Economic expertise in arbitral proceedings

One of the most significant evolution of competition law in past decades has been the growing role of economists. There is hardly an antitrust authority investigation now that does not involve economic experts. These experts will typically opine on issues, such as market definition, dominance, the pro- or anti-competitive effects of an agreement or unilateral conduct, etc.

In my experience, the presence of economists in arbitral proceedings involving competition law issues was relatively rare in the past. Ten or fifteen years ago, these issues were dealt with by legal experts, typically competition law professors. Their analysis was often formalistic in nature and I found it frustrating. Economics did not play a major role. Black letter law prevailed.

Things are different now. In the last four or five cases in which I have been involved as a competition law expert, the parties also retained economists, often at my suggestion. This is a positive development. There is no reason why the type of effects-based analysis that is pursued by competition authorities should be ignored from arbitral proceedings. And arbitral proceedings are an ideal forum to hear economic evidence, generally more so that competition litigation proceedings before national courts.

The role of economists in arbitral proceedings involving competition law issues is not to draft briefs full of equations (unless placed in annexes), but to assist the arbitrators (whose competition law expertise is limited) by clarifying the economic concepts that are at play in the matter in question, as well as the economic theories and tools that can be used to assess the compatibility of the agreement/conduct in question with competition law.

My experience working with economists in arbitral proceedings, but also in national litigation or agency investigations, has always been very positive. Key, however, is to select the right economist expert (someone who can talk to lawyers) and defining the scope of his or her mission clearly.

 

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