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Arbitration in Evolution

by Beth Graham
November 2014 Beth Graham

Professor Thomas Stipanowich, Pepperdine University School of Law, and Straus Institute for Dispute Resolution Research Fellow Zachary Ulrich, have published “Arbitration in Evolution: Current Practices and Perspectives of Experienced Arbitrators,” Columbia American Review of International Arbitration, Forthcoming ; Pepperdine University Legal Studies Research Paper No. 2014/30. The paper fully analyzes the data obtained in a groundbreaking 2013 survey regarding commercial arbitration practice in both U.S. and international disputes that 134 members of the College of Commercial Arbitrators (“CCA”) responded to. The following begins a series of blog posts highlighting various aspects of the authors’ publication.

In “Arbitration in Evolution: Current Practices and Perspectives of Experienced Arbitrators,” the authors first offer an introduction to the survey and acknowledge several caveats to the data garnered from it. After that, Professor Stipanowich and Mr. Ulrich provide a detailed survey group profile:

The CCA/Straus Institute Survey portrays a group of experienced arbitrators who by and large are “elders.” They are virtually all members of the legal profession—an apparent reflection of the dominance of lawyers in arbitration and the growing legal orientation of arbitration. They are overwhelmingly male, although there are signs that women, who are gradually moving up through the ranks of legal professionals, are increasingly developing successful careers as arbitrators. They tend to have considerable experience as arbitrators. Finally, although they depend on arbitral appointments to provide them with revenue or other tangible benefits, if only a continuing sense of purpose in retirement most of them think they don’t have enough work.

According to the authors, 109 of the 134 CCA members who responded to the survey request chose to provide their birth year:

The data indicate that these experienced arbitrators are virtually all beyond the median age of practicing lawyers. More than 70% of them are 65 or older, as compared to only 13% of licensed attorneys. Because recognition as a Fellow of the CCA is normally accorded to arbitrators who have been in practice for some time, this is not a great surprise. The results support the conclusion that arbitrators are often selected from the most senior ranks of professionals. As indicated below, moreover, such individuals often carry on their activities as arbitrators for decades.

Similarly, 123 of the survey respondents provided their gender. Interestingly, “an overwhelming majority (84.6%) represented that they were male; only 15.4% were female.” Professor Stipanowich and Mr. Ulrich add,

These data are representative of the overall membership of the surveyed population, the membership of the CCA. They are also broadly consistent with other recent data reflecting the relative paucity of females among the ranks of practicing arbitrators. They reinforce the conclusion that the representation of women in this arena lags well behind the overall representation of women within the legal profession.

Among those female respondents who reported both their gender and their age, the average age was 62.8 years old, almost 6 years younger than the average for the entire respondent pool and 6.7 years younger than the average age of their male counterparts. Not one female respondent reported being over 71 years of age—a truly remarkable fact when one considers that, as mentioned above, more than forty percent (41.8%) of all CCA/Straus Institute Survey respondents indicated that they were 71 or older!

After providing some likely explanations for the apparent gender disparity demonstrated in the survey results, the authors moved on to examine the professional backgrounds of the arbitrators who responded:

The Survey results depict a cadre of arbitrators with varied professional specialties, but nearly always as lawyers and judges. Chart C shows that the great majority (81.9%) of respondents reported having “litigation” backgrounds. About three in ten (28.3%) claimed experience as transactional attorneys, and 9.4% as judges. Although two individuals reported having “non-legal” backgrounds, only one lacked experience as an attorney.

According to the authors,

There is no question that in this era of “judicialized” arbitration greater emphasis has been placed on law, litigation-style lawyering and legal standards in arbitration. However, given the fact that there is no legal requirement for arbitrators to be members of the bar and, moreover, that multidisciplinary panels have long been employed in the arbitration of construction disputes and other kinds of controversies, the overwhelming hegemony of lawyer arbitrators reflected in the Survey data, particularly those with litigation experience, is truly surprising. Although the data are undoubtedly a reflection of the legal orientation that has characterized the CCA from its origins, there is reason to believe that today, general speaking, commercial arbitrators are more likely to be attorneys than in former days, and that the participation of non-lawyer arbitrators is diminishing. One must ask, are business parties better off using all-lawyer tribunals, or are there circumstances in which a mix of expertise may be more appropriate?

In their paper, Professor Stipanowich and Mr. Ulrich next describe the survey respondents’ experience level including the number of cases each individual reported having served on as an arbitrator. The authors also looked at each arbitrator’s professional status, whether or not the individual serves as an arbitrator full-time, and whether each arbitrator believes that he or she enjoys a sufficient level of arbitrator work.

Finally, the authors discuss each arbitrator’s declared motivation for serving as an arbitrator:

Almost as many respondents claim to be motivated by a desire to do public service. The latter may reflect general philosophies about the importance of arbitration as an instrument of justice, although some respondents may be alluding to active volunteer efforts in court-connected and bar-sponsored arbitration programs, or even acceptance of a less-than-normal fee for service as, for example, a FINRA securities arbitrator.

The 47 participants who chose “Other” were asked to specify any other reasons why they chose to practice as arbitrators. Among those respondents, almost three-fifths (28 respondents, or 59.6%) offered comments to the effect that serving as an arbitrator was “fun,” “enjoyable” or generally “rewarding.” Another 20 individuals (42.6% of that group) indicated that service as an arbitrator was “intellectually stimulating” or generally “interesting” and another nine (19.1%) thought that arbitrating was a “good” or “the best” usage of their talents, abilities, and experiences, including prior service on the bench. (“It is the closest to continuing my work as a [j]udge following my retirement from the [b]ench.”) Eight respondents (17.0%) stated that they arbitrate to keep them “active” and “engaged” after retirement. Finally, four individuals (8.5%) indicated that one reason they arbitrate is because of the “satisfaction” they obtain by “serving justice,” including in instances where they think the “court system doesn’t work well.”

For more information on this groundbreaking survey, please read Professor Stipanowich’s guest blog post or review the authors’ full article. In addition, Professor Stipanowich’s companion piece entitled, “Reflections on the State and Future of Commercial Arbitration: Challenges, Opportunities, Proposals,” Columbia American Review of International Arbitration, Forthcoming; Pepperdine University Legal Studies Research Paper No. 2014/29, provides readers with both context and an analytical framework for a significant portion of the data summarized in the authors’ work.

Biography


Beth Graham received a J.D. from the University of Nebraska College of Law in 2004 and a M.A. in Information Science and Learning Technologies from the University of Missouri in 2006. She also holds a B.S. in Public Administration from the University of Nebraska-Omaha. She is licensed to practice law in Texas and the District of Columbia.



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