A conversation with…David W Rivkin

David W Rivkin is Co-Chair of Debevoise & Plimpton’s International Dispute Resolution Group and was the IBA President from 2015–2016. In this ‘Conversation with…’, he discussed human rights due diligence, diversity in arbitration and investor-state dispute settlement with Angela Bilbow.

Angela Bilbow: Over recent years, we've seen a growing expectation from stakeholders for companies to operate more responsibly, and there have been recent initiatives rolled out in the United Kingdom and European Union around due diligence reporting on the human rights side. Should we expect more formal, major pieces of legislation policy in the near-term future?

David W Rivkin: Yes, I absolutely think so. We're close to the tenth anniversary of the United Nations Guiding Principles on Business and Human Rights. We've seen the impact that soft law of that form can have for businesses. And so many businesses have adopted their own practices and standards to meet those soft law principles.

The reason is clear – the violation of soft law can be even more damaging to companies, depending on what the circumstances are, than a violation of certain hard law standards. It can have a great impact on a company's reputation, on the financial risk the companies have.

What we're seeing now is, I'd say, a very important transformation of this soft law into hard law.

The EU's disclosure regulations are going to come into effect in March 2021. They set disclosure standards for asset managers to reflect and to present how they make decisions on environment, social and governance (ESG) risks. We've seen new conflict minerals regulation coming from the EU. We've seen the UK working to strengthen the Modern Slavery Act and its requirements.

AB: Regarding the new EU disclosure regulations, what have we already seen in the courts and what might we expect to see in the courts in the next year or two?

DWR: I think you could focus on two different areas. One area is increasing litigation, such as when a business and human rights problem arises for a company. We have seen plaintiffs bring claims arguing that the company’s disclosure about how they try to avoid such risks was inaccurate, in the same way that companies are charged with inadequate disclosure in other litigation.

The other trend I would mention is plaintiffs going after corporate parents. The issue of corporate separateness is becoming more and more critical in litigation. We've seen that in the Vedanta case, for example. It was held that UK-domiciled parent companies may – it was clear that it was only ‘may’ – owe a duty of care to third parties who were impacted by the operations of their foreign subsidiaries.

AB: How is lack of diversity in arbitration being addressed?

DWR: It's a very important issue for us. We've seen a great advance over the last several years since the Equal Representation in Arbitration Pledge was pushed in firms, like ours, and across institutions, like the London Court of International Arbitration, the ICC Court of Arbitration, Hong Kong International Arbitration Centre and the American Arbitration Association, who adopted it to increase the number of women serving as arbitrators.

We've now started to see a similar focus on the lack of diversity among arbitrators and the need to develop arbitrators among lawyers of colour and lawyers from parts of the world where they are not serving as arbitrators as much.

So, you're starting to see training and mentoring programmes, and a focus on making sure that when we are discussing with clients a selection of potential arbitrators, it's a diverse group.

AB: President-elect Biden has already promised to re-join the Paris Agreement on climate change. What else might we expect at an international law level within Biden's first 100 days as president?

DWR: President-elect Biden has already said he's going to cancel withdrawal from the World Health Organization. Trump withdrew from the United Nations Educational, Scientific and Cultural Organization (UNESCO), and I expect that the new president will want to return to that. Similarly, the United States worked a number of years ago to become a member of the UN Human Rights Council, and then Trump withdrew.

One of Biden’s goals is to reassure the international community that we are part of it again, that we respect international law. And certainly, one of the things we've seen over the years is how much the rest of the world depends upon the US being a good example for the rule of law. We've seen such a deterioration in the rule of law in the US over the last few years.

AB: Do you believe that investor–state dispute settlement (ISDS) still serves the best interests of both states and companies?

DWR: I do. You have to step back and think about what investment treaties are meant to do. Countries enter into them because they can see that it will, in fact, lead to greater investment.

In order to promote that investment, countries have to make certain promises to investors that they're going to be subject to a rule of law, which may go beyond whatever national law provides. Investors want to know that they are protected against expropriation without proper compensation, that they will be treated in the same way as companies from that same host country. And the kinds of promises that exist in investment treaties are there for a reason. That's what's needed in order to make the treaty work. The promises are meaningless unless there is some effective means to resolve any disputes about it.

The ISDS system has undergone a lot of scrutiny in recent years and that scrutiny is a good thing. I think as a result we see a lot more transparency in these cases.

AB: How have client expectations of lawyers changed in recent years?

DWR: I think that clients increasingly want their lawyers to be focusing on the broader issues and not just answering whatever the particular narrow question is or to serve the narrow need.

When I was IBA President, I often gave speeches about the important role of the lawyer as a wise counsellor, where the lawyer goes beyond and thinks about not just the legal risk that a client may undertake, but the reputational risk and the risk to other stakeholders, the financial risks that may be involved and really focuses on the entire problem and can advise on those issues.

This is a heavily abridged version of a longer interview. The full version is available on the IBA website: ibanet.org.