Marc J. Goldstein Arbitrator & Mediator NYC
August 28, 2013

The Arbitrator’s Power of Suggestion

One of the least discussed powers of the Arbitral Tribunal is the power of suggestion.

Professor Piero Bernardini, a well-reputed continental arbitrator and scholar, has described the arbitrator’s task in achieving an efficient process as “a balance between ‘proactive and judicious efforts’ to move proceedings forward in an efficient manner while at the same time ensuring respect for party autonomy and equality.” Volumes have been written about arbitral efficiency and party autonomy but rather little about how these themes are harmonized in the day-by-day practice of the craft of arbitrating.

One of the presumed character differences between the judge and the arbitrator is that the former as an officer of the state may carry on imperiously while the latter as an agent of the parties should proceed collaboratively whenever possible. V.V. (“Johnny”) Veeder has summarized this distinction with the observation that the arbitrator “is the master of the arbitration but not the parties’ master.”

And yet surveys of corporate users of arbitration report widespread dissatisfaction with the arbitral process and a shift in preference toward the courts (at least where the courts are familiar and close to home). And US parties and counsel are not alone in clamoring for the appointment of ex-judges as arbitrators.

Does this mean the arbitration users would actually prefer more imperium from their arbitrators? Perhaps not precisely so. But it may very well be the case that what parties to complex, contentious, and high-value disputes really want (not to mention need) most of all are innovative procedural solutions, that they are encouraged to adopt, that invite efficiency gains without material sacrifice in the scope of evidence-gathering or the presentation of legal positions.

And that is where the arbitrator’s power of suggestion can and in appropriate circumstances should come into play. One of the heralded virtues of arbitration is the supposed flexibility of the procedure. But the source of that flexibility will rarely be the parties. Often the parties have counsel more accustomed to judicial proceedings and predisposed toward importing judicial notions of orderly procedure into the arbitral process (and not only in regard to pre-hearing discovery, although this import receives the most attention).

And yet if those court-oriented litigators, acting with the presumed consent of their clients, have selected vastly-experienced specialists in arbitration to preside over their case, there must be a reason that they have done so. And a good candidate for that reason is that the parties actually want guidance through the arbitral process from experts in arbitral procedure whose specialty is harmonizing efficiency, fairness, and party autonomy.

Arbitrators are not the masters of the parties but the parties are the masters of the procedure only to the extent that they are clearly (and resolutely) in agreement. But the arbitral tribunal wielding the power of suggestion may lay the foundation for party agreement on a variety of issues, steering away from poorly conceived agreed solutions, and providing a rallying point toward which the parties might migrate when the chances of their reaching an agreed solution without arbitral input are not great.  In other circumstances, the tribunal detecting an intractable difference might invite the parties to reach agreement on a matter or else submit their respective proposed solutions within a finite time frame. This is the exercise of the power of suggestion in another form: to hasten (but not “rush”) the parties toward agreement or at least constructive solution-driven, thinking.

In some cases the advocates are accomplished and reputed arbitration specialists who can be relied upon to advance effective solutions that the client is willing to accept. And where that is so the arbitrator’s power of suggestion should be invoked more reluctantly. But even then, the role of advocate has a curious tendency to channel the thinking of experienced hybrid arbitrator-advocates toward zero-sum solutions.

So, if the question “Whose Arbitration Is It Anyway?” must inevitably be answered “Yes, it is the parties’ arbitration,” still each arbitrator might usefully consider from the outset “What is the Arbitration the parties want?” The prudent exercise of the power of suggestion will often be a valuable way to have that question answered, and perhaps answered in a fashion that draws in the parties to an efficient procedure they would not achieve on their own.

Leave a Reply