Accountants in ADR


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Grant Jones - what roles exist for accountants in ADR. "Where have all the accountants gone" in arbitration appointments? What of accountant advocates in arbitration: do they exist, should they exist? Should mediators be experts in area of dispute and if so what of accountant mediators?

The HMRC have introduced an ADR trail for SMEs & although the mediators are HMRC personnel, accountants have a role to play, especially if the scheme develops.

Appointing Grant Jones as arbitrator: FAQs.

Q. Can I approach you directly to appoint you as an arbitrator?

A. Generally, 'yes you can'. However, this is not necessarily the desired route. Generally I prefer a joint approach from both prospective arbitrants. You should also remember that you (& indeed both potential arbitrants) may not have the right to appoint. The right to appoint may vest solely in the arbitral institute; it is probable however, that such institutes would pay high regard to arbitrant (more especially joint arbitrant) wishes.

Q. What do you mean by 'a joint approach' & 'why is a joint approach preferable'?

A. A joint approach can be way of an email introducing the parties & the situation, sent by one party; this email can usually be sent by a potential arbitrant or their advisers. However this email should be 'cc'd to the other side'. If cc'd it constitutes a joint approach, even if led by one party.

A joint approach is preferable because of transparency. An arbitrator is a quasi-judicial officer & the rules of natural justice apply: the arbitrator should, save in exceptional circumstances, avoid communications with just one arbitrator. Admittedly at the point of initial discussions, I have not been appointed, so I am not a quasi-judicial officer; nevertheless I would like to adhere to the principal throughout the whole process.

A joint approach also gets things done. If one side in good faith rings around potential arbitrators, spending some time discussing the situation & concludes 'yes, I found the perfect arbitrator to recommend to the other side', unfortunately human nature being human nature, the other side will show some scepticism. The other side, if not involved in the process, does not necessarily assume good faith. I have spent a lot of time explaining the arbitral process to one side (usually a trainee lawyer asked to ring around) & reaching an accord as to the way forward, only to have the other side refuse to consider my appointment. Why? Well, because I now appear to be too close to the other side. I have found that immediate transparency saves time & is a great deal less hassle.

Q. Do you charge a fixed fee?

A. Very rarely, as I find lawyers make it impossible. Lawyers want to replicate the litigation process inside arbitration. Consequently it is impossible for me know how much time the process will take.

A fixed fee is possible provided the arbitrants (& their lawyers) agree to the certain arbitration requirements, namely -

(1). No arbitrant has any jurisdictional issues with my appointment & nor with the standard appointment documentation. In short, all sides fully buy-into the process.

(2). The arbitration is a 'documents-only arbitration' consisting of a single agreed paginated bundle; together with an easily considered agreed question for the arbitrator to answer. As this will be the only submission, arbitrants & advisers will have to ensure that their submission is easily intelligible, & fully cross-referenced. Too often I find arbitrants & their advisers had 'expected the arbitrator to ask questions', that is if the arbitrator had not fully understood the submissions he would have said so. This is not usually the case in such fixed fee arbitrations. The arbitrator works on what he is given. As to the question upon which the arbitrator is to award, it is better if the question is in a binary format, whereby the answer can be (say) 'yes or no'. Further the question should ideally fully dispose of the issue (or of a particular issue) between the arbitrants. Why otherwise have an agreed fee arbitration if other matters are not subject to the agreed fee?

(3). Ideally, but not always, the arbitrants agree to an unreasoned award. Writing the award takes time. Often it is the most time consuming part of the arbitral process. Further time-wise, it is the least ascertainable. I can ascertain more easily how long a paper review will take & can fix fees accordingly. It is harder to ascertain how long the reasoning will take. Finally, reasoning may allow a dissatisfied arbitrant to take matters further & involve extra costs. This is especially the case if I believe the submission was not immediately understandable. Arbitrants & their advisers take umbrage if an arbitrator's reasoning involves an implied criticism of the quality of a submission, rather than of the quality of their case.

(4). There are no directions hearings during the whole arbitral process. I am in sole control of the arbitral process & 'deadlines' are not burdensome.

The actual process of agreeing a fixed fee can sometimes become a negotiation process, which I consider inimical to the quasi-judicial nature of the arbitrators office.

On the whole I prefer not to have a fixed fee, but will accede if arbitrants are happy with all or some of the above. Of course none of the above apply if the fees are fixed by the arbitral institution. My comments refer to ad hoc arbitration.

Q. Why do you the term 'arbitrant'?

A. An arbitrant is like a litigant. A litigant is involved in litigation & an arbitrant in arbitration. I prefer to use the term 'arbitrant' than the more usual term 'party', because it emphasises the arbitral process. By emphasising 'it's arbitration, not litigation', I wish to encourage 'the parties' not to slavishly follow litigation processes & thereby increase costs.

Q. You've mentioned 'documents-only arbitrations'; what are they & do you act, outside of fixed fee arbitrations, as a documents-only arbitrator?

A. A documents-only arbitration does not involve the classical litigation hearing. The process is documents driven. Thus there is no cross-examination. The arbitrator merely considers documents.

I much prefer documents-only arbitrations. Cost- effective & logistically easy, I recommend them.

Q. If not a fixed fee arbitration, how do you charge?

A. Like most arbitrators & indeed professionals I charge on a hourly basis. My hourly rate is not low: this is because I am both a lawyer & accountant, & my dual qualification adds value to the arbitral process. My charge out rate is \A3350/hr, but I am happy to consider reducing that rate if circumstances allow, such as the amounts involved are small or it is a interesting case, to which my skills are especially suited.

Q. You have a varied portfolio career, how can we ascertain whether a conflict of interest exists?

A. I suggest you look to my employments & positions as a preliminary measure & indeed consider the whole of this website. The purpose of the website is to tell potential arbitrants about me. I am not a partner (any longer) of any of the professional partnerships with which I have been associated, neither am I an employee of such professional partnerships, rather I am a consultant. Thus if these partnerships have a conflict, that conflict does not, of itself, conflict me. This is a practical view, for as a consultant I cannot interrogate the files of those firms & so could not, in any event, be able to ascertain any conflict. All I can do is to disclose through this website my relationships. Of course I can answer direct questions pertaining to me, such as 'do you know so & so', etc?

Q. How do we go about appointing you?

A. First, consider (ideally all parties jointly considering) whether I am your ideal choice. This can be done by reviewing this website. Second, contact me via email to start the process rolling, again ideally jointly. In largish cases an initial meeting can be organised. Third, sign the the appropriate appointment documentation.

Q. Should I employ lawyers to represent me?

A. Of course the general answer is 'yes'. However, I particularly (in many of the sorts of arbitration with which I am involved) encourage party or accountant representation. If the dispute is about a profit calculation & the arbitration is documents-only (with no opportunity for cross-examination) then I believe an accountant (if they feel able) can present the case. Certainly in such a case even if it is not documents-only) it can be jointly presented. The issue is, 'does the non-lawyer potential advocate feel confidant'? It's a personal choice really.

Q. We have finance dispute & like the look of appointing you as the arbitrator. Should we employ our own accountant expert witness?

A. You wish to appoint me because I am a dual qualified lawyer, accountant, arbitrator. So I would hope that I can reduce accountant expert witness costs. Experts witnesses can either be appointed by the disputants (in which case there will be two in a two party dispute) or one (if appointed by the tribunal, in this case the arbitrator). Sole experts are often welcomed in that they reduce costs. Given I am an accountant, then unless it's an obscure point in dispute, however it appears a little daft for me to appoint my own accountant expert. As to party-appointed experts, I charge an appropriate fee consideration of my dual qualification: this is because I believe I can reduce costs through my dual qualifications.

I hope these FAQs have been helpful & I look forward to working with you.