“Vet Your Fee Arbitrator Early.”
In May 2016, I posted on the then unpublished case Baxter v. Rock, and posted later that the case was partially published. 247 Cal.App.4th 775 (2016). Relying on the case, I pointed out that an arbitrator’s mistake about an attorney’s fees award was no basis for overturning the award under California’s Mandatory Fee Arbitration Act, but that a judge’s error in assigning different hourly rates to two attorneys, without a reasonable basis for doing so, was subject to a different standard of review, and could be more easily reversed – as it was.
The case, however, was also important for what it said about arbitrator disclosures. The arbitrator who failed to disclose prior experience auditing attorney’s fees, could not be later disqualified in an attorney fee arbitration held under the MFAA. Just because the arbitrator had experience auditing attorney’s fees did not necessarily mean that the arbitrator was biased for or against the attorney or the client.
Mary A. Dannelley, Esq. has written an article about the disclosure requirements discussed in Baxter v. Rock, published in Orange County Lawyer (November 2016), and entitled, “The Message from Baxter v. Rock: Vet Your Fee Arbitrator Early.”
Here are three takeaways from this helpful article:
- “arbitrators are required to disclose: (a) connections to the parties, the facts, or the events at issue in the fee dispute; and (b) business activities of an attorney arbitrator (including the nature of his or her law practice) that would create an economic incentive to rule in favor of one party over the other.”
- the arbitrator should disclose the arbitrator’s practice as an attorney if it is focused on a particular area related to the subject matter of the litigation such that it would provide the arbitrator with an incentive to rule in favor of one side rather than the other.
- vet your arbitrator early, because post-arbitration challenges to the sufficiency of disclosures will be viewed by the courts with a gimlet eye.