PBCBA BAR BULLETINS pbcba_bulletin_Sept. 2019 | Page 5

ADR CORNER
Choosing the ADR Professional –
The Inevitableness of Bias
LAURA J. STARR
An ADR Corner article entitled "Yes,
the Mediator is Biased" by Kim Nutter
appearing in the July/August 2018 PBCBA
Bulletin piqued my interest in the topic as it
relates to arbitrator and mediator selection.
One benefit of ADR is typically the ability
to participate in selecting the person or
people (i.e., an arbitration panel), who may
make the decision or recommendation in
your case. While different methodology is
employed by different organizations for the
selection of arbitrators, parties typically
have the opportunity to have some, if not
substantial, involvement in the selection of
their arbitrator(s). Even though mediators
are typically agreed upon or appointed by
the court, there is still the opportunity to
have a voice in their selection and conduct
research about their background as it may
expose potential bias.
When selecting arbitrators and mediators,
parties can (and do) rule out individuals
who could be perceived as possessing
a professional or personal bias based
on categories such as age, gender,
employment, education, political affiliation,
and case history. With this said, what do
litigators seek when selecting mediators
and arbitrators? Do litigators hold certain
biases in the selection process: are biases
warranted? While writing this, I found
articles and cases with points to consider.
A study by Pritchard, Adam C. "The
Influence of Arbitrator Background and
Representation on Arbitration Outcomes."
S. J. Choi and J. E. Fisch, co-authors. Va. L.
& Bus. Rev. 9, no. 1 (2014): 43-90, discusses
the effect of "repeat players" who may have
an advantage by arbitrators who want
to continue to be selected. The authors
focus on FINRA arbitrators and identify
"professional arbitrators" and "retired
arbitrators" who are a large percentage of
FINRA’s roster and both are perceived as
potentially currying favor with brokerage
firms to ensure they are repeatedly selected
to serve as arbitrators. The authors reviewed
cases involving pro se litigants and made a
consistent finding that "representation by
counsel can reduce or eliminate the effect
of arbitration background on arbitration
outcomes.” The "repeat players" notion is
not an anomaly to the securities industry
and is noted in other areas of dispute.
However, the study also recognizes: "it
should be noted that, “[t]he most sought-
after” arbitrators “are those who are
prominent and experienced members
of the specific business community in
which the dispute to be arbitrated arose.”
Conversely, “an arbitrator’s connections
to the industry – those same connections
that may furnish expertise – may also lead
to claims of arbitrator bias.” International
Produce v. A/S Rosshavet , 638 F.2d 548 (2d
Cir. 1981)
From their study they also conclude that an
arbitrator’s background is correlated with
arbitration decisions. The determining
background factors (is typically available
to parties selecting the panel if the required
arbitrator disclosures are accurate and
current), include industry ties, experience
as a regulator or compliance officer and
status as professional or retired arbitrators
(having sat on numerous panels which
is typically displayed on their arbitrator
background information sheet). This type
of bias may not be limited to arbitrators but
could also potentially apply to mediators
(see Liljeberg v. Health Servs. Aquisition
Corp. , 486 U.S. 847, 863-4 (1988) and CEATS,
Inc. v. Continental Airlines, Inc. , et al 755
F.3d 1356 (Fed. Cir. 2014). Despite disclosure
requirements, mediators who also wish
to continue to be asked to mediate by the
same attorneys, law firms and corporate
entities could play favorites in subtle ways
over parties they will likely not encounter
again. For this reason, due diligence on your
selection and disclosure requirements is
critical. In some situations, parties may not
be aware of relevant information pertaining
to an arbitrator or mediator which could
lead to future issues or further litigation.
However, if contemplating a challenge to
an arbitration decision (which are rarely
successful and limited in grounds), beware
that an appeal on the basis of alleged bias
could result in sanctions - see Kathy Fowler,
et. al. v. Ritz Carlton Hotel Co. LLC. (11th Cir.
August 19, 2014).
PBCBA BAR BULLETIN
5
Laura J. Starr is a partner at Weisman,
Brodie, Starr & Margolies, P, A. with offices
in Boca Raton and Lake Worth and she is
on the Alternative Dispute Resolution and
Judicial Relations Committee for the Palm
Beach County Bar Association. She and
her family reside in Lake Worth where she
sits on the Planning & Zoning and C-51 City
Commission Advisory Boards. The firm
concentrates in the areas of Commercial/
Civil/Business Litigation, Employment,
Real Estate transactions and litigation,
Construction disputes including Lien Law,
Insurance disputes, FINRA Disputes and
most other arbitration forums. The firm
litigates in Federal, State and Appellate
Courts.
For additional ADR tips and resources, go to
http://www.palmbeachbar.org/adr/
The Committee for Diversity
and Inclusion invites you to its
“Legacy Celebration”
Reception. Dinner. Speaker.
Evett Simmons, Esq.,
Tuesday, November 5, 2019
5:30 PM to 8:00 PM
BallenIsles Country Club
Palm Beach Gardens