Neutral Corner - June 2001

Keep Arbitration on Track

A frequently cited source of arbitrator frustration is party postponements of scheduled arbitration hearings. However, this coin has two sides. Since parties often express frustration to the staff about postponements caused by arbitrators, we believe it makes sense to examine the arbitrator’s duty of keeping the process moving.

The Code of Ethics for Arbitrators in Commercial Disputes (Code of Ethics) provides standards of ethical conduct for the guidance of arbitrators. Although the Code of Ethics is not part of the NASD Code of Arbitration Procedure, NASD Dispute Resolution adopted the Code of Ethics and expects arbitrators to abide by its standards and principles.

Canon I of the Code of Ethics provides that neutral arbitrators are ethically obligated to preserve the integrity and fairness of the arbitration process. This duty begins when arbitrators accept appointment to a panel and continues throughout all stages of the proceeding, and in some instances, even after the arbitration ends.

One of the ethical duties contained in Canon I is that arbitrators should accept case appointments only if they are available to conduct the arbitration promptly. Another is that arbitrators should make reasonable efforts to prevent abuse or disruption of the arbitration process.

Canon IV of the Code of Ethics provides that arbitrators are obligated to conduct fair and diligent proceedings and conclude cases as promptly as the circumstances reasonably permit. Arbitrators who agree to serve should not cancel their service commitments at the last minute or cause postponements, unless the reason for such cancellation or postponement is outside of their control (e.g., emergency).

NASD Dispute Resolution arbitrators should be prepared and punctual for all hearings. They should also be available to serve promptly and to the end of all assigned matters. Please review the NASD Dispute Resolution Arbitrator's Briefing Sheet intended as a reminder of the duties and obligations of NASD arbitrators.

Failure to act in this manner not only violates the ethical responsibilities of arbitrators to the parties and the arbitration process as set forth above, but also can cause severe procedural delays that are often costly.

We urge arbitrators to take seriously their obligation to keep cases moving, and to avoid unnecessary postponements.