ARIAS•U.S.
Intensive Arbitrator
Training Workshop
New York, New York
September 24, 2015
Welcome and Overview
Charles W. Fortune
Seiger Gfeller Laurie LLP
ARIAS•U.S. Education Committee
Ethics Responsibilities
as Arbitrators
Lisa Keenan
Odyssey Reinsurance Company
ARIAS•U.S. Education Committee
History and Evolution
• ARIAS•U.S. Guidelines for Arbitrator Conduct (“Code of Conduct”)
– Originally drafted in 1998
– Contained ten Canons with explanatory comments
• Additional ARIAS•U.S. Ethics Guidelines
– Created in 2010 as a supplement to the Code of Conduct
•
•
•
•
Pre-appointment interviews
Disclosures
Whether to accept an appointment as arbitrator or umpire
Ex parte communications
• ARIAS•U.S. Code of Conduct
– Effective as of January 1, 2014
– Merged “Code of Conduct” (1998) with the “Additional Guidelines” (2010)
– Amendments made to all Canons
Key Considerations
•
•
•
•
Integrity (I)
Fairness (II)
Competence (III)
Disclosure (IV)
• Communications (V)
• Confidentiality (VI)
• Advancing the
Process (VII)
• Just Decision (VIII)
• Advertising (IX)
• Fees (X)
The Preamble
 Purpose is to “provide guidance to arbitrators in the conduct of
insurance and reinsurance arbitrations”
 Sets forth considerations and behavioral standards for arbitrators
 “Comments” explain the meaning and purpose of each Canon
 Not intended to override the parties’ agreement
 Do not displace applicable laws or arbitration procedures.
 Expected that parties and counsel conform behavior to the
Canons and avoid placing arbitrators in positions where they are
unable to sit or risk contravening the Canons
Definitions
• Affiliate: an entity whose ultimate parent owns a majority of both the
entity and the party to the arbitration and whose insurance and/or
reinsurance disputes, as applicable, are managed by the same individuals
that manage the party’s insurance and/or reinsurance disputes
• Arbitrator: a person responsible to adjudicate a dispute by way of
arbitration, including the umpire on a three (or more) person panel of
arbitrators
• Party: the individual or entity that is named as the petitioner or
respondent in an arbitration, as well as the affiliates of the named party
• Umpire: a person chosen by the party-appointed arbitrators, by an
agreed-upon procedure, or by an independent institution to serve in a
neutral capacity as chair of the panel
INTEGRITY – Canon I
Arbitrators should uphold the
integrity of the arbitration
process and conduct the
proceedings diligently.
INTEGRITY – Canon I
Comments, ¶¶ 1, 2 :
• Foundation of support for arbitration is
confidence in the fairness and competence of
arbitrators
• Duty to be honest, act in good faith and to be
fair, diligent and objective in rendering
decisions
• Should act w/out being influenced by outside
pressure, fear of criticism or self-interest
INTEGRITY— Canon I
Comments, ¶ 3: When Must An Arbitrator Refuse to Serve?
• Where candidate has a material financial interest in a
party that could be substantially affected by the outcome
(¶ 3(a))
• Where candidate does not believe that s/he can render a
decision based on the evidence and legal arguments
presented to all members of the panel (¶ 3(b))
• Where the candidate currently serves as a lawyer for one
of the parties (¶ 3(c))
INTEGRITY – Canon I
Comments, ¶ 3: When Must An Arbitrator Refuse to Serve?
• Where candidate is nominated for role of umpire and is
currently a consultant or expert for a party (¶ 3(d))
• Where candidate is nominated for role of umpire and
was contacted prior to nomination by one side with
respect to this matter (¶ 3(e))
• Where candidate is umpire in one matter and is solicited
to serve as party-appointed in a new matter by a party to
matter where acts as umpire (¶ 3(f))
INTEGRITY – Canon I
Comments, ¶ 4: When Should An Arbitrator Refuse to Serve?
• Exercise discretion and consider whether any factor would
likely affect judgment and, if so, decline the appointment. (¶ 4
(a)-(k))
• Where circumstances in which an arbitrator must decline an
appointment exist as to affiliate or entity w/the same TPA or
manager as a party, an arbitrator should presumptively
decline to serve unless it is clear that the relationship to the
party is sufficiently attenuated that the policies underlying ¶ 3
are not implicated (¶ 4(k))
FAIRNESS –Canon II
Arbitrators shall conduct the
dispute resolution process in a
fair manner and shall serve
only in those matters in which
they can render a just
decision. If at any time the
arbitrator is unable to conduct
the process fairly or render a
just decision, the arbitrator
should withdraw.
FAIRNESS –Canon II
– Before accepting an appointment (¶1):
•
•
•
•
•
Identify the parties (affiliates, predecessors, successors, TPAs)
Identify counsel;
Identify other arbitrators;
Identify witnesses;
Identify general facts; anticipated issues and positions
– Refrain from offering assurances, predictions or stating
definitive positions ( ¶ 2 )
– Should not offer commitment to dissent or to work for a
compromise in event of disagreement with proposed
award (¶ 3)
COMPETENCE – Canon III
Candidates for appointment as arbitrators
should accurately represent their
qualifications to serve.
DISCLOSURE – Canon IV
Candidates for appointment as arbitrators
should disclose any interest or relationship
likely to affect their judgment. Any doubt
should be resolved in favor of disclosure.
DISCLOSURE – Canon IV
• Interest/relationship that others could reasonably believe would
be likely to affect an arbitrator’s judgment (¶1).
• Before accepting, diligent effort to identify/disclose (¶1):
 Any financial or personal interest in the outcome
 Any existing or past financial, business, professional, family or social
relationship with the parties
 Where appropriate/known, current employer’s financial interest
 Where appropriate/known, current employer’s existing or past
financial or business relationship with the parties
• Candidates shall also disclose (¶2):



relevant positions taken in published works/expert testimony;
extent of previous appointments as an arbitrator
past or present involvement with the contracts or claims at issue
DISCLOSURE – Canon IV
• When an arbitrator is unable to disclose because of
other conflicting obligations, s/he should withdraw
or obtain informed consent of both parties (¶ 4)
• Arbitrator should not withdraw at his or her own
instigation absent good reason (¶ 5)
• The duty to disclose is a continuing obligation (¶ 6)
COMMUNICATION WITH THE
PARTIES – Canon V
Arbitrators, in communicating with the
parties, should avoid impropriety or the
appearance of impropriety.
COMMUNICATION WITH THE
PARTIES – Canon V
• A party arbitrator should not review any documents
that the party appointing him or her is not willing to
produce to the opposition. (¶3)
• Where communications are permitted:
• Arbitrator may comment on usefulness of expert evidence,
issues s/he feels are not being clearly presented, or arguments
to emphasize/abandon;
• Provide impressions as to how an issue might be viewed by the
Panel, but may not disclose communications / deliberations
• Arbitrator should not edit briefs, interview or prepare
witnesses, or preview demonstrative evidence
CONFIDENTIALITY – Canon VI
Arbitrators should be faithful to the
relationship of trust and confidentiality
inherent in their position.
CONFIDENTIALITY – Canon VI
• Arbitrators shall not… (¶¶ 1-3)
 Use confidential information acquired in arbitration to
gain a personal advantage
 inform anyone of an arbitration decision in advance of
the time it is given to all parties
 assist in post-arbitral proceedings, except as required
by law
 inform anyone about the contents of the deliberations
• Arbitrator may put deliberations or communications on the
record to the extent (but only to the extent) reasonably necessary
to expose serious wrongdoing, including actions that are
contemplated by Section 10(a) of the Federal Arbitration Act.
ADVANCING THE ARBITRAL
PROCESS – Canon VII
Arbitrators shall exert every reasonable effort
to expedite the process and to promptly issue
procedural communications, interim rulings,
and written awards.
JUST DECISIONS – Canon VIII
Arbitrators should make decisions justly,
exercise independent judgment and not
permit outside pressure to affect decisions.
ADVERTISING – Canon IX
Arbitrators shall be truthful in advertising
their services and availability to accept
arbitration appointments.
FEES – Canon X
Prospective arbitrators shall fully disclose
and explain the basis of compensation, fees
and charges to the appointing party or to
both parties if chosen to serve as the
umpire.
Powers of
Arbitration Panels
Mary Kay Vyskocil
Simpson Thacher & Bartlett LLP
ARIAS•U.S. Education Committee
Authority for Arbitration Panel Powers
• Contract
– What does the arbitration agreement say?
• Law
– Federal Arbitration Act (FAA) – 9 U.S.C. §§1-16
• applicable to interstate/foreign commerce arbitration agreements
– (Revised) Uniform Arbitration Act
• state-specific laws, applicable to intra-state arbitration agreements
– International arbitration?
• International laws
• United Nations Commission on International Trade Law
Arbitration Rules (UNCITRAL Rules)
29
Contractual Authority
• What powers are enumerated in the arbitration clause?
– May not be very specific
• Possible powers
• Possible limitations
– May reference institutional rules/procedures
• ARIAS-U.S. Rules for the Resolution of U.S. Insurance and
Reinsurance Disputes
• AAA Rules
30
Contractual Authority
• What powers are enumerated in the arbitration clause?
– May specify qualifications of arbitrators
– May dispense with strict rules of evidence
– May impose certain parameters or restrictions
31
Authority Under the FAA
• FAA does not explicitly discuss many powers.
– Example: Witnesses – (9 U.S.C.§ 7 )
 may summon any person to appear as a witness
 may summon to bring any book, record, document,
or paper
 served in the same manner as court subpoenas
32
Authority Under the FAA
• Understanding the limitations is important!
• Court may vacate an award (9 U.S.C.§ 10):
– Award was procured by corruption, fraud or undue means
– Evident partiality or corruption in the arbitrators
– Arbitrators refused to postpone hearing or refused to hear
pertinent & material evidence (or other misbehavior)
– Arbitrators exceeded their powers
33
Authority Under the FAA
• Court may modify/correct an award (9 U.S.C§ 11):
– Evident material miscalculation or mistake
– Arbitrators decided a matter that was not submitted
– Award imperfect in form
34
Authority Under State Arbitration Acts
• (Revised) Uniform Arbitration Act (RUAA) specifies
certain powers such as:
– decide whether contract containing arbitration agreement
is enforceable (§ 6)
– issue interim/provisional awards (§ 8)
– rule on requests for summary disposition (§ 15)
– award punitive damages, attorneys’ fees & expenses, and
other relief (§ 21)
• CAUTION: need to look at law in particular state
35
COMMON ISSUES
36
Arbitrability
• What issues should be decided by the courts and
what issues should be decided by the arbitrators?
– Gateway issues decided by the court:
• Was a contract formed between the parties that contains an
arbitration clause?
• Does the dispute fall within the contract’s arbitration clause?
– Procedural issues decided by the arbitrators
37
Consolidation
• Arises when there are multiple claims, multiple
contracts (or layers), multiple reinsurers.
– It may be more efficient, fair, & inexpensive to resolve
in a single arbitration.
• Some arbitration clauses expressly permit
consolidation (check the specific language):
“If more than one reinsurer is involved in the same
dispute, all such reinsurers shall constitute and act as
one party…”
• If arbitration agreement is silent…
38
Consolidation
• FAA – silent on consolidation issue
• RUAA – courts determine whether to consolidate when
not prohibited by contract (§ 10)
• General Rule – cannot consolidate absent contractual
authority or agreement of parties
– See, e.g., Gvn’t of U.K. of Great Britain v. Boeing Co., 998 F.2d 68 (2d
Cir. 1993).
• Alternative Rule – consolidation appropriate where
arbitrations share common questions of law and fact
and no party will be prejudiced
– See, e.g., Vigo Steamship Corp. v. Marship Corp., 26 N.Y.2d 157 (1970).
39
Consolidation
• Case law… 3 key U.S. Supreme Court cases:
 Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79
(2002) – procedural matters are questions for the
arbitrators
 Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003) –
whether to allow class arbitration is a question for the
arbitrators
 Stolt-Nielsen v. AnimalFeeds Int’l Corp., 559 U.S. 662
(2010) – did not directly address the issue but calls into
question whether arbitrators can decide the issue
40
Consolidation
• Stolt-Nielsen:
 About class arbitration, not consolidation
 Arbitration panel had issued award saying that class
arbitration was permissible, even though arbitration
clause was silent and no evidence of parties’ intent
 Supreme Court vacated the award, concluding that
the arbitrators had exceeded their powers
41
Confidentiality
• Do arbitrators have the power to issue a confidentiality
or protective order where a contract is silent and
absent complete agreement among the parties?
– FAA – silent
– RUAA §17(e)
“An arbitrator may issue a protective order to prevent
the disclosure of privileged information, confidential
information, trade secrets, and other information
protected from disclosure to the extent a court could if
the controversy were the subject of a civil action in this
State.”
42
Confidentiality
• No uniform rule – must look to custom/practice, state law
and governing arbitration rules, etc.
– Broad power of arbitrators to decide procedural issues and
interpret arbitration rules (e.g., AAA rules).
– Custom and practice of confidentiality in arbitrations (i.e.,
implicit term in arbitration clauses) – parties chose a resolution
outside of a public court process.
• Post-award judicial review
– confidentiality or protective order is subject to court’s evaluation
against the presumption of public access to documents.
• See City of Newark v. Law Dep’t of City of N.Y., 754 N.Y.S.2d 141 (Sup. Ct.
N.Y. Cnty. 2002).
43
Discovery – General Discovery Disputes
• Some arbitration clauses expressly address the
panel’s authority to resolve discovery dispute.
• If the arbitration clause is silent …
– It is commonly recognized that arbitrators have broad
authority to resolve procedural disputes, including the
scope & nature of permissible discovery.
44
Discovery – Third-Party Discovery
• FAA (9 U.S.C§ 7)
– arbitrators may summon witnesses to attend before them and
bring documents with them
• RUAA (§ 17)
– arbitrators may issue subpoenas for attendance of witnesses
and production of documents at a hearing
– can also permit depositions of witnesses who cannot attend the
hearing
• ARIAS-U.S. Rules for Resolution of U.S. Insurance and
Reinsurance Disputes
45
Interim Rulings
• Unless prohibited or limited by arbitration agreement,
arbitrators generally have the authority to enter
interim awards as appropriate.
• RUAA – expressly provides that arbitrators can issue
interim/provisional awards (§ 8)
• FAA – silent as to interim/provisional rulings
• Examples:
– Pre-hearing security
– Discovery rulings
– Claim or issued-dispositive motions
46
Final Awards – Reasoned Awards
• Arbitration clauses typically require only that
awards be in writing.
• Clauses typically do not require the panel to explain
the basis of its decision.
• Parties may agree that they want a reasoned award.
• FAA & RUAA – silent
• ARIAS-U.S. Practical Guide to Reinsurance
Arbitration Procedure
47
Final Awards – Remedies
• Compensatory Damages
• Declaratory judgment
• Specific performance
– How to handle future claims
• Interest
• Attorneys’ fees, costs and punitive damages if not
precluded by arbitration agreement
48
Final Awards – Remedies
• FAA – silent
• RUAA – arbitrators can award punitive damages,
attorneys’ fees & expenses, and other just &
appropriate relief, must justify basis for punitive
damages (§ 21)
49
After the Award
• “Functus officio”
– “A task performed”... a doctrine that limits a panel’s
ability to revisit issues once it has ruled
“Arbitrators exhaust their power when they make a final
determination on the matters submitted to them. They have no
power after having made an award to alter it; the authority
conferred on them is then at an end.”
Bayne v. Morris, 68 U.S. (1Wall.) 97, 99 (1863)
– Once the panel makes a final award, it no longer has
any authority.
50
Functus Officio
• Two elements:
– There must be a final award executed by the arbitrator; and
– That final award must be delivered or declared.
51
Effective Service As An
Arbitrator – Part One
David Thirkill
ARIAS•U.S. Certified Arbitrator
Effective Service As An Arbitrator – Part I
Mock Arbitration Sessions Address:
 Organizational Meeting (OM)
• Confidentiality Agreement – Panel Authority?
• Discovery – Original Claim Files and Similar Claims
• Depositions – number and non-party depositions
 Hearing
• Bad Faith Issues
• Number of Occurrences
Effective Service As An Arbitrator – Part I
Notes for this Presentation:
• Typical to discuss confidentiality, hold harmless, motion
practice, ex parte communications, and hearing dates at OM
• Not typical to determine discovery issues at OM
• Typical issues to be dealt with at a hearing
• This presentation tries to give pointers on how to approach your
role as respects any arbitration meeting (e.g., organizational,
telephonic, interim motions and hearing on the merits).
Effective Service As An Arbitrator – Part I
“ARIAS” ARBITRATIONS
Theory
v.
Practice
ROLE OF ARBITRATOR: THEORY
 ARIAS Code of Conduct – Canon 1, Comment 2
Arbitrators owe a duty to the parties, to the industry, and to
themselves to be honest; to act in good faith; to be fair,
diligent, and objective in dealing with the parties and
counsel and in rendering their decisions . . . . Arbitrators
should act without being influenced by outside pressure,
fear of criticism or self-interest.
ROLE OF ARBITRATOR: PRACTICE
 Honest - Act In Good Faith and Be Fair
• Strained by Party Appointed System?
 Be Diligent and Objective
• Actually read and understand briefs – seems obvious, but….?
• Can you really be objective?
 Influence By Outside Pressure, Fear of Criticism,
Self-Interest
• Fear of disappointing?
• Fear of (not getting) another appointment?
ROLE OF ARBITRATOR: THEORY
 ARIAS Code of Conduct , Canon II – 2
. . . . Although party-appointed arbitrators may be initially
predisposed toward the position of the party who appointed
them….. they should avoid reaching a judgment on any
issue, whether procedural or substantive, until after both
parties have had a full and fair opportunity to present their
respective positions and the panel has fully deliberated on
the issues
ROLE OF ARBITRATOR: PRACTICE
 Initially Predisposed, But What Then?
• Personal baggage – how far?
• Becoming invested in case
• Ignore other side?
BACKGROUNDS OF ARBITRATORS
 Underwriter / Broker - 20%
 Claims / Run Off - 30%
 Inhouse Counsel - 25%
 Outside Counsel - 15%
 All Other - 15%
(D. Thirkill Statistical Study - 12/31/2014)
ROLE OF ARBITRATOR: THEORY
 ARIAS Code of Conduct , Canon III– Comment 3
(arbitrators) have a responsibility to be familiar with the practices
and procedures customarily used in arbitration …
 ARIAS Code of Conduct , Canon V – Comment 2
. . . arbitrators may communicate with the party appointing them .
. . may also communicate about the merits of the case . . . until the
date determined for the cessation of ex parte communications.
 ARIAS Code of Conduct , Canon V – Comment 6
. . . may make suggestions (about) issues not being clearly
presented; what arguments or aspects of argument in the case to
emphasize; how an issue might be viewed by the Panel . . . .
ROLE OF ARBITRATOR: PRACTICE
 Ex Parte Communications
• Can Be Positive
o Why for / against any particular issue
o Provide counsel with helpful insights
o Educate YOU on an issue (if outside personal experience)
• Can Be Negative
o
o
o
o
Undue Pressure from some counsel – win at all cost
Become “unfair” – how far is too far?
Encourages personal investment in outcome
You might give “mis”-information
ROLE OF ARBITRATOR: PRACTICE
 Self-Examination
 What do YOU think is YOUR role?
 How far will YOU go to support party appointing you?
 Are YOU just an advocate for the party appointing you?
 Should YOU care how others see you?
EFFECTIVENESS
 What to do before OM / Motions / Hearings
• Thoroughly Understand Issues:
o Examine your own experience
o Recall prior arbitrations
o Utilize available resources –
ARIAS website
Internet
Peers (do you have a ‘rabbi’?)
RESOURCES – DISCOVERY EXAMPLE
 Beyond the Discretion of the Arbitrator , by C.
Moxley (ARIAS Quarterly, 1st Quarter 2009)
“This standard for discovery is far narrower than that applicable in
court cases. Parties in arbitration are generally not entitled to discovery
of ALL evidence ‘reasonably calculated to lead to the discovery of
admissible evidence’ or even of all evidence relevant to the dispute.
Arbitration is intended to avoid the unbridled discovery of litigation.
Yet the requirements of expedition and economy in arbitration are
subject to the overriding right of a party to have a fair opportunity to
prepare and present its claims or defenses. Arbitrations need to be
done expeditiously, but they also need to be done right. The objectives
of expedition and economy are to be pursued in light of the reasonable
discovery needs of the case.”
RESOURCES – DEPOSITION EXAMPLE
 Beyond the Discretion of the Arbitrator , by T.
Newman (ARIAS Quarterly, 4th Quarter 2002)
“Section 7 of the FAA empowers arbitrators to summon witnesses
‘to attend before them’ and to bring ‘any book, record, document
or paper which may be deemed material.’
Frequently, key players in the reinsurance transaction (e.g.,
brokers, intermediaries, underwriting agents) are not signatories
to the slip or final contract. Yet the evidence of such non-parties . . .
may be crucial to the fair resolution of the dispute. It has been held
that their evidence can be obtained under the authority granted
arbitrators by the FAA which ‘permits pre-hearing appearances by
non-party witnesses for deposition and production of
documents.’”*
WHAT HAPPENS AT MEETINGS?
 Extensive Briefing
 Lawyers Make Arguments
 Witnesses Examined & Crossed (at Hearing)
 Panel Asks Questions
 Panel Deliberates
WHAT DO YOU DO?
 Briefing
• Read briefs and attachments carefully
• Determine how much weight to give
depositions/citations
• Perhaps discuss with panel members
WHAT DO YOU DO?
 Arguments (Openings / Closings)
• Listen carefully
• Make notes
• Try not to interrupt (it’s rude)
Arbitrators may question fact witnesses or experts during the
hearing for explanation and clarification to help them
understand and assess the testimony; however, arbitrators
should refrain from assuming an advocacy role and should
avoid interrupting counsel’s examination unless clarification is
essential at the time
WHAT DO YOU DO?
 Questions of Witness
•
Talk with umpire about when / how to question
• Avoid “testifying”
• Avoid being “aggressive” (or do so very ‘politely’)
ARIAS Practical Guide VII - Arbitrators may question fact
witnesses or experts during the hearing for explanation and
clarification to help them understand and assess the testimony.
WHAT DO YOU DO?
 Questions Generally
•
How to ask questions of counsel
•
Try not to ‘impress’ party appointing you (it can backfire!)
•
Think about effect on umpire
ARIAS Practical Guide VII - . . . arbitrators should refrain from
assuming an advocacy role and should avoid interrupting counsel’s
examination unless clarification is essential at the time.
MOST IMPORTANT
 Relationship With Umpire (Understand and Obey!)
 Thoroughly Understand Issues and Arguments
 Effective Communication (how / when to concede)
 Coping With A Weak Case
SCENARIOS – BEST CASE
 Evidence and Facts Confirm Initial Outline Position
 You Totally Support and Believe In That Position
(It’s OK to advocate for a position)
 Open-Minded Umpire AGREES With You
SCENARIOS – AWKWARD SITUATION
 Evidence and Facts NOT PER Initial Position
 You Cannot Support Resultant Position
(Try as you might…)
 Umpire Very Skeptical
 Other Arbitrator DEMANDING Fees and Costs
Disclosures and Record-Keeping
James Sporleder
ARIAS•U.S. Certified Arbitrator
DISCLOSURES AND RECORD-KEEPING
Introduction
 Today’s Purpose: To help new arbitrators prepare for
the business side of being an arbitrator
 Two Major Components of “The Business”
1. Record Keeping
2. Disclosures re: relationships
 New ARIAS•U.S. Arbitrators’ Committee
• Had been a “missing” component for independent
arbitrators
THE NEW ARBITRATORS COMMITTEE
 History
 Purpose
 Presence at the ARIAS•U.S. Fall Conference
• Ethics Workshop
• Practice Workshop
RECORD-KEEPING AS AN
INDEPENDENT ARBITRATOR
 My Personal Story
 ARIAS•U.S. Quarterly
 Arbitrators’ “Toolkit” (See Exhibit A)
 Chronological Listing of Cases
 A Billing System
DISCLOSURES
 Party-Arbitrators’ Disclosure
 Umpire Disclosure – How Extensive?
 My Personal Disclosure Philosophy
ARBITRATOR DISCLOSURES
 Different Procedures – party-arbitrator v. umpire
 Concept – tell parties if there are any apparent
concerns about arbitration bias
 Arbitrator Relates Relationship With…
•
•
•
•
Parties, counsel, in-house counsel, company rep(s), TPAs
Experts, consultants, witnesses
Issue conflicts
Other arbitrators
ARBITRATOR DISCLOSURES
 Generally, more information is better than less.
• over disclose
• cases protect the arbitrator who discloses
 If Some Relationship Presents Too Much Bias, DO
NOT TAKE THE ARBITRATOR ASSIGNMENT.
ARBITRATOR DISCLOSURES
 Study the ARIAS Code of Conduct
•
“Must” vs. “May”
•
No ethics regulator to censure
•
Sometimes difficult decision to take assignment
•
Best advice – ask other experienced arbitrators
•
Sometimes no “right” answer
•
Can you be fair to both parties?
•
Appearance of impropriety
UMPIRE DISCLOSURES
 Critical- Keep Chrono Listing of Cases
 Usually Starts With Umpire Questionnaire (Exhibit C)
 Save All Your Questionnaire Answers
 If Selected As Umpire – Keep Questionnaire In Case File
 Next Time of Disclosure – At the OM
UMPIRE DISCLOSURES
 Best advice.......
•
Write out your disclosures and read them into the
record at the organizational meeting.
•
Some umpires refer to previous arbitrator
questionnaire.
•
Remember, you have duty to update if there is new
disclosure information, until case is resolved.
•
Often difficult to remember to update
•
Hint: After every new arbitrator assignment, think
about disclosure on previous assignments.
•
If in doubt, disclose- even if beyond period of request.
PARTY-ARBITRATOR DISCLOSURES
 No Disclosure Until OM
 Advice: Write Out Your Disclosure and Read Into
the Record (or Supply Copy Beforehand).
 Party Arbitrator Is Not Technically “Neutral”
 May Have Greater Party/Counsel Relationships
 Advocate v. Neutral
PARTY-ARBITRATOR DISCLOSURES
 Party Arbitrator May Have “Ex Parte”
Conversations with Appointing Counsel – With
Some Limitations
 Party Arbitrator Can Give Advice to Counsel, but
NEVER, EVER GUARANTEE Your Final Vote As
Panel Member
 At End of Day – Party Arbitrator Must Be
“neutral” and Vote Your Conscience
 Make Sure Party Knows Your Fee At Time of
Appointment.
MISCELLANEOUS DISCLOSURES
 If your are accepting an assignment, make sure you qualify to
be an arbitrator under the arbitration clause. Also make
sure your have the “competence” to hear the case.
 Ask to see the contract/arbitration clause and the original
arbitration demand and any applicable counter-demands.
 What ethical/disclosure issues occur when another
arbitration is consolidated into your arbitration?
MISCELLANEOUS DISCLOSURES
 New – ARIAS Neutral Arbitrator Designation
 Maintain Your Disclosures Even After Destroying
Arbitration File.
 Remember – Ethics and Disclosure Go Hand-InHand.
RECORD-KEEPING:
THIS IS A BUSINESS!
 Consult with your legal, tax, and financial advisors
• Should you operate as a sole proprietorship? LLC? Corporation?
• Understand the legal, tax, accounting and record keeping pros and
cons of the options available
 Do you want to name your business?
 Do you need insurance?
• Commercial and/or professional liability
• Is the hold harmless agreement enough?
• Do you want to make acceptance of appointment contingent upon a
satisfactory hold harmless agreement?
RECORD-KEEPING:
ESSENTIAL EQUIPMENT AND SKILLS
 The Bare Minimum
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•
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•
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Computer (with anti-virus and security)
High speed internet access
Ability to receive and send emails
Ability to receive (and open) and send documents (Word, Excel,
Adobe/PDF) via email
Ability to create documents (e.g., orders/awards), convert to PDF, email
Phone/Conference call capability (free services are available)
Scanner (and/or fax)
Calendar system or method
Time keeping system
Arbitration log system
RECORD-KEEPING:
ESSENTIAL EQUIPMENT AND SKILLS
 Helpful to Have
• Smart phone to keep in touch (voice and data) when you are on the
road
• Basic word processing skills to aid in drafting orders and awards
• Basic Excel skills to aid in record keeping (time keeping; arb log)
 Additional Tools to Consider
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•
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Accounting software
LiveNotes
Litigation management software
Industry and subject matter websites
RECORD-KEEPING:
CONFLICTS/ARBITRATION LOG
 Disclosure obligations will require you to keep a record of relevant
information and relationships for future disclosures, responses to
umpire questionnaires and conflicts checks
 Decide what information to record – reference vs. disclosure
 At a minimum…
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Parties (including parent groups)
Lawyers (individuals, law firms, in-house counsel)
Other panelists
Appointment date
Disposition mode (e.g., settlement, final award)
Disposition date
Your role (party appointed vs. umpire)
TPA
RECORD-KEEPING:
CONFLICTS/ARBITRATION LOG
 Additional Options…
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•
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Witnesses
Arbitration status (e.g., those used in ARIAS arbitrator profiles)
Type of dispute/controversy
Amount in dispute
Whether appointed by cedant/reinsurer, policyholder/insurer
 Decide how to record this information
•
•
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Searchable spreadsheet
Handwritten log
Conflicts database
RECORD-KEEPING:
GETTING PAID, BEING CLEAR
 Considerations
• You should establish an early understanding on at least
these items:
o Hourly rate (including rate increases)
o Retainers/minimum fees (refundable or not, when applied)
o Expenses to be charged
o Billing cycle and requested payment interval
o Whether bills are to be submitted to counsel or party for payment
RECORD-KEEPING:
GETTING PAID, BEING CLEAR
 Other considerations
•
•
•
•
Pre-hearing deposits
Cancellation penalties/fees
Right to suspend or withdraw for non payment
Whether or not to request a signed acknowledgement /retention letter
 Memorialize these in a detailed statement of fees and
billing practices
•
Provide this at the time of retention/appointment
RECORD-KEEPING:
GETTING PAID, BEING CLEAR
 Billing practices
• Parties are entitled to know how much time you have incurred and
generally for what services
• Keep contemporaneous record of time incurred
• Invoices should describe in general or by day the services rendered
(without notation of result or panel decision-making, etc.)
• Expenses should be tracked with suitable documentary support
o Some parties require submission of expense detail with receipts to
process invoices
o Some arbitrators routinely submit expense support with invoices
whether specifically requested or not.
• Follow up after a reasonable interval on unpaid bills with your agreed
contact
RECORD-KEEPING
 Decide whether to maintain arbitration records post arbitration
• You may want to keep records if the Final Award is appealed
 Record destruction should be done consistently with the
confidentiality of the proceedings (shred or return paper copies
to the parties for proper destruction)
 Consult with tax and financial professionals regarding
maintenance of billing records
 Maintain certain records indefinitely (indemnification
agreement)
EXHIBITS
Exhibit A – ARIAS Quarterly “Toolkit” publication
Exhibit B – ARIAS U.S. Code of Conduct
Exhibit C – ARIAS Sample Umpire Questionnaire
Effective Service As An
Arbitrator – Part Two
Dale Crawford
ARIAS•U.S. Certified Arbitrator
STAGES OF AN ARBITRATION
 Non-neutral--Appointment; selection of umpire
 Neutral-Appointment of the panel
 Organizational Meeting
 Discovery; motions, depositions,
 Pre hearing briefs
 Hearing
 Award
APPOINTMENT – NON-NEUTRAL
 Arbitrator may work with appointing party to
assist in development of the case, yet decide issues
on the merits
– ARIAS Code of Conduct, Canon II, “Arbitrators
should…advise the party that they will decide issues
objectively. “
– ARIAS Code of Conduct, Canon V, “An arbitrator
should not review any document that the appointing
party is not willing to provide to the opposition
 Suggest potential umpire candidates
NON-NEUTRAL ARBITRATOR
 May communicate with appointing party as long
as agreed to by the panel
 When permitted, may make suggestions to the
party with respect to usefulness of evidence and
suggestions about arguments and aspects of the
case
 Should not edit briefs, interview, or prepare
witnesses
• ARIAS Code of Conduct, Canon VI, Communication
With the Parties
APPOINTMENT – NEUTRAL
 Should not have contact only with one party; if
so, should be disclosed to other panel members
 Same rules for disclosure, lack of financial
interest, and other requirements apply, just as for
party-appointed
NEUTRAL ARBITRATOR
 Arbitrators and umpire are appointed
simultaneously
 All communications are with both parties
 No ex parte contact
BEFORE THE ORG MEETING
 Umpire should arrange conference call with
panel for preliminary items
 Arbitrators should suggest items for OM and
assist in setting place, time, and agenda
 Panel should present agenda and request counsel
confer and decide on as many issues as possible
prior to OM
ISSUES TO BE RESOLVED AT THE OM
 Disclosures By Panel Members
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Prior Service involving the parties
Arbitration and Expert Testimony
Current involvement
Prior and Current involvement with counsel
Relationships with counsel or parties
Anything beyond social-example; ARIAS
Conferences
ISSUES TO BE RESOLVED AT THE OM
 Hold Harmless Agreements
•
Should be agreed upon and prepared before the OM
•
ARIAS standard forms are customary; others should
be presented and agreed upon prior to the OM
•
Execute and distribute during the OM
ISSUES TO BE RESOLVED AT THE OM
 Schedule
•
Dates for document requests; completion of
document production
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Identification of witnesses
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Exchange of expert reports
•
Completion of discovery
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Ex Parte communication cutoff
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Pre-hearing briefs
•
Location and length of hearing
ISSUES TO BE RESOLVED AT THE OM
 Procedures for Motions
•
Dates for response briefs
•
Dates for reply to response
•
Ex parte communication during pendency of
motions
BEFORE THE HEARING
 Must be available to respond to questions, Motions, any
administrative items
 Review all pre-hearing material
 Resolve all issues with emphasis on expediency and to
prevent abuse of the process
• ARIAS Code of Conduct, Canon VII, Advancing the Arbitral
Process
 Block off sufficient time for hearing, and anticipate delays
THE HEARING
 Be prepared-have reviewed all material
 Participate-appropriately
•
ARIAS Code of Conduct, Canon VII-Arbitrators may
question…witnesses to help them understand and assess
testimony…should refrain from assuming an advocacy role
 Do not exceed authority or do less than is required to
exercise that authority completely
 Deliberate fairly and justly decide all issues submitted,
and decide no other issues
• ARIAS Code of Conduct, Canon VIII
AFTER THE HEARING
 Arbitrators shall not inform anyone of a decision until
given to all parties
 May not assist a party in post-arbitral proceedings, except
as required by law
 Shall not disclose contents of the deliberations
 May issue a dissent on the record
• ARIAS Code of Conduct, Canon VI
Feedback / Q&A
Charles W. Fortune
Seiger Gfeller Laurie LLP
ARIAS•U.S. Education Committee
Slides
• A complete set of these slides will be emailed to all
participants tomorrow.
• You will need to have the Microsoft PowerPoint
application to view them.
• If you print any pages, be sure to adjust the settings to
Grayscale to remove the background.