Out with the old, in with the new

One of the more boutique areas of my work in credit hire litigation has involved drafting submissions to arbitrators appointed under the MIB Untraced Drivers Agreement and occasionally pursuing an appeal to the Commercial Court on a point of law when an arbitral decision has been rendered flawed by a mistake.

It is with interest that I note that the new Untraced Drivers Agreement which comes into force on 1st March 2017 brings in some quite sweeping changes to the arbitral process.

Fans of the MIB will remember that the issue of reform to the Untraced Drivers Agreement has been bubbling away for a number of years, including a consultation. A copy of the Department of Transports response to the consultation can be found here: Department for Transport Responses to Untraced Drivers Agreement Consultation.

The response sets out the department’s collective thought processes on what it learnt through the consultation and why it has acted to negotiate significant changes to the Untraced Drivers Agreement.

A copy of the new Agreement can be found here:  2017 Untraced Drivers Agreement. The MIB have also helpfully put together a correlation table to enable easy comparison to be made between the old agreement and the new one: showing where retained sections have ended up and briefly explaining new sections of the agreement.

The Correlation Table can be found here: 2017 Untraced Drivers Agreement Correlation Table.

The relevant section dealing with appeals to an arbitrator can be found below.

19. (1) Not later than 21 days after notifying the claimant of the appointment of an arbitrator pursuant to clause 18, MIB shall send to the arbitrator (copying in the claimant) a letter asking for a determination of the appeal and specifying the issue which the arbitrator is asked to address.

(2) The letter referred to in paragraph (1) shall include a copy of —

(i) the notice of appeal together with a copy of all the evidence, observations and documentation submitted pursuant to clause 16,

(ii) MIB’s claim form,

(iii) MIB’s decision, determination or requirement (as appropriate), together with all statements, documents and other evidence which accompanied it, and

(iv) any observations MIB wishes to make.

(3) If the claimant has not received a copy of MIB’s letter to the arbitrator in accordance with paragraph (1) within the 21 day period specified in that paragraph or such letter does not include all the documentation and evidence as required by paragraph (2), the claimant may instruct the arbitrator and provide the same documentation and evidence as MIB was required to send in accordance with paragraphs (1) and (2) but without MIB’s observations.

(4) The arbitrator may, if it appears to him to be necessary or expedient for the purpose of resolving any issue, ask MIB to conduct a further investigation and to submit a written report of its findings together with any further evidence to him and, in such a case —

(a) MIB shall undertake the investigation and send copies of the report and evidence to the arbitrator and the claimant, and

(b) the claimant may, not later than 4 weeks after the date on which a copy of the report is received by him, submit written observations on it to the arbitrator and, if he does so, he shall send a copy of those observations to MIB at the same time.

(5) The arbitrator shall, having received all the items referred to in paragraphs (1) to (4) (as appropriate), send to the claimant and MIB a preliminary decision in writing setting out the decision he proposes to make and his reasons for doing so.

(6) Not later than 28 days after the date of sending of the preliminary decision letter (or such later date as the claimant and MIB may agree), the claimant and/or MIB may, by written notification given to the arbitrator and copied to the other —

(a) accept the preliminary decision, or

(b) submit written observations on the preliminary decision, or

(c) request an oral hearing.

(7) If the claimant or MIB fails to give any of the notifications in paragraph (6) within the period specified in that paragraph (including a failure to provide a copy of the notification to the other), he or it shall be treated as having accepted the decision.

(8) If the claimant submits new evidence with any written observations under paragraph (6)(b), MIB may, at its discretion and within the 28 day period mentioned in paragraph (6) (or such longer period as the arbitrator may allow), do any of the following —

(a) make an investigation into that evidence, and/or

(b) submit its own written observations on that evidence, and/or

(c) if it has not already done so, request an oral hearing.

(9) Except where an oral hearing has been requested by MIB pursuant to paragraph (8)(c), the arbitrator shall (in the exercise of his powers under section 34 of the Arbitration Act 1996 where the arbitration is being conducted in England and Wales or under Schedule 1 to the Arbitration (Scotland) Act 2010 where the arbitration is being conducted in Scotland) determine whether and, if so, how and to what extent the new evidence referred to in paragraph (8) shall be admitted and tested.

(10) If both the claimant and MIB accept the preliminary decision (or are to be treated as accepting it pursuant to paragraph (7)), that decision shall be treated as the arbitrator’s final decision for the purposes of clause 20.

(11) If MIB or the claimant submits written observations on the preliminary decision pursuant to paragraph (6)(b), the arbitrator must take those observations into account before making a final decision and shall send his final decision in writing to MIB and the claimant.

(12) If either the claimant or MIB requests an oral hearing pursuant to paragraph (6)(c), the arbitrator shall not provide a final decision pursuant to paragraph (10) and shall determine the appeal by way of an oral hearing and, in such a case —

(a) the hearing shall be held in private;

(b) the hearing shall take place at a location, to be arranged by MIB at its cost, which, in the opinion of the arbitrator, is most convenient for both MIB and the claimant (after consultation with each of them) as well as for himself;

(c) both MIB and the claimant may be represented by a lawyer or other person of their choosing;

(d) a party to the hearing shall, subject to sub-paragraph (e), be entitled to address the arbitrator, call witnesses and put questions to any person called as a witness; and

(e) in advance of the hearing, the arbitrator may give such directions as he deems appropriate regarding the evidence to be adduced at the hearing, the witnesses to be called, the venue for the hearing or any other relevant matter;

(f) the arbitrator shall provide his decision in writing together with his reasons.

(13) When issuing his final decision pursuant to paragraph (10) or (12)(f), the arbitrator may include his decision in relation to the costs of the arbitration proceedings pursuant to clause 22 or he may require details as to the costs claimed before he makes his decision on costs.

(14) This clause does not apply when an arbitrator is appointed pursuant to clause 14(1) (save where paragraph (12)(b) of that clause applies).

What is interesting to note is the scope for an oral hearing after a preliminary decision has been given: in effect it makes the arbitration process far closer in procedural terms to a trial in the civil courts than before.

It might also have the effect of reducing the number of appeals to the Commercial Court under sections 67 and 68 of the Arbitration Act 1996: the arbitrator will have an increased opportunity to understand the case and pose pertinent questions at an earlier stage, which should reduce the scope for errors of law to be made.

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