Arbitration is typically a more versatile and efficient way of resolving commercial disputes than litigation, according to the Attorney General.
Rory Brady SC was introducing the guest speaker, Prof Gabrielle Kaufman Kohler, at the 80th meeting of the American Arbitration Association yesterday. This is the first time that its annual meeting has been held outside the US.
Mr Brady said that arbitration had a long history in Ireland, going back to the Brehon laws. He pointed out that under those laws the arbitrator's fee was one-twelfth of the value of the subject matter of the dispute, but added that he was required to pledge five ounces of silver in support of the award, and had to pay a fine of eight ounces if he failed to decide the matter.
Under British law the first Arbitration Act was passed in 1698, and arbitration continued to be an established feature of trade and commerce in Ireland.
In the 18th and 19th centuries much arbitration was carried out by the Ouzel Galley Society, which had its origins in the arbitration of a dispute over the ownership of pirates' loot captured on a ship called the Ouzel Galley.
The experience of this society, and its eventual decline in the 19th century, illustrated the connection between commercial activity and the demand for arbitration, Mr Brady said. He said that the increase in international commercial activity has forced us to fashion our legal system to meet the needs of a modern and dynamic economy.
Prof Kaufman Kohler said globalisation had weakened the fundamental functions that state law traditionally fulfilled, among them the operation of an adequate dispute resolution system.
"These functions need to be rebuilt in a global sphere," she said. "Because countries are entangled in their national boundaries, these functions are overtaken by what can be termed 'private actors'. These private actors include the international legal profession, mainly large Anglo-American law firms; academia; and arbitral institutions.
"Countries are losing the race to globalisation as the global communities of private actors are much faster in producing new legal norms and institutions."
She said that legislation is likely to remain the only means for a state to express its own interests and those of the stakeholders who have no say on the transnational level.