Ethics Standards 2, 3, 7, 8, 12, 16 and 17 are amended, effective July 1, 2014
Matthew Bender’s Rules of Court Special Update (December 2013) explains that Ethics Standards for Neutral Arbitrators in Contractual Arbitration, Standards 2, 3, 7, 8, 12, 16, and 17 are:
“amended to: (1) codify the holdings in decisions on the inapplicability of the standards to arbitrators in securities arbitrations and on the time for disclosures when an arbitrator is appointed by the court; (2) require new disclosures about financial interests a party or attorney in the arbitration has in an administering arbitration provider provider or the provider has in a party or attorney and about any disciplinary action taken against an arbitrator by a professional licensing agency; (3) clarify required disclosures about associations in the private practice of law and other professional relationships between an arbitrator’s spouse or domestic partner and a lawyer in the arbitration; (4) require arbitrators in consumer arbitrations to inform the parties in a pending arbitration of any offer of employment from a party or attorney for a party in that arbitration; and (5) prohibit arbitrators from soliciting appointment as an arbitrator in a specific case or specific cases.”
I was particularly pleased to see the addition of the following language to Standard 16, requiring disclosures in writing of the terms and conditions of the arbitrator’s compensation: “any requirements regarding advance deposit of fees; and any practice concerning situations in which a party fails to timely pay the arbitrator’s fees, including whether the arbitrator will or may stop the arbitration proceedings.”
I have seen an arbitration shut down after a party received an adverse ruling, and refused to advance or pay any more money to the arbitrator. The new disclosure required by Standard 16 likely won’t affect the how arbitrators react to non-payment, but at least all the parties and their attorneys will be informed and participate with eyes wide open, knowing that non-payment will probably result in a halt to arbitration, unless one party is willing to foot the entire bill.