Take Care with Arbitrator Selection

Sometimes litigants learn the hard way that the judicial system doesn’t always dispense justice as well as it merely settles disputes. With arbitration, that lesson can be particularly harsh, since arbitrators aren’t required to follow the same rules as judges and, in almost every case, their decisions cannot be appealed. For this reason, the choice of an arbitrator to decide your lawsuit requires extreme care.

The pitfalls of a bad arbitrator selection process can be substantial. Virtually unfettered authority leaves arbitrators free to exercise biases that should play no role in the legal process. They can unjustly inflate awards, find excuses for denying them, and make arbitrary and capricious decisions like changing their minds in mid-stream about applicable law or refusing to award interest on judgments they do issue. Even when a litigant suspects something untoward has occurred — as I now do in a recent arbitration in which I was involved — there’s normally no way to address the problem once an arbitrator is selected and renders a decision.

Since it’s now common for employers to require arbitration agreements with new employees, arbitrator selection issues arise with relative frequency. Both parties should be sure to carefully review a proposed arbitrator’s background for a variety of issues, including knowledge of the subject matter and a history of rendering decisions in arbitration and elsewhere. Reputations should not be taken at face value, and efforts should always be made to seek out information about an arbitrator’s temperment, past behaviors, and any biases that may have appeared during the course of a public or private career. When the arbitrator is a former judge, his/her decisional history can be reviewed and patterns can be looked at. Attorneys and others generally will have had experience with proposed arbitrators and can lend invaluable insights.

Though some attorneys will automatically reject an arbitrator who is proposed by an opposing party, I don’t normally follow that practice. My recent experience with an arbitrator suggests I should perhaps rethink things. In any event, it’s made clear to me that carrying a good reputation as a former judge does not a quality arbitrator make. Though knee jerk rejection of my opponent’s future proposals seems extreme, I’ll certainly be far more thorough with research in the future.