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Disclosures during a non-administered arbitration - What are your thoughts?

In a non-administered arbitration, how should an arbitrator handle a disclosure issue that arises during the middle of an evidentiary hearing?

Please provide your thoughts/comments below.

Comments (13)

In writing to counsel for all parties and to the other members of the tribunal.

The disclosure obligation is in my view identical in arbitration whether administered or not. The difference is not in the obligation because it is a continued obligation. The timing is also the same. The difference I see if that in administered arbitration the disclosure is made to the case manager or the body administering the arbitration. In a non-administered arbitration the disclosure is made directly to the parties and the panel simultaneously. It is then open to discussion, challenge or acceptance as the case maybe. In an administered arbitration the arbitrator is shielded by the case manager until the disclosure is completely dealt with. A disclosure does not at all mean that a challenge would ensue. It is the arbitrator's obligation and remains in place until the final disposition of the matter. We all know that when in doubt the disclosure should be made in administered or non-administered arbitration.

Deanne Wilson:

This inquiry highlights one of the many advantages of an administered arbitration. In past preliminary conferences in non-administered arbitrations, I have discussed the issue with counsel and we have usually concluded that the disclosure need be simply revealed to the parties, discussed, allowing counsel to ask additional questions, and then the arbitrator decides, unless both sides agree. Actual argument on one side or the other should not be entertained because it places one counsel or the other in the position of arguing against the independence of the arbitrator--who may actually end up deciding the case. Not a great solution but in the past it has seemed the fairest and least harmful result. I always breathe a sigh of relief at the end of an arbitration when it becomes apparent that no disclosure issue will arise that puts the award at peril.

It seems to me that non-administered arbitrations are a big risk for the arbitrator. There have been a few times when the administrator has saved me from myself when it comes to wording on awards, for example. If there is a disclosure that comes up in a non-administered arbitration, I would fall back on the rules and hope they gave me guidance.

Judge Gerald Harris:

Depends upon the nature of the issue. If there is a demonstrated need for additional discovery and good cause is shown for not having sought it earlier the arbitrator may order the additional production. If the issue involves the bad faith failure to have complied with earlier discovery demands the arbitrator might consider sanctions including the drawing of an unfavorable inference. If the question concerns the admissibility of evidence of a privileged nature the arbitrator must determine whether it should be viewed by the arbitrator or whether the parties should be instructed to contact an organization that administers arbitration in order to obtain a ruling.

Anonymous:

First, every arbitration is administered; if not by AAA or another ADR provider organization, then by the tribunal. A non-administered arbitration would be chaos. I know that the misnomer is commonly used; it needs to be corrected. Instead of "non-administered", please consider "tribunal administered".

Regarding your question, I see no difference b/w a AAA and a tribunal administered arbitration regarding disclosures.

Anonymous:

Disclosure should be treated the same by arbitrator regardless of the process. Thanks

Anonymous:

In such a case the arbitrator will be required to make the disclosure to both parties but will face the choice as to whether they want to continue in their present role or step down. If the disclosure is significant to the point that it creates an appearance of bias, therefore increasing the possibility that the decision will not be upheld, the arbitrator should consider stepping down. If the bias is insignificant and the cost to the parties of restarting arbitration with a new arbitrator would be detrimental to both parties, the arbitrator can more confidently remain in their position.

Anonymous:

I agree with the prior posts. Disclosure may be verbal initially, but should be confirmed in writing. It should be made to the parties, and to the other members of the panel, if there is a panel. If the parties need an adjournment to ponder the disclosure, a reasonable adjournment should be granted. (How long is reasonable will vary with the circumstances.) If an objection is raised, it must be dealt with promptly. This may include an adjournment to permit the objecting party to seek judicial intervention, unless the objection appears trivial. If there is no objection, then the fact of the disclosure and the lack of objection should be documented, on the hearing record if the hearing is being recorded or reported.

Anthony V. La Manna, Esq.:

Disclosures are a sine qua non for ANY professional.

NB: One would expect the AAA to indemnify any arbitrator acting professionally.

Michael G Mehary:

While arbitration should be as streamlined and economical as possible, err on the side of disclosure.

David Daniels:

The arbitrator could make the disclosure to the parties, ask that the parties not immediately respond and give them an opportunity to discuss the issue among themselves (outside the hearing of the arbitrator) to determine whether either party has an objection. If this discussion among the parties gives rise to questions for the arbitrator about the disclosure, these questions could be posed to the arbitrator in writing without disclosing which party asked which questions. This would minimize concerns about arbitrator bias arising from this disclosure process.

If, following this process, either party continues to have concerns arising from the disclosure, then such concerns could be presented to the arbitrator for his or her consideration. The arbitrator could then decide either to disqualify himself or herself or stay on the case.

Another possibility would be for the parties to appoint a special arbitrator for sole purpose of deciding the disqualification issue.

This would be a good issue for the parties to discuss at the outset of the arbitration process.

As noted by other commentators, this type of issue highlights the benefits of using the AAA case administration services.

Dave Daniels

The importance of disclosure is not dependent upon the forum. The completeness and accuracy of disclosure and the continuing obligation to disclose arise not only from the applicable rules of an administering forum but also from our professional responsibility as arbitrators. I have never forgotten the advice of Edna Sussman in my initial training as an arbitrator (thank you, Edna) "Disclose, disclose, disclose." Arbitration is a matter of agreement, and, so long as the disclosure is complete and the parties acceptance of any hint of conflicts clear, the process is fair. I have been appointed by a court as an arbitrator in the context of a motion to compel arbitration and have conducted "non-administered" arbitrations in that context. For the record, I believe that a mediator's duty to disclose should not be different than an arbitrator's duty. I use the same disclosure statement in both contexts and, in both cases, my disclosure statement is several pages long when there is nothing specific to disclose.

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This page contains a single entry from the blog posted on October 28, 2018 1:13 PM.

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