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Litigation & Arbitration,
Ethics/Professional Responsibility

Apr. 28, 2022

The most important question

Intelligence, of course, is power, which in the choosing of arbitrators, comes down to intelligence ethically obtained - especially because, when I last checked, there were no tarot cards or crystals available online to select arbitrators or interpret their reactions during the course of a hearing.

Fred Bennett

Email: fredgbennettADR@outlook.com

Fred is an experienced international and domestic arbitrator and mediator. He is a fellow with the College of Commercial Arbitrators, member of the National Academy of Distinguished Neutrals and the ICC Commission, and former head of arbitration at Quinn Emanuel and Gibson Dunn.

First, a confession. More than once, while cruising down the street, I’ve noticed a small storefront called Psychic Readings or something similar and wondered to myself, “How can anyone make a living doing something like that?” But truth be told, I’ve done just about the same thing, albeit without the benefit of tarot cards or crystals.

As an advocate in arbitration, I’ve noticed myself, along with everyone else on my legal team, trying to perform cosmic interpretations of what the arbitrators are thinking, and haven’t the slightest doubt that the worthy opposition is engaging in the same exercise. Many times at our end-of-day caucuses, recalling the day’s events at a hearing, someone would comment on a (purportedly) telling insight that he/she had interpolated from an arbitrator’s reactions to the general demeanor or credibility of a witness, a specific answer to a question, a document, an argument, or anything else that seemed a touch out of the ordinary. Looking back, it was simply astonishing how eagerly we sometimes grabbed hold of the tea leaves to decipher how a smile, a frown, a furtive glance, a nod of the head, a particular question, an inflection in the voice, or a host of other things had given us a peak into what an arbitrator was thinking. Of course, it was all pure guesswork, but intriguing enough to keep doing it, at least until we discovered that a few of our so-called insights had been completely off the mark.

This kind of exercise will no doubt continue in arbitrations until the end of time. Good advocates will not take it too seriously, but the fact that the exercise occurs at all is, indirectly, a reflection of the most important question one can ask in any arbitration: Who is the best arbitrator for my case?

When the practice of arbitration was still evolving into the sophisticated animal it is today, there essentially were two sources of intelligence for picking an arbitrator: First, the arbitrator candidate’s written resume (which of course paints every arbitrator in a sensationally flattering light); and second, news of the reputation of the arbitrator candidate on the street, typically in the form of an e-mail to other lawyers in one’s firm, inquiring as to any experience, good or bad, with the arbitrator in a past case. But happily, in today’s arbitration world, arbitration rules and ethical canons give parties guidance for ethically obtaining additional information about an arbitrator candidate – not just from a resume or another lawyer’s experience, but directly from the candidate.

Intelligence from party arbitrator candidates

It is quite common, especially in large cases, for the arbitration clause to provide that each party will have the right to choose a designated party arbitrator, and those two arbitrators will then have a chance to agree on a chair for the arbitration panel, failing which the governing arbitration institution, or sometimes a court, will make the choice. Arbitration rules, some of very recent vintage, extend to parties the right to speak ex parte with these arbitrator candidates on limited topics. For example, Art. 14.6 of the American Arbitration Association’s ICDR Rules provides that the parties are to have no ex parte communication with party arbitrator candidates except “to advise the candidate of the general nature of the controversy and of the anticipated proceeding, and to discuss the candidate’s qualifications, availability or impartiality and independence in relation to the parties, and to discuss the suitability of the candidates for selection as a presiding arbitrator where the parties or party-appointed arbitrators are to participate in the process.” Similarly, JAMS Rule 14, entitled “ex parte communications,” states that “a party may have ex parte communications with its appointed neutral or non-neutral party arbitrator as necessary to secure the arbitrator services, and to ensure the absence of conflict, as well as in connection with appointing the chairperson of the arbitration panel.”

The window of opportunity is indeed narrow. Once the party arbitrator has officially been appointed, the ex parte communication rules stiffen. AAA Canon of Ethics III allows ex parte communication with an appointed party arbitrator only in connection with setting the time and place of the hearing or making other arrangements for conduct of the proceeding,” but only on condition that the arbitrator inform the other parties of the ex parte discussion. JAMS Canon VI, similarly, makes clear that any appointed arbitrator “cannot discuss a case with any party in the absence of any other party.” These ethical standards are also reflected in the 2022 California Rules of Court, pertaining to ethical standards for neutral arbitrators in contractual arbitrations in California subject to the California Arbitration Act (CCP 1280 et seq,), which allows appointed arbitrators to have ex parte communications with any party about “administrative matters, such as setting the time or place of a hearing or making other arrangements for the conduct of the proceeding, as long as the arbitrator reasonably believes that the communication will not result in a procedural or tactical advantage for any party,” – but again on the condition that the arbitrator must promptly inform all other parties of the communication and give them the right to respond.

So, in the real world (we are now leaving the psychic world) what do these rules actually allow? Generally speaking, they can fairly be interpreted to allow some latitude in interviewing a party arbitrator candidate. For example, a description of the case could be diplomatically worded so as to ferret out some insights into the candidate’s views of the arbitration process generally as it relates to your case, without the candidate becoming wary that the sacred line of impartiality is being crossed. What the scope of ethical inquiry can be of course will vary with the particular case – but as an expert advocate, you no doubt will figure out the most elegant way to pose any question. It may be of more value in this column to discuss the kinds of intelligence worth coming away with from your ex parte interview of a party arbitrator candidate. Here are a few friendly suggestions:

1. Explore the type of experience the candidate has with cases like yours. The value of the candidate’s responses will depend in no small part on the way in which you describe the case. Generally speaking, arbitrator candidates respond most fully to case descriptions that the candidate believes are impartial. This doesn’t mean that your case description must be so vanilla as to be virtually useless; it may (and probably should) include explanations of some of the truly important evidence on which the case will turn. The process is pretty simple. You lay out the case, making sure that you respond to the potential arbitrator’s questions for clarification, etc., along the way and then sit back in your chair and listen to the arbitrator expound. It’s amazing the amount of information you can get from an arbitrator candidate – who wants to be appointed – waxing eloquent about his/her experience with the case as you have described it, including engaging with any details you may have highlighted.

2. Find out how the candidate would define his or her role as a party designated arbitrator. There are a number of subtopics which naturally fall under this one. First, it’s always a good idea to make the candidate comfortable by affirming that you are aware he/she must take an oath to be independent and serve impartially once the appointment is made. That having been said, the following tidbits of intelligence should readily fall within the ethical standards: i) What is the experience of the candidate in serving as a party arbitrator?; ii) How important is it to the candidate to take whatever steps necessary to ensure that he/she understands and can clearly articulate (both in deliberations and in conjunction with writing of the award) all material evidence relevant to the issues presented by all parties? (This could also give you clues as to how detail-oriented the candidate will be in evaluating the case); and iii) What is the nature of interactions on the case that the candidate would hope to have with the chair of the panel or with the other party arbitrators (Would the candidate be comfortable discussing the case with other panel members during the course of the hearing? How important does the candidate believe it is to try and achieve unanimity on all relevant decisions?)

3. Get the candidate’s suggestions for arbitration chair, including an explanation of why the candidate believes that any particular arbitrator would be a good fit. (Of course, be sure to include your own suggestions in the mix.) And be sure to find out what experience the candidate has serving on an arbitration panel with any suggested chair. (If a candidate has worked well with another arbitrator in the past, it might suggest that he/she could be persuasive – hopefully on your behalf – in deliberations.)

Like everything else in life, regrettably, there are a few landmines to avoid. Try to avoid asking about the candidate’s initial views of the strengths and weaknesses of your case as you’ve described it. And don’t put the candidate in the awkward position of trying to guess how any suggested chair of the panel, or even the other party arbitrator is likely to evaluate your case. Such questions would likely cross the line under the ethical rules and almost assuredly make a candidate uncomfortable.

Intelligence regarding candidates for panel chair

Aside from information concerning a candidate for the chair of an arbitration panel that you might glean from a party arbitrator candidate, arbitration rules across the board – domestic and international – are clear that a party is to have no ex parte communication with a chair of a panel other than as set forth in the canons of ethics cited above and similar canons from other jurisdictions and arbitral institutions.

So, what to do? Is one left with nothing more than intelligence that can come from a candidate for party arbitrator regarding a potential chair? The answer, courtesy of Porgy and Bess, is “It ain’t necessarily so.” Arbitration rules, particularly for larger cases, typically provide for an initial administrative conference with the case manager to discuss the various aspects of the case informally, possibly including ideas of potential candidates to serve as chair. The most common discussion in this context is one that emanates from the arbitration clause itself, which sometimes includes very specific requirements as to the nature and scope of experience and qualifications that the chair (or, for that matter, any arbitrator) must have to deal with a dispute falling under the clause. When the arbitration clause has such a provision, the case administrator is duty bound to insure that it is complied with, and if requested should always assure the parties that this will be done. Superbad case administrators will take this a step further, actually requesting chair candidates to describe their experience and qualifications regarding the case in writing (referencing relevant language from the arbitration clause), which will then be passed on to the parties.

The parties may also suggest that they supply the administrator with a joint list of impartial questions to explore with the candidate, even if not required by the arbitration clause. Suggested questions within ethical boundaries could include, by way of example, the following: How would the candidate, as chair, typically interact with the party arbitrators? (This can provide insights on how willing the candidate might be to collaborate with the other arbitrators to reach the best result – not always a given.) In the candidate’s mind, how important is it to achieve unanimity on important decisions, and the award itself, if at all possible? (Ditto.) Does the candidate have any particular views on the granting of interim relief or a dispositive motion? (For example, a world-renowned international arbitrator once told me that he was quite uncomfortable granting a preliminary injunction in any case, and much preferred accelerating the hearing date to determine what final injunction relief, if any, would be awarded – very nice to know if you need to preserve the status quo between the parties pending the hearing). Again, the secret is to avoid questions which, in the answering, could suggest any type of partiality by the candidate for panel chair, although this is virtually assured if the questions are submitted by the parties jointly.

Conclusion

Intelligence, of course, is power, which in the choosing of arbitrators, comes down to intelligence ethically obtained – especially because, when I last checked, there were no tarot cards or crystals available online to select arbitrators or interpret their reactions during the course of a hearing. And as a practical matter, the arbitration-picking suggestions laid out in this column aren’t exercised that often. So a solid working knowledge of how to creatively, within ethical boundaries, gather intelligence on either a party designated arbitrator candidate or a candidate for panel chair, may put you in the shadow of Captain Kirk--boldly going where you, or other lawyers you know, may not have gone before in answering the most important question an arbitration can present.

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