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Confidentiality of the proceedings - What are your thoughts?

You are a panel member and a member of the Bar in good standing in a pending arbitration with the following facts. Subcontractor files a claim for contract balance due regarding the construction of a bridge which is heavily traveled on a regular basis. One of the panelists is a licensed professional engineer and states in caucus that having heard the evidence, in her professional opinion the bridge will collapse within the year. The other panel members are lawyers experienced in construction but neither have an engineering degree. The Panel reconvenes and raises the safety issue. Counsel for each of the parties respond that the safety issue is not before the Panel and that they initiated the arbitration process to preserve the confidentiality of the proceedings. What should the Panel do?

Please provide your thoughts/comments below.

Comments (6)

Judge Gerald Harris:

This would seem to be akin to the dilemma an attorney faces when she learns of an impending crime in the course of privileged conversations with a client. The law is clear that the attorney should, and is permitted, to act to prevent the harm. Here, the Panel should alert the appropriate governmental agency to the danger posed to the public.

Deanne Wilson:

Depends on which set of arb rules or which Rules of Professional Conduct are operative. Most say that an exception to confidentiality occurs when the arbitrator or attorney reasonably believes that substantial bodily injury to a party or a third party is imminent. I believe that in any event, the negative consequences in this case are so dire, the arbitrator/attorney has an obligation to make further inquiry as to the engineer-arbitrator's opinion. Once a "reasonable belief" has been derived from the information uncovered, the arbitrator/attorney may have an obligation (depending upon which rules are operative) to act upon it by informing the proper authority. The arbitrator may also attempt to educate the parties as to what he/she perceives his obligations to be, thus giving the parties an opportunity to embark upon some remedial or investigative path of their own. Either way, most arbitrators and attorneys would most probably find it morally impossible to ignore the situation, would investigate it and report it to a proper authority.

This sounds like the anecdote Gene Farber uses when he gives his ethics lectures. My two cents: as one who used to drive across the subject bridge twice a day and saw it closed and rebuilt, I’m grateful for his and his colleagues decision to disclose. Under the model rules and the rules of my state, heath and safety trump confidentiality. In such circumstances disclosure is both honorable AND ethical.

Mike Lampert:

Since this is most in the field of the nonlawyer, (the lawyers relying on her opinion) is it a panel decision or her decision based on the forum's rules and her engineering ethics? At least in the first instance?

Kevin Callahan:

Arbitration proceedings are not indefinitely confidential. At the conclusion of arbitration proceedings, the losing party can challenge the award in court while the prevailing party can seek court confirmation of the award. During these court proceedings, the confidentiality that the parties agreed to prior to the arbitration proceedings can be undone. While the parties can seek to seal the arbitration records, a court will balance the expectation of privacy belonging to the parties in arbitration with the general presumption favoring public access to court proceedings. At least one New York court has found that parties in arbitration should not assume that their agreement to confidentiality during arbitration proceedings will remain intact during court proceedings to determine the validity of an arbitration award. When the dispute involves risk to public health or safety, the interest in public access to the information is far greater.

In light of the above, I might try to compel counsel for each of the parties to disclose the safety issue to the proper authorities themselves. As a neutral arbitrator I would advise them that given the safety issue involved, it would likely become public information following post-arbitration court proceedings anyway. Additionally, I would argue that the safety issue can be appropriately disclosed as an exception to the confidentiality rule under the ABA's Model Rules of Professional Conduct. The exception permits disclosure necessary to prevent death or substantial harm reasonably certain to occur.

Firooz Israel:

As an arbitrator and a structural engineer, I wonder how anyone can determine the efficacy of a bridge and that "the bridge will collapse within the year" just from "hearing the evidence". Barring a rigorous analysis of the loading conditions of the bridge, the matter in question should be brought up by the panel to the attention of the parties for action by the design engineer of the bridge. This action should be done urgently in parallel to the arbitration proceeding. While the concern of the panel member should not be ignored as a matter of ethics, neither should it be considered as definitive determination..

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