[IOT] IRP-IOT action items/next steps on Initiation

Flip Petillion fpetillion at petillion.law
Tue Dec 6 14:26:50 UTC 2022


Here are some thoughts. Apologies, but I don't have time to prepare a more detailed overview.

I believe it is worth reminding the CCWG-Accountability Recommendation on accessibility and costs:

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With respect to the loser pays/fee shifting, I see no basis to distinguish between non-profits and for-profits.

The way that cost the loser pays/fee shifting has been transposed into Articles 4(3)(e)(ii) and 4(3)(r) of the Bylaws seems unbalanced and in contradiction with the stated purposes of the IRP (Article 4(3)(a) of the Bylaws).

Article 4(3)(e)(ii) provides that, in certain circumstances (i.e., non good faith participation to CEP), the IRP Panel shall award to ICANN all reasonable fees and costs incurred by ICANN, including legal fees.

There is no such provision for a reimbursement of all reasonable fees and costs incurred by a Claimant. Yet the IRP is a system to ensure ICANN’s compliance. As a result, ICANN is the main beneficiary of IRP rulings. Without a balanced cost shifting model, the system risks to install unwarranted burdens for Claimants who risk paying the bill for enhancing ICANN’s accountability.

Article 4(3)(r) in fine provides for possible fee shifting in the event of frivolous or abusive claims or defenses. To date, there is no cost shifting case law. That could be because the burden of Article 4(3)(r) is too high.

In international arbitration, the principle of costs follow the event is well accepted (with fairness adjustments). The requirement of frivolous or abusive claims or defenses seems at odds with this principle and with the stated purposes of an IRP. According to these stated purposes, IRPs are aimed at securing the “accessible, transparent, efficient, consistent, coherent, and just resolution of Disputes” and to lead to final resolutions “consistent with international arbitration norms”. Deviating from the costs follow the event principle to ICANN’s benefit risks making IRPs less accessible, less just, and not consistent with international arbitration norms.

In my experience, adherence to the costs follow the event principle has never incentivized a commercial entity to engage in imprudent management or in making intemperate legal expenses. Efficiency as to time and costs is an important driver in international arbitration, which always forms part of the decision-making matrix. Even when an arbitral tribunal decides to shift costs, it will have no scruples about rejecting the reimbursement of excessive or unnecessary legal costs.

Instead of trying to re-invent the wheel, I would make a plea of confirming ourselves to well-established norms of international arbitration and adapting where necessary to serve the stated purposes of an IRP. In my view, the stated purpose of making IRPs accessible favours adherence to the costs follow the event principle, provided Claimants are offered some protection in line with the stated purpose of IRPs to ensure ICANN’s accountability to the global Internet community and Claimants.

I’ll try to join you in the call tonight.



Flip Petillion
fpetillion at petillion.law<mailto:fpetillion at petillion.law>

[id:image001.png at 01D3691D.DA7539C0]<https://www.petillion.law/>

  Attorneys – Advocaten – Avocats

From: IOT <iot-bounces at icann.org> on behalf of "McAuley, David via IOT" <iot at icann.org>
Reply to: "McAuley, David" <dmcauley at Verisign.com>
Date: Tuesday, 6 December 2022 at 12:46
To: "silber.mike at gmail.com" <silber.mike at gmail.com>, "Malcolm at linx.net" <Malcolm at linx.net>
Cc: "iot at icann.org" <iot at icann.org>
Subject: Re: [IOT] IRP-IOT action items/next steps on Initiation

Thank you, Malcolm and Mike.

I agree with how Mike approaches these matters, subject to these further comments:

  1.  Needy claimants should be able to bring IRPs and I encourage ICANN to pay special heed to Bylaw 4.3(y) regarding meaningful participation by those who might otherwise be excluded.

  1.  I agree that costs and fees are best handled by the panel and Mike’s guardrails of fairness and equity seem right, as does note of having rules that conform with international arbitration norms.

  1.  I am not convinced that non-commercial claimants should be able to capture all of their costs if they prevail unless ICANN was frivolous in its defense. Parties who are able typically shoulder their own costs and this helps ensure that the costs incurred remain subject to prudent management.
Sorry I will not be able to attend today.

Best wishes,

David McAuley
Policy Director
Verisign, Inc.

From: Mike Silber <silber.mike at gmail.com>
Sent: Tuesday, December 6, 2022 6:22 AM
To: Malcolm Hutty <Malcolm at linx.net>
Cc: McAuley, David <dmcauley at Verisign.com>; susan.payne at comlaude.com; iot at icann.org
Subject: [EXTERNAL] Re: [IOT] IRP-IOT action items/next steps on Initiation

Caution: This email originated from outside the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.
Hi Malcom

I think you make several excellent points below. At the same time I think you are ascribing certain intent to some of David’s statements that may be unwarranted. Rather than responding in-line [to avoid picking nits] or speaking for David [as he can respond if he feels it is required] I will top post.

My personal view [recognising that i have been observing in the background and may not be totally current]:

  *   a party intending to use the IRP (“applicant”) should pay a filing fee. The filing fee should be a first gate to limit trivial or vexatious use of the process, but not so onerous to prevent use of the process. Deserving [needy] applicants should be entitled to seek a waiver of the fee from the panel;
  *   a successful applicant should be entitled to have the filing fee refunded;
  *   the question of costs and fees is best dealt with by the panel having regard to fairness and equity with the IRP process giving some limited guidance which could be:

     *   commercial applicants should pay their own costs [they will presumably get commercial benefit from a positive outcome] and only be entitled to a refund of those costs if ICANN’s opposition is frivolous or vexatious;
     *   non-commercial applicants must apply to the panel for their costs to be met, which may be granted in whole or in part;
     *   ICANN pays its own costs and is only able to claim back costs from an (i) unsuccessful; and (ii) frivolous or vexatious applicant [an applicant who is unsuccessful but not frivolous or vexatious should nt be act risk of a claim for ICANN’s costs];
     *   ICANN should pay all the panel / IRP process costs [except for the initial filing fee] and is only entitled to claim a refund of costs if a finding is made that the claim is frivolous or vexatious; and
     *   a party’s costs include both internal, legal and administrative costs [courier, translation etc] and should follow the above process.



On 5 Dec 2022, at 18:32, Malcolm Hutty via IOT <iot at icann.org<mailto:iot at icann.org>> wrote:

Dear all,

David wrote:
Presumably, a prevailing party will make a claim for such costs or fees, the losing party will have an opportunity to challenge the claim, and we should trust the panel to make an appropriate ruling. I believe that here too they should act consistent with international arbitration norms (see also Bylaw 4.3(a)(viii)).

I think this notion that a prevailing party will have to claim for costs and fees, while typical for litigation in a court of law, is a big part of what the IRP was intended to avoid.

The idea was that ICANN would have an independent review process that claimants could access to resolve disputes. Nothing in the bylaws authorises ICANN (or its provider) to condition access this process on payment of fees, just as there is no suggestion that you have to pay to file a Request for Reconsideration or to use the services of the Ombudsman.

Moreover, in David’s formulation, if a Claimant loses, then they’re not the prevailing party and would not be able to claim for costs and fees. This is quite different to the bylaws requirement that ICANN pays the costs of the IRP, with them only being shifted when the claim was frivolous or vexatious.

David asserts that the bylaws language requiring ICANN to pay the costs of the IRP mechanism only applies to some intangible costs that form a ‘mechanism’ that somehow exclude the actual operation of that mechanism. I find that distinction artificial, a construct invented to support charging the Claimant, but without foundation in the bylaws.

We should always look to the Bylaws themselves to understand what is required.

David’s assertion that the ‘IRP mechanism’ and the process of hearing a dispute are distinct is actually contradicted directly by the bylaws themselves: Bylaw 4.3(r) states quite explicitly that the fees of the panellists who hear the dispute are included in the definition of administrative costs. Yet these fees are incontrovertibly the cost of hearing one individual dispute. So any possible suggestion that the costs of hearing the dispute are outside the definition of “administrative costs” is directly excluded by the clear language of 4.3(r).

This notion of an IRP mechanism as being something other than the process of hearing disputes arises only because we keep using shorthand: we talk of “the IRP” and forget what the IRP actuall is. We need to look back to the bylaws definition of the IRP to see what the “IRP” really means.

Bylaws Article 4.3 (a) begins as follows:
“ In addition to the reconsideration process described in Section 4.2, ICANN shall have a separate process for independent third-party review of Disputes (defined in Section 4.3(b)(iii)) alleged by a Claimant (as defined in Section 4.3(b)(i)) to be within the scope of the Independent Review Process ("IRP"). The IRP is intended to hear and resolve Disputes for the following purposes ("Purposes of the IRP"): […]”

This is where IRP is defined: it is a defined term. It refers to “a separate process for independent third-party review of Disputes”. Accordingly when 4.3(r) speaks of ICANN paying for the ‘IRP mechanism’, it is referring to “the process for independent third-party review of Disputes”. The mechanism *is* the process: there is nothing else.

Bylaw 4.3(r) requires ICANN to pay for the process of those Disputes being reviewed. That is what ‘IRP mechanism’ means. Which is entirely consistent with everything else that is said in the Bylaws, including the Purposes.

Kind Regards,


 Malcolm Hutty | Executive Director, Legal and Policy
T: +44 7789 987 023 | www.linx.net<http://secure-web.cisco.com/1gXx9xbCru0oZFI-I6cKHfFRzZEJ-IRIPzx0q-EjM2gMoAdTyFo_FX-O6lwVvRquI9YLJrCdQnSszD5STY3x1BoGInoPNWMOLYZJzOUfglxuuDMmUe2qejkTskCGtyUNyozbxhdc3itm1saMNr9-wXhcN4fjFKWSGBJpvyIe9wrsADkmLcpPC35AiYV1lMaKBYAgH0yxoA2W7hZ9ppxPDLvcOViSKGwUq6AQNxcSlf9EjZpWPBZbhLcig2JXbKWNZDIcgxRxCsEnrINITeiHSI3qRZdBFC8UgD9reu76GKaU/http%3A%2F%2Fwww.linx.net%2F>

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From: IOT <iot-bounces at icann.org<mailto:iot-bounces at icann.org>> On Behalf Of McAuley, David via IOT
Sent: 05 December 2022 13:28
To: susan.payne at comlaude.com<mailto:susan.payne at comlaude.com>; iot at icann.org<mailto:iot at icann.org>
Subject: Re: [IOT] IRP-IOT action items/next steps on Initiation

Thank you, Susan.

My thoughts are below since I need to send apologies for the meeting tomorrow. There is a conflicting meeting for the Community Representatives Group to nominate members of the IRP Standing Panel that I must attend.

With respect to the issue of filing-fee costs, Bylaw 4.3(r) indicates that ICANN will bear the administrative costs of maintaining the IRP mechanism. In my opinion that does not include a complainant’s filing fee, which instead should be set (probably by ICDR) so as to conform to international arbitration norms (Bylaw 4.3(n)(i) and (ii)). Whatever is set as an initiation fee should not act as an unreasonable bar to filing complaints, I think, as that would probably not conform to such norms.

On other costs that might routinely apply, I think that we should ensure that a clear and easily findable link to the schedule of applicable fees on the ICDR website be available. It should not take the labors of Hercules to find these fees.

As for any other administrative costs and/or fees that might be shifted under Bylaw 4.3(r), I appreciate the thought you put into this as manifest in the google doc. But I tend to think it better not to try to anticipate/imagine such costs. Here, I think the principle in the bylaw is ok as written.

Presumably, a prevailing party will make a claim for such costs or fees, the losing party will have an opportunity to challenge the claim, and we should trust the panel to make an appropriate ruling. I believe that here too they should act consistent with international arbitration norms (see also Bylaw 4.3(a)(viii)).

Best wishes,

David McAuley
Policy Director
Verisign, Inc.

From: IOT <iot-bounces at icann.org<mailto:iot-bounces at icann.org>> On Behalf Of Susan Payne via IOT
Sent: Friday, December 2, 2022 5:01 PM
To: iot at icann.org<mailto:iot at icann.org>
Subject: [EXTERNAL] [IOT] IRP-IOT action items/next steps on Initiation

Caution: This email originated from outside the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.
Hi all

On our last call, our discussion on initiation we pent much of our time focussed on the allocation of costs and fees, with reference to the language of Bylaws 4.3(r).  As a result of this, we had one action item for Sam, but also a task for all of us to try to give clarity for potential claimants on the costs they will be responsible for.

We also captured a useful suggestion to use flashes to indicate an updated section (as the UN do), with respect to the planned improvements to the IRP website area which have been anticipated for some time now.

Action items from our previous call
Sam to provide information on costs awards from pre-Transition (2016) IRPs, which may assist with this discussion

Action for us all
Irrespective of where we come out on the narrow issue of the IRP filing fee, Kavouss raised a point on our last call which I think resonated with most of the group.  Participants and potential participants of an IRP need to know what costs they will be responsible for.  This is directly relevant to initiation because potential Claimants to an IRP should be aware of what they are committing to when they make the decision to proceed.  If Bylaws 4.3(r) is ambiguous – which, based on our discussions, does seem to be the case – then we must give them this clarity.  Even if we cannot be exhaustive as to all possible costs, we should be able to identify sufficient examples to serve as a guide for participants on what types of costs will fall to them.

Below is a link to a Google Doc where I have started to capture types of costs that would likely be incurred in an IRP, and tried to identify who bears these costs, currently.  In order to make a start on this, I went back to the .WEB decision since this is a case decided under the new Bylaws and where there were some costs orders made, and I have included a footnote to explain where the costs addressed in that decision seem to give us some guidance.  As a result, for a few items I have indicated both that the Claimant initially paid and that this was later ordered to be reimbursed by ICANN. Indeed, the Claimant’s filing fee, which we have been discussing at length, does appear to have been reimbursed in the .WEB case.


I am putting this forward to get the ball rolling.  I am sure that there will be other costs/fees that I have not thought about, and I hope that others in the group will add to this, particularly those who are practitioners. I would also welcome input from IOT members who disagree with my characterisation of any of these items.  I am not a practitioner so may inadvertently have mischaracterised something.

Susan Payne
Head of Legal Policy


28-30 Little Russell Street,
London WC1A 2HN, UK
T +44 (0) 20 7421 8250
Ext 255


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