Corporate Counsel Starting to 'Drive the Bus' on the Greening of Arbitration and Procedural Efficiency: “CGA Model Clause for Company Outside Counsel Engagement”

Corporate counsel are starting to 'drive the bus' on the greening of arbitration and procedural efficiency with their recently released Campaign for Greener Arbitrations (CGA) “Model Clause for Company Outside Counsel Engagement”.

The CGA’s Corporate Task Force has made available a “CGA Model Clause for Company Outside Counsel Engagement” that draws on principles expressed by the CGA and “is for use by company legal departments to assist in reducing carbon emissions and other environmental impact associated with managing and resolving disputes.”  

The group's members are listed at Task Forces (greenerarbitrations.com) [scroll down to “Corporate Task Force”] and until recently also included Ramona Schardt of Siemens Energy, who is now the new Secretary General of the German Institute of Arbitration (DIS).  

I asked fellow OGEMIDer Michael Mcilwrath, who chairs the CGA Corporate Task Force, to comment.

Mike said that the group’s members decided to focus on developing tools to help in-house counsel drive real change, and that more is in the pipeline to assist them.

He continued: “The Model Clause not only tracks some of the key principles of the CGA, it also incorporates issues of procedural efficiency by encouraging discussion on whether certain procedural steps can be streamlined or are even necessary. In this sense, the model language is consistent with the trend of in-house counsel being actively engaged in arbitrations and active collaborators with their outside counsel.”

The Model Clause can be incorporated in part or in its entirety in a company’s guidelines or policies relating to external counsel, included in counsel engagement letters, or adapted as appropriate.

The Model Clause focuses on the “Reduction of Environmental Impact and Waste”. The Model Clause states that the company [has adopted/adhered to/agrees with] the principles expressed in the Green Pledge and the Green Protocol for Law Firms, available at the Campaign for Greener Arbitrations’ website.

It goes on to provide that “Outside counsel are to make efforts, consistent with company’s objectives, to minimize the impact of the resolution of disputes on the environment.”

The Model Clause covers and provides, “by way of example”, the following:

Travel

• Consider and question the need to fly or the number of people who will fly, and consider instead the use of virtual meeting and hearing technology, including for document review, witness interviews, client meetings, and hearing participation.

• Make reasonable efforts to offset the carbon emissions of any flights taken on [company’s name] matters.

• Where available and appropriate, consider the use of train travel as a lower-carbon emitting alternative to flying.

Documents 

• Whenever reasonably possible, conduct correspondence through electronic means unless hard copy documents are expressly required under the circumstances.

Hearings 

• Consider whether certain issues genuinely require a hearing of any type (virtual or physical presence) to advance [company’s name]’s interests in the dispute or whether one or more issues may be decided on the basis of documents and written submissions only.

• Where a hearing is considered necessary or advantageous for [company’s name]’s interests, consider whether it genuinely requires the physical, in-person attendance of all participants, or whether some or all of the participants, including witnesses and experts, may participate through virtual hearing technology rather than by traveling to a hearing location.

• Whenever possible, discourage the use of hard copies of documents in arbitrations and instead encourage the use of electronic documents.

• Where a hearing is considered necessary or advantageous for [company’s name]’s interests, consider whether it genuinely requires the physical, in-person attendance of all participants, or whether some or all of the participants, including witnesses and experts, may participate through virtual hearing technology rather than by traveling to a hearing location.

• Whenever possible, discourage the use of hard copies of documents in arbitrations and instead encourage the use of electronic documents.

The Model Clause includes a disclaimer that the Framework and the Green Protocols are not binding and are not intended to displace applicable rules or derogate from the arbitration agreement unless and to the extent the parties so agree (either in the arbitration agreement or subsequently) or the tribunal so orders. Also, it states that the Framework and the Green Protocols do not establish liability or a liability standard for legal or regulatory purposes.

Plans for dissemination of the Model Clause for Company Outside Counsel Engagement are in development and “more will follow soon.”

The Model Clause can be found on the CGA website at https://www.greenerarbitrations.com/model-clause, where also can be found the CGA Pledge, the Protocols for the various participants in an arbitration, and the Model Procedural Order (in seven languages) Model Green Procedural Order (greenerarbitrations.com).

This article is shared by Barry Leon, Arbitrator and Member of CGA North America. It first appeared on the OGEMID and Young OGEMID listservs.