H1 & Anor v W & Ors

An arbitrator must approach disputed evidence with an open and impartial mind. In a specialist industry, professional familiarity and knowledge of an expert’s reputation will not, by themselves, establish apparent bias. They cannot, however, be used to predetermine that a witness’s evidence will be accepted before it is heard and tested.

The fair-minded and informed observer test is objective and binary. The court does not balance apparent bias against inconvenience, cost or delay. An arbitrator’s lack of experience may explain inept conduct, but it does not cure statements showing that extraneous considerations may influence the assessment of evidence. On the facts, the arbitrator was removed under the Arbitration Act 1996.

The claimants, an insurer, applied under section 24(1)(a) of the Arbitration Act 1996 to remove W, the sole arbitrator in an insurance dispute concerning a film-production accident. The application alleged apparent bias arising from W’s comments about the parties’ witnesses and his professional relationships with witnesses called by the insured.

By the hearing, the challenge focused principally on W’s criticism of a witness who had changed the party calling him, and on statements that he knew the insured’s experts extremely well and would believe one expert’s evidence before hearing it. The central issue was whether those statements gave rise to justifiable doubts about W’s impartiality.

1. Applicable test. The court applied the fair-minded and informed observer test: whether, having considered the facts, such an observer would conclude that there was a real possibility that the tribunal was biased. The question is objective and is not resolved by weighing inconvenience, cost or delay. Where there is real ground for doubt, the doubt should be resolved in favour of recusal.
2. Industry relationships. The professional relationships between W and the insured’s witnesses, viewed objectively and in the context of a small film industry, did not themselves establish apparent bias. The parties had agreed to an industry arbitrator whose specialist knowledge and professional acquaintances were foreseeable. The arbitrator could use industry knowledge to understand evidence and trade practice, but not to supplement or replace evidence.
3. JH. W’s comments that JH had switched sides and that his evidence should be disallowed were misguided and concerning. They did not, in the circumstances, demonstrate animus or a closed mind. W made no final direction excluding JH’s evidence, and the remarks could be explained by inexperience and corrected at the evidential hearing.
4. The insured’s experts. W’s statements that he knew the insured’s experts extremely well, that their evidence need not be heard, and that he would believe JJ because JJ was a leading producer showed that he had allowed extraneous considerations to influence his assessment of evidence. The remarks concerned a live and important dispute about responsibility for safety on set. They were made before the evidence had been heard or tested and before W had heard the insurer’s witnesses. They therefore conveyed a real possibility of pre-judgment and apparent bias.
5. Outcome. W was removed as arbitrator under section 24(1) of the Arbitration Act 1996. Under section 24(4), he was entitled to fees and expenses up to the conclusion of the second procedural hearing on 23 November 2023.
6. Anonymisation. The judgment was published with the parties, witnesses and arbitrator anonymised. The confidentiality of the arbitration justified the exceptional withholding of the arbitrator’s identity in the circumstances.

First instance decision. No prior appellate decision is stated in the judgment.