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Printer-Friendly What are Challenges for Cause?

Pursuant to the Uniform Code, an arbitrator is required to disclose any direct or indirect financial or personal interest in the outcome of the arbitration as well as any existing or past financial, business, professional, family, or social relationships that are likely to affect impartiality. Persons requested to serve as arbitrators should disclose any such relationships that they have with any party or its counsel, or with any individual whom they have been told or have reason to believe will be a witness. They should also disclose any such relationship involving members of their families or their current employers, partners, or business associates. Pursuant to the Code, arbitrators are requested to make reasonable efforts to identify these relationships. In addition, parties should advise the Director if they are aware of any similar relationships involving a party, counsel, or a potential witness.

A challenge for cause to a particular arbitrator will be granted where it is reasonable to infer an absence of impartiality, the presence of

bias, or, the existence of some interest on the part of the arbitrator in the outcome of the arbitration. The interest or bias should be direct, definite, and capable of reasonable demonstration, rather than remote or speculative.

The following, though not exhaustive, are examples of circumstances where a challenge for cause would be granted.

Opinion and Bias

1. Arbitrator has a firm opinion or belief as to the subject of an action for which she/he is an arbitrator.
2. Arbitrator has a personal bias toward a party.

Business or Personal Relationships

1. Arbitrator is or was related by blood or marriage to any party, its attorneys, or witnesses.
2. Arbitrator is or was guardian or ward, conservator or conservatee, employer or employee, principal or agent, or debtor or creditor of either a party or an officer of a corporation which is a party. Arbitrator is the parent, spouse, or child of one who is related as above described.
3. Arbitrator is a member of any party's family, a business partner of any party, a surety or guarantor of the obligations of any party, or is currently a bondholder or shareholder of any corporate party.

Previous or Current Involvement

1. Arbitrator is adverse to a party, its attorneys, or witnesses, or has complained against or been accused by any of them in another action, instituted or resolved during the past five years.
2. Arbitrator or any member, shareholder, or associate of her or his law firm has been in the relation of attorney or client with, or adverse to, any party within three years of the filing of the arbitration claim.

Financial Interest
Arbitrator knows that she/he has, individually or as a fiduciary, or her/his spouse or minor child residing in her/his household has a financial interest in the subject matter in controversy or in a party to the arbitration proceeding, or any other interest that could be substantially affected by the outcome of the arbitration proceedings.

While most arbitrator challenges are resolved after the Director of Arbitration has reviewed the parties’ relevant written submissions, a party can request that a conference call be convened with all counsel and the Director of Arbitration. Each arbitrator must swear or affirm to render a fair and just award based on the documents and evidence presented by the parties. Also, unless the case is proceeding under an SRO rule that permits direct communication between the parties and arbitrators,¹ no party should attempt to communicate directly with any of the arbitrators. Such communication may render the decision of the arbitrator invalid. Any communication for the arbitrators must be addressed through the Director.

¹ See, e.g., SICA Uniform Code of Arbitration Rule 23(e).