Supplemental Disclosures: An Arbitrator’s Duty

Posted on: Tue, 09/28/2021

By: Kelly Turner, Esq., Senior Counsel, AAA® and John Bishop, Vice President, Commercial Division, AAA

The post The Importance of Timely Arbitrator Disclosures (6/15/21) discussed the importance of an arbitrator’s making timely disclosures, whether at the time of appointment or during the pendency of the case. This post focuses more specifically on an arbitrator’s obligation to make supplemental disclosures during the life of an arbitration case.

This duty to provide supplemental disclosures applies across all pending cases to which the arbitrator is appointed. For example, assume that Arbitrator Smith already is serving as an arbitrator on two cases involving Party A. Arbitrator Smith then accepts the appointment to serve as an arbitrator in a third case with Party A. Arbitrator Smith of course should disclose in the third case that they already are serving as an arbitrator in the two pending Party A cases. Additionally, Arbitrator Smith should disclose in those two pending cases that they have accepted appointment in a new third case involving Party A.
Another example of a required supplemental disclosure is when an arbitrator is added to a panel where that arbitrator and a panel member are serving together on a panel in another case. In this scenario, assume Arbitrator Smith already is serving on a panel with Arbitrator Doe in case Company A vs. Corporation B. In a second case to which Arbitrator Smith has been appointed, the parties select Arbitrator Doe to chair the panel. Both Arbitrator Smith and Arbitrator Doe now should make supplemental disclosures in the Company A vs. Corporation B case to advise that they are serving on another panel together in the second case.
Some jurisdictions, such as California, have been proactive in this area.  An example is Standard 12 of the California Ethics Standards for Neutral Arbitrators in Contractual Arbitration, titled “Duties and limitations regarding future professional relationship or employment.” Standard 12(b)(1) requires that proposed arbitrators disclose at the time of their appointment whether they “will entertain offers of employment or new professional relationships in any capacity other than as a lawyer, expert witness, or consultant from a party or a lawyer for a party, including offers to serve as a dispute resolution neutral in another case.” A party can disqualify, pursuant to Standard 12(b)(3), a prospective arbitrator who has indicated in the affirmative that they will entertain such a “future professional relationship or employment.” 

Even if an arbitrator has indicated a willingness for future professional relationships or employment with a party or a party’s lawyer and was not disqualified under Standard 12(b)(3), the arbitrator is not relieved of the obligation to make continuing disclosures about any such new engagements. A party may not be able to object under Standard 12(b) if the arbitrator later accepts such appointments (other than in consumer arbitrations, covered separately under Standard 12(d)). However, the parties (at least for cases administered under the AAA’s rules) still have the right to challenge the continued service of the arbitrator based on new, relevant information the arbitrator discloses or should have disclosed. 

The Code of Ethics for Arbitrators in Commercial Disputes, created by a joint committee of the AAA and the American Bar Association, codifies the continuing disclosure obligation in Canon II.D. It states, “The obligation to disclose interests or relationships described in [Canon II] paragraph A is a continuing duty which requires a person who accepts appointment as an arbitrator to disclose, as soon as practicable, at any stage of the arbitration, any such interests or relationships which may arise, or which are recalled or discovered.” Code of Ethics Canon I.C. further provides that, after accepting appointment and while serving, an arbitrator “should avoid entering into any business, professional, or personal relationship, or acquiring any financial or personal interest which is likely to affect impartiality or which might reasonably create the appearance of partiality,” unless the arbitrator has made full disclosure of the relevant facts and the parties have consented to the arbitrator’s continuing service.

A key theme under the AAA’s and other arbitral providers’ rules, the Code of Ethics, and the California Ethics Standards is transparency. Because arbitration is an agreed-upon alternative to court, it is important that the parties are informed of the relevant relationships, work history, and current engagements of their neutral arbitrator not only at the start of a case but through the life of the case to ensure the parties’ confidence in the process.

Blog Home

The content of this webpage is not offered as legal advice or legal opinion and it should not be relied upon for any specific situation.  This webpage is for informational purposes only. While the AAA-ICDR endeavors to keep the information updated and correct, AAA-ICDR makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, or reliability of the information contained on this webpage.  AAA-ICDR is not responsible for any inaccuracies, errors or omissions, or for the results obtained from the use of this webpage or the content herein.