The ARIAS U.S. Code of Conduct, which sets out in 10 Canons and related Comments considerations and behavioral standards for arbitrators conducting insurance and reinsurance arbitrations in the United States, provides in its preamble that
. . . the parties and their counsel are expected to conform their own behavior to the Canons and avoid placing arbitrators in positions where they are unable to sit or are otherwise at risk of contravening the Canons. Parties and counsel should provide prospective arbitrators and umpires with sufficient information concerning the dispute and all of its potential participants so that they may fairly consider whether to serve.
So how can counsel help arbitrators avoid running afoul of the Code of Conduct and otherwise make the life of the arbitrators a little better?
First, counsel can do what the last quoted sentence says to do. Make sure the arbitrators have sufficient information about the parties, affiliates, party-representatives, known witnesses, and entities that are controlling the claim and the arbitration, but who are not “parties”; the subject matter of the arbitration; and any other information relevant to the arbitrators’ consideration on whether to accept an appointment as an arbitrator or umpire. The umpire questionnaire is an important place to set out that information. The ARIAS questionnaire form, whether for umpire selection or neutral panel selection, has the appropriate places for counsel to succinctly but accurately set forth the information that will assist an arbitrator in determining whether the arbitrator can serve.
Arbitrators today are expected to keep reasonable records of their arbitration service so that they have the appropriate information to determine whether they can serve. Arbitrator or umpire selection can take some time and arbitrators sometimes do not find out the outcome of the selection process for weeks or months or ever. This presents a serious problem for arbitrators because they do not know if they can accept a subsequent appointment while the earlier appointment is still pending. For example, if an arbitrator is nominated as an umpire candidate where the XYZ Company is a party and then is asked to serve as a party-arbitrator adverse to the XYZ Company, the arbitrator may need to decline the second opportunity and then may lose the first opportunity if the arbitrator is not the successful umpire candidate. Worse, if a nomination has been pending for months or years, it is possible that the arbitrator will lose track of its existence or assume it never went forward. This issue has resulted in several court cases challenging an arbitrator’s failure to disclose potential relationships.
Besides helping to make the arbitration panel selection process run in a timely manner, counsel should advise all candidates of the outcome of the selection process as soon as possible. For example, if the parties use a strike and rank selection process and there are a total of 10 umpire candidates, once the ranking is concluded and the umpire is selected, counsel should advise the other 9 unsuccessful candidates that they were not chosen as umpire. This allows those arbitrators to clear this nomination from their waiting list and allows them to accept subsequent assignments that involve one of the same parties. This courtesy is very important to arbitrators as illustrated above and it is amazing to me that it is not universally done. So next time you pick an arbitration panel, make sure you advise all candidates of the outcome as soon as possible. They will be grateful for your consideration.