Adjudicator Compensation Systems and Investor-State Dispute Settlement
OECD Working Papers on International Investment 2017/05, http://dx.doi.org/10.1787/c2890bd5-en
Posted: 8 Apr 2018
Date Written: November 15, 2017
Abstract
Compensation for adjudicators is generally considered as a core issue for judicial independence and for attracting good judges in the institutional design for courts. This paper examines compensation systems for adjudicators and dispute settlement administrators in investor-state dispute settlement (ISDS). The paper uses in part a comparative perspective based on approaches in domestic courts in advanced economies, an approach rarely taken in analysing investor-state arbitration.
The first section of the paper provides historical context and examines the reform of remuneration of judges to replace private litigant fees with salaries in colonial America and the United States, France and England in the 18th and early 19th centuries. Subsequent sections address debates over the impact of compensation systems on adjudicators; contemporary approaches to the compensation of judges in advanced economies; the co-existence in advanced economies of national courts with salaried judges since the early 19th century with generally strong support for commercial arbitration based on ad hoc fee-based remuneration; and similarities and differences between commercial arbitration and investment arbitration, focusing on how the largely similar compensation systems may have different effects and be differently perceived by the public.
Annexes to the paper report on discussions about adjudicator compensation at the 2016 OECD Investment Treaty Conference and gather some preliminary facts about adjudicator and dispute administrator compensation in investor-state arbitration as well as in the investment court system included in the recent EU-Canada CETA trade and investment agreement.
Keywords: investment treaties; investor protection; comparative law; legal history; Alexander Hamilton; Jeremy Bentham; Voltaire; investor-state dispute settlement; arbitration; courts; international economic law; arbitrator fees; conflicts of interest; judicial compensation; incentives; investment law
JEL Classification: H4, J3, J33, J44, K23, K33, K41, L33, N20, N4
Suggested Citation: Suggested Citation