ADR Arbitration Procedures & Ethics 2 — Questions and Answers
Question 1: An arbitrator discovers mid-hearing that her former law firm represented one of the parties five years ago. What is the most appropriate action?
- Continue the arbitration since the relationship is too old to matter
- Immediately disclose the relationship to both parties and allow them to decide whether to proceed (Correct answer)
- Withdraw from the arbitration without explanation
- Consult only the party she did not represent
Correct answer: Immediately disclose the relationship to both parties and allow them to decide whether to proceed
Arbitrators must disclose any relationship that could create a reasonable appearance of partiality, regardless of how long ago it occurred, and let the parties decide how to proceed.
Question 2: In AAA Commercial Arbitration Rules, what is the default number of arbitrators if the parties have not agreed otherwise?
- Three arbitrators
- One arbitrator (Correct answer)
- Two arbitrators
- It is determined solely by the amount in dispute
Correct answer: One arbitrator
Under AAA Commercial Rules, the default is one arbitrator unless the parties agree otherwise or the AAA determines that three are appropriate given the complexity or size of the case.
Question 3: Which principle prohibits an arbitrator from communicating with one party about the merits of a case without the other party present?
- The principle of proportionality
- The prohibition on ex parte communications (Correct answer)
- The duty of confidentiality
- The doctrine of functus officio
Correct answer: The prohibition on ex parte communications
The prohibition on ex parte communications requires that all substantive discussions about the case occur with all parties present or simultaneously notified.
Question 4: A party fails to appear at a properly noticed arbitration hearing. Under most arbitration rules, the arbitrator should:
- Automatically rule in favor of the present party
- Adjourn the hearing indefinitely until the absent party appears
- Proceed with the hearing and render an award based on the evidence presented (Correct answer)
- Dismiss the case for want of prosecution
Correct answer: Proceed with the hearing and render an award based on the evidence presented
Most arbitration rules allow the arbitrator to proceed and issue an award when a party fails to appear after proper notice, without treating the absence as a concession of the claims.
Question 5: The doctrine of 'functus officio' in arbitration means:
- The arbitrator has unlimited power to reconsider any decision
- Once a final award is issued, the arbitrator's authority over the matter is exhausted (Correct answer)
- The arbitrator can delegate duties to a third party
- The award cannot be confirmed by a court
Correct answer: Once a final award is issued, the arbitrator's authority over the matter is exhausted
Functus officio (task performed) means the arbitrator's jurisdiction ends upon issuing the final award, with limited exceptions for clerical corrections.
Question 6: Under the Federal Arbitration Act (FAA), which of the following is NOT a ground for vacating an arbitration award?
- The award was procured by corruption or fraud
- The arbitrators exceeded their powers
- The arbitrator made an error of law (Correct answer)
- The arbitrator refused to hear pertinent evidence
Correct answer: The arbitrator made an error of law
The FAA does not permit vacatur for legal errors; courts may only vacate for the narrow statutory grounds such as fraud, corruption, evident partiality, or exceeding powers.
Question 7: When an arbitration clause is found to be unconscionable, the typical judicial remedy is to:
- Enforce the entire contract but ignore the arbitration clause
- Void the entire contract along with the arbitration clause
- Sever the unconscionable provisions and enforce the remainder if possible (Correct answer)
- Refer the parties to mediation instead
Correct answer: Sever the unconscionable provisions and enforce the remainder if possible
Courts typically sever unconscionable provisions and enforce what remains of the arbitration clause or contract, rather than voiding the entire agreement.
ADR Arbitration Procedures & Ethics 2
An arbitrator discovers mid-hearing that her former law firm represented one of the parties five years ago.
What is the most appropriate action?