Legal Reasoning Across Commercial Disputes: Comparing Judicial and Arbitral Analyses

Research into legal reasoning has long been the exclusive purview of legal theorists, despite the central role that legal reasoning plays in real life.  However, the recent surge of interest in legal empirical scholarship suggests that legal reasoning may be a prime field for study.

There are multiple ways to approach an empirical analysis of legal reasoning, but one intriguing technique involves the comparison of arbitral and judicial reasoning.  Arbitration has long been framed as a ‘lesser’ form of justice than litigation—less formal, less transparent, less rigorous as a matter of both fact and law—but most of the conventional wisdom relating to arbitration was anecdotal at best.  Furthermore, that information dates back decades and may no longer reflect actual practices.

Several years ago, I began a large, multi-pronged empirical analysis of legal reasoning in commercial disputes, comparing data across three different axes:  the judicial-arbitral divide, the domestic-international divide and the common law-civil law divide.  The goal was to identify how judges and arbitrators resolve complex commercial disputes so as to help parties make more informed choices about where and how to resolve their legal disputes while also improving counsel’s ability to craft and present legal arguments and submissions that are more finely tailored to what decision-makers want to hear.  In so doing, the study has benefitted judges, arbitrators, and scholars by developing and presenting hard evidence on the beliefs and behaviours of commercial decision-makers around the world.

The study is in many ways unique, not only because of its findings but also because of its methodological rigour.  Rather than approach the issues from a single methodological perspective, the study undertakes three interrelated studies that allow the data to be triangulated and cross-analysed.  The three constituent studies include a large-scale international survey of judges and arbitrators, a series of semi-structured interviews of judges and arbitrators, and a detailed quantitative (coded) analysis of judicial decisions from three different jurisdictions and of arbitral awards from domestic and international commercial disputes.

The research is also remarkable in the way that it integrates different elements of legal reasoning.  Rather than considering the use of cases and statutes at a high degree of generality, the study considers how judges and arbitrators use such materials, including with respect to both the depth and breadth of their reliance on it.  The research also considers how judges and arbitrators integrate factual analysis into the reasoning process, an issue that is often of central importance to the determination of commercial disputes but one that is woefully understudied.  In so doing, the study tests and builds upon longstanding assumptions about legal reasoning in commercial dispute resolution, providing unique, evidence-based insights into this important area of law.

The full study will be published by Oxford University Press at the end of 2020.  However, those who are interested in the subject can read Chapter 1 on SSRN.  Chapter 1 provides an introduction to the book and outlines the theoretical debates relating to legal reasoning in commercial dispute resolution, paying particular attention to distinctions across the three major lines of analysis (judicial-arbitral, domestic-international and common law-civil law).  Not only does this chapter provide a foundation for further analysis, it provides a useful stand-alone analysis of scholarship in the area of legal reasoning.  As such, both the book and the initial chapter will be of interest to anyone, be they a scholar, practitioner, judge or arbitrator, who works in commercial dispute resolution. 

SI Strong is an Associate Professor at the University of Sydney Law School