Partisan Arbitrators

A common way to compose an arbitration panel is for each party to select an arbitrator, then those two select the third arbitrator. The arbitrators selected by the parties may be neutral, or partisan. Marty Weisman, a respected Michigan attorney and arbitrator, has written about the challenges associated with party-appointed arbitrators (e.g., in an article for this year’s Michigan’s Advanced Negotiation And Dispute Resolution Institute [ANDRI]). Marty points out that, if the selected arbitrators are partisan (non-neutral), they may act as advocates for the party who selected them. They end up canceling each other out, and the neutral arbitrator is the one who decides the case—so parties would’ve saved time and expense by simply choosing one neutral arbitrator. Even if the party-selected arbitrators are designated as “neutral,” they still struggle between their need to be impartial and their inherent (even subconscious) bias in favor of the party who chose them. Thus, Marty recommends one neutral arbitrator instead of a panel that includes party-appointed arbitrators.
I experienced this tension in an arbitration I did recently. I was a party-selected arbitrator, designated as partisan, yet encouraged to be fair and just. Our neutral arbitrator was a respected former judge. Not being a litigator, I saw myself as an advocate for justice as much as I was an advocate for the party who selected me. In our deliberations, the three of us fairly quickly agreed on a resolution, which was a confirmation to me that we had reached a just result.
After our decision was announced, however, the party who selected me expressed her disappointment with the award, implying that I had not advocated enough on her behalf. I see this as yet another disadvantage of party-selected arbitrators: the losing party is unhappy, not only with the outcome, but also with their choice of arbitrator. The party might also feel this if there were only one arbitrator, but it would not be the same sense of betrayal as when the party has selected an arbitrator who ends up “letting them down.”
I have done arbitrations for years, but usually solo, not as part of a panel. I thought this was a positive experience, until I learned “my” party’s dissatisfaction. Now I am left to wonder, if another party-selected arbitrator appointment comes my way, should I refuse?

2 Comments

  1. Posted August 17, 2010 at 4:53 pm | Permalink

    Anne..congratulations for being inaugurated into the world of party appointed arbitrators. If the three arbitrator panels are all independently chosen ( i.e. from the AAA or JAMS list ) or as a result of the agreement between all parties, and the arbitrators are all neutral, there should be no problem serving. I now advise those who want to select me as a party appointed arbitrator that I will not do it unless they acknowledge ( if its a private arbitration) in writing that I will be totally neutral and I will not be an advocate for their position but will ” call it as I see it”. I also do not want the payment for my services to come from the party who appointed me, but rather that it is shared in accordance with the parties agreement or pooled with all arbitrators compensation so that I would not feel beholden to the party who pays. If the appointment is thru an organization such as AAA, I confirm in the initial disclosures that the organization require my neutrality, etc and they take care of the fees . If that is not to their liking, I advise them they should seek someone else. The worse part of a three panel, party appointed procedure is that it adds unnecessary expense to the process, since it really comes down to the decision of the neutral.

  2. Posted August 17, 2010 at 4:53 pm | Permalink

    Anne..congratulations for being inaugurated into the world of party appointed arbitrators. If the three arbitrator panels are all independently chosen ( i.e. from the AAA or JAMS list ) or as a result of the agreement between all parties, and the arbitrators are all neutral, there should be no problem serving. I now advise those who want to select me as a party appointed arbitrator that I will not do it unless they acknowledge ( if its a private arbitration) in writing that I will be totally neutral and I will not be an advocate for their position but will ” call it as I see it”. I also do not want the payment for my services to come from the party who appointed me, but rather that it is shared in accordance with the parties agreement or pooled with all arbitrators compensation so that I would not feel beholden to the party who pays. If the appointment is thru an organization such as AAA, I confirm in the initial disclosures that the organization require my neutrality, etc and they take care of the fees . If that is not to their liking, I advise them they should seek someone else. The worse part of a three panel, party appointed procedure is that it adds unnecessary expense to the process, since it really comes down to the decision of the neutral.

Follow

Get every new post on this blog delivered to your Inbox.

Join other followers: