Page 3 - Alternative Dispute Resolution

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Alternative Dispute Resolution | MONDAY, NOVEMBER 17, 2014 | S3

rated the Guidelines wholesale into their firm and one of the parties, so long as

How much is it rules and procedures, and courts have the arbitrator is not personally involved
referred to them only occasionally in their with them.9 In the United States, party
opinions. The Guidelines consist of many autonomy is given wide scope. Informed
Orange List examples and “it depends on advance waivers of conflicts for arbitra-
really worth?
the circumstances” qualifications, and tors have been expressly approved by
some have suggested that the Guidelines some institutional rules and noted by the
could be improved if they were made more courts without surprise.10 Some believe
concrete or at least addressed additional that such waivers are, as a practical matter,
examples of conflicts not expressly cov- necessary in matters involving members
When it’s time to make important decisions
ered. Some critics argue that the Guide- of large law firms who serve as arbitrators
such as buying or selling a business, valuing an lines are fundamentally flawed because in international commercial matters. Con-
opportunity or assessing what may have gone they lack clarity, which contributes to flicts checks are snapshots at a particular
wrong in a business deal, your clients need to uncertainty about disclosure issues, and moment in time, and it may be unrealistic
that they adopt stricter standards of to expect that a lawyer/arbitrator will be
know where they really stand.
independence and impartiality than some
Estimating the value of assets is both art and national laws and institutional rules and
may contribute to increased challenges
science. You need someone to value your
clients’ interest and communicate the opinion to arbitrators.5
The IBA Guidelines serve
effectively.
The IBA Guidelines also have been criti-
cized because they seek a balance between multiple audiences. Their
EisnerAmper‘s team has the expertise to what appears to be a “reasonable” degree most valuable role is to help
of disclosure of “significant” arbitrator con-
assess your clients’ interests, helping you meet flicts on the one hand and, on the other, potential arbitrators evaluate
their needs and make their case.
what the Guidelines call “unnecessary” or
“excessive” disclosure that could lead to the conlicts they might face
Read more about valuation at
“frivolous” challenges to arbitrators. For and consider what disclosures,
EisnerAmper.com/valuation
example, the Guidelines suggest a three- if any, they should make in
year time limit for certain types of disclo-
sures, such as the Orange List example of deciding to undertake an
a disclosure that an arbitrator was within arbitral assignment.
the past three years a partner or lawyer
in the same firm with one of the lawyers
Let’s get down to business.® eisneramper.com 212.891.4170 appearing in the case or with another arbi- able to conduct daily conflicts updates
trator serving in the matter.6 Some U.S. to review and describe new matters not
MichaelAronow [email protected]
lawyers, noting that the AAA/ABA Code personally involving him or her and that

and U.S. case law do not contain such time in fact pose no threat to neutrality.
limitations on disclosures and that U.S. In October 2014, after a decade of experi-
arbitrators generally would not restrict ence with the initial version of the Guide-
such a disclosure to events or relation- lines, including a two-year consultation
ships during the last three years, have and evaluation process with international
suggested that the Guidelines set the bar users, the IBA issued the first revision of
too low and would relieve arbitrators of these disclosure standards. The 2014 IBA
the duty to be more completely forthcom- Guidelines11 retain the framework and From the publishers of

ing about conflicts occurring more than much of the text of their 2004 predeces-
three years ago.
sors and add some examples to address
But others have complained that the new situations. But they do not attempt
2004 Guidelines strike the balance wrong a radical transformation to address com-
in the opposite way, by failing to consider plaints that they should be more prescrip-
properly the situation of one category of tive or should alter the balance of what is
prospective arbitrators: lawyers affiliated considered reasonable disclosure.
with large, global law firms.7 These crit- Nor do the new Guidelines sharply Your foundation in an evolving market
ics say that the Guidelines make too little change the balances struck by the IBA
• Stay on top of trending cases
allowance for the complexity of potential in the former version of the Guidelines
conflicts and disclosure requirements pre- (1) prescribing what is reasonable disclo- • Keep up with news affecting
sented by a firm with thousands of lawyers sure, (2) defining the role of the large law
and an even larger number of clients. The firm lawyer, and (3) dealing with advance your clients
Guidelines identify any lawyer employed waivers of conflicts.
by or affiliated with a law firm as in prin- On the first subject, reasonable disclo- • Follow your competition
ciple “identical to his or her law firm” for sure, the 2014 Guidelines retain the basic
conflicts purposes and make no provision rules that arbitrators should disclose
for the ethical walls routinely used by information that “may, in the eyes of the • Become a Commercial Division
expert
large firms to exclude particular attorneys parties,” give rise to doubts as to the arbi-
from knowledge of specified matters. The trator’s impartiality or independence, even
Guidelines do state, however, that “the though the arbitrator believes that the
fact that the activities of the arbitrator’s information in fact should not do so (the
firm involve one of the parties shall not so called “subjective” standard).12 But the Start Your 2-week Free Trial: AT.LAW.COM/CLITRIAL2
automatically constitute a source of such Guidelines make clear that an arbitrator
conflict or a reason for disclosure.”8
should be disqualified only if the informa-
The 2004 Guidelines also view with tion actually would give rise to a justifiable

disfavor, and seek to prohibit, the use of doubt about his or her neutrality “from the
advance waivers in which parties acknowl- point of view of a reasonable third person
edge that, after appointment, the arbitra- having knowledge of the relevant facts and @NYcomLitInsider www.litinsider.com
tor is not obligated to make ongoing con- circumstances” (the “objective” standard)
flicts checks and additional disclosures and if there has been no express waiver
about new matters affecting his or her law
of the conflict in question.13 » Page S14