of their memory (with the Report noting that ‘witnesses have more accurate and less distorted memory recounts when encouraged to identify the source of their knowledge’);
  
  
• Asking open-ended, unbiased and non-leading questions to potential witnesses, using ‘neutral language’;
  
  
• Limit documents shown to a witness to those necessary (so as to avoid contaminating memory); and
  
  
• Being aware of the potential for memory to be impacted, including by misinformation (including post event information).

The Report also provides recommendations for tribunals which include the giving of clear instructions to witnesses before they give evidence and potentially requiring each witness statement to set out information as to how that statement was prepared and whether there was collaboration of any kind amongst witnesses. The recommendations may not be suitable to every case and should not be undertaken routinely.  

The Report’s conclusions

The Report concludes that because witness evidence can be used in different ways (for example, to prove a document, explain a document or provide details of an historical event), even where it is known that memory can be impacted, “it does not necessarily follow that current practices should be changed in order to minimise the risk of memory distortions”. This also means that the recommended steps need to be evaluated and used on a case by case basis depending on the circumstances of each case.

However, the Report is very clear on its observations on the role of the tribunal:

“The Task Force is firmly of the view that the preparation of witnesses and witness evidence, including the practices identified in Section V, should not become subject to routine inquiry by tribunals or now become yet another topic for requests for documents. Such inquiries should be reserved for exceptional situations, in which witness preparation is an important issue going to the essence of the particular testimony.

“The importance of delving into witness preparation and witness statement preparation must be measured by the importance of the testimony itself in the context of the dispute and the importance of determining whether a material or important part of the testimony is or is not affected by memory distortion. In any event, any such inquiries must take into account issues of privilege and attorney work product.”

What does this mean for commercial parties?

The Report brings together the science and practice of witness evidence and provides practical guidance to parties, counsel and the tribunal to “reduce the imperfections [of witness memory] to the extent reasonably possible in order that the decision rendered [by the tribunal] can be just, based on a reasonably close approximation of what in fact happened”. It rejects the suggestion that witness testimony be abandoned in favour of documentary evidence.  

The clear takeaway for parties (and their in-house and external counsel) is awareness – awareness that the process of taking evidence from a witness can significantly impact the quality of the evidence and the accuracy of the memories of the witness.

This risk needs to be front of mind at all times and particularly where there is the first hint of disagreement or tension between business parties which might lead to a dispute.  

In-house counsel can play a big part in preserving what will essentially become ‘corporate memory’ by insisting on timely and accurate note taking and record keeping and ensuring that those notes and records form part of the companies’ files (not private diaries of employees).  

External counsel must ensure that all potential witnesses in an arbitration understand from the earliest stage that their evidence must be their own evidence, unaffected by the recollection of others and it is usual (and reassuring) for there to be differences in what each person remembers.