Hafner-Burton, Puig, & Victor: Against International Settlement? Secrecy, Adjudication and the Transformation of International Law

Emilie Marie Hafner-Burton (Univ. of California, San Diego - School of Global Policy and Strategy), Sergio Puig (Univ. of Arizona - Law), & David G. Victor (Univ. of California, San Diego - School of Global Policy and Strategy) have posted Against International Settlement? Secrecy, Adjudication and the Transformation of International Law. Here's the abstract:

Three decades ago Owen Fiss published a landmark article - Against Settlement - which argued that the rising popularity of pretrial settlement and alternative dispute resolution was an unwelcome trend. It sacrificed the public benefits of complete and transparent adjudication for the private expedience of settling disputes. In this Article, we propose that international law is on the cusp of its very own settlement crisis.

As international governance is taking on increasingly more difficult and demanding topics, firms and governments have radically expanded the use of international courts to resolve complex legal disputes. In their effort to become more legitimate and effective, these bodies have adopted a wide array of reforms aimed at promoting transparency. Using a unique dataset on all investor-state arbitrations under the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), we show that those reforms are, in part, failing because parties have found ways to use pre-judgment or ‘out-of-court’ settlement to hide procedural and substantive outcomes. In fact, such settlements are the dominant means by which parties keep the outcomes of investment adjudication secret.

We illustrate, statistically, how different factors explain why private interests favor settlements and argue that international scholars have tended to view dispute resolution as an unalloyed good even when it is done in private - exactly the bias Fiss warned about long ago. Reforms, such as stronger disclosure rules and supervised settlements, will be needed to stem the settlement crisis in international law and yield a more consistent, coherent, and legitimate corpus of law.