June 25, 2014

Some Thoughts On Improving the Arbitrator Vetting Process

All of you who have not heard or read about publication of commercial arbitration awards in the last six months, please raise your hands. …. I see just one or two hands, all the way in the back of the classroom.  Yes, this seems to be a hot topic.

An important element of the multi-faceted conversation about publication of awards (and other arbitral decisions) concerns whether the arbitrator(s) who authored the awards should be identified in the publication. Let’s call that Identity Transparency.  An argument in favor of Identity Transparency is that parties will make more intelligent selections of arbitrators, and have fewer regrets later on, if their counsel have studied and graded the candidates’ awards.  It is also supposed that some relative neophytes in the arbitrator ranks will see their stock rise on the strength of their few but masterfully-crafted awards, elbowing aside some usual suspects and inducing other regulars to apply more effort to their writing.

I am not so sure. Now, I realize you have enough negativity in your daily professional diet without an additional serving from my kitchen. But consider.  Without insight into the record presented to the Tribunal, one can only estimate whether the facts and the law as presented by the parties were thoughtfully and fairly assimilated by the Tribunal, whose elegance of presentation may conceal a fundamental lack of appreciation. Also, it is not uncommon for Tribunals to require counsel to submit their memorials and witness statements in Word or other adaptable format, the better to copy and paste into the award the submissions the Tribunal finds persuasive. And then there is the question of how the text of the award evolved, especially in a three-member Tribunal, with or without a Tribunal Secretary employed by the Chair or associated with his or her law firm.

Identity Transparency is a good thing, subject to its limitations. But it is not a singular cure for the ailments afflicting the arbitrator vetting process. And its limitations have led me to think about whether there are other medications, not yet widely prescribed, to treat the same symptoms more effectively. Here is one: Counsel Transparency.

Specifically, let us consider whether arbitral institutions that employ a list procedure should systematically disseminate, along with the curriculae vitae of the listed candidates, a list of the counsel who have appeared before the candidate in completed (not pending) arbitrations within the last 3-5 years. Arbitrators could be required, as a condition of maintaining a place on the institution’s roster, to maintain an updated counsel list on file with the institution. And the institution could expressly reserve the right to distribute counsel information for cases handled by that arbitrator under that institution’s auspices and that the arbitrator had neglected to list.

The benefits of such a system are obvious. The question is what are its flaws? Are there problems with such an arrangement that have caused institutions to consider and reject it? Or is this simply an idea whose time has not yet come? I suppose institutions may fear that they would be facilitators for violations of the confidentiality of past arbitrations. But this does not seem to be justified; the duty remains on counsel to keep confidential the parties and the particulars of past arbitrations unless there was an agreement to the contrary or the arbitration was not confidential as a matter of law. Would counsel object that they are thrust into a position of having to provide comments in situations where they would prefer not to do so, or by declining to comment be seen as suggesting a negative evaluation of the arbitrator under discussion? I believe most counsel would respond that they could adequately explain a situation where they would prefer not to comment, and that they would prefer to reap the benefits to their present and future clients of having better insights into the behavior of arbitrators they are considering for appointment. We might also ask whether an arbitrator violates the confidentiality of a completed prior arbitration by reporting to an institution, without any other case-identifying information, the names of counsel that appeared before him or her? The answer to this, I believe, is that once institutional rules are in place that require such reporting, no credible accusation of a breach of confidentiality could be made, and arbitrators for their further protection in this regard could simply call counsel’s attention to the reporting obligation imposed by the rule.

Is this a useful potential innovation? Is a version of it in use anywhere?  Reader comments are invited.

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