The attack on arbitration continues

THE NEUTRAL CORNER

As a neutral I act as both a mediator and an arbitrator. No longer will I act as an arbitrator for an attorney or party for whom I have mediated any matter. Early in my career, I made the mistake of reluctantly acceding to the request of an attorney -- who was a good mediation client -- that I agree to act as arbitrator in a dispute in which he was representing the buyer of a house in a dispute with the contractor. That case had been languishing in one of the panels because both parties were reluctant to pay the fees involved. At the time, I was not affiliated with any panel and agreed to conduct a one-day hearing on the matter. Of course, you can guess what happened. I ruled against the party represented by the attorney for whom I had mediated many cases. I never heard from that lawyer again except when he responded to a message I sent him with the words "you broke my heart."

Recently, in response to the Feb. 20 Daily Journal column I wrote on the transparently political letter from 56 attorneys general calling for legislation making arbitration agreements in sexual harassment cases illegal, a prominent local plaintiff's employment attorney told me "all good ADR professionals only do mediations." Thanks a lot.

I have acknowledged -- and will continue to acknowledge -- that arbitration has its limitations. It is by no means a perfect way to resolve disputes. Mediation is better. But arbitration, properly administered, has the potential to be a valuable part of the civil justice system. Anyone who has spent more than 10 minutes as a litigator in either state or federal court must surely concede that the system would quickly become overloaded and break down if all disputes were litigated in court.

I have no problem with anyone who argues against compulsory arbitration clauses based on facts. Unfortunately, like in so many other areas these days, facts do not seem to matter. The latest example is the March 21 letter from the Consumers for Auto Reliability and Safety Foundation to Attorney General Xavier Becerra "urging" him to "investigate the practices of private arbitration firms that operate in secret, in violation of California's Code of Civil Procedure." Thirty-five organizations signed the letter including: California Employment Lawyers Association, Consumer Attorneys of California, and Public Citizen.

At issue is California Code of Civil Procedure Section 1281.96, which requires private arbitration companies to "make available to the public on the Internet Web site [sic] of the private arbitration company ... a single cumulative report" containing 11 different categories of information including the names of the parties, the amount involved, the number of times the "nonconsumer" party has been a party in an arbitration or mediation administered by the reporting company, the result, the arbitrator's fee, the award etc.

This ground-breaking disclosure law is a good idea. The parties and their representatives should have as much information as possible regarding the all aspects of the arbitration process including background on the arbitrator and any other information bearing on the arbitrator's ability to be impartial. After all, the implicit knock on the entire process is that arbitrators can't be as fair as judges, and certainly not as fair as juries. (The Seventh Amendment issue is beyond the scope of this column). Again, anyone who has spent any time at all arguing motions or trying cases realizes that a robe is no guarantee of fairness. Neither is lifetime tenure.

Section 1281.96 insures that much more information is more easily accessible about arbitrators than it is about judges. Where is the database where a lawyer can easily determine how any particular judge has ruled on a summary judgment motion in an employment case? Can counsel pull up a spreadsheet that shows how many times a judge in Los Angeles County Superior Court has ruled for a consumer in a bench trial? Attorneys do have access to this information about arbitrators in California.

The letter to Becerra cites on a 5-year-old report from UC Hastings regarding alleged noncompliance with the statute and claims the results of the report were confirmed by "an in-depth investigation conducted by Al Jazeera" reported on television in 2016. The Al Jazeera America report -- cited in the letter -- aired March 9, 2016, about one month before Al Jazeera America discontinued operations. About a quarter of this report is devoted to a case where a kid died in a Christian "conversion therapy" class and had signed an agreement calling for any dispute to resolved according to the Bible. Like most arbitration agreements appoint Solomon as the arbitrator and require him to cite chapter and verse in any award.

The Consumers for Auto Reliability and Safety Foundation then, apparently, commissioned UC Hastings to update the 2013 report in 2017, and it purportedly cites this report at the very end of its letter to Becerra. Among the claims it makes: "Out of the 32 firms that apparently offer arbitration services in California, only 3 provide information that is readily accessible on the home page of their website and is searchable and sortable as required by law."

I had no idea there were 32 such firms so I started with the ones I know. The firm with which I am associated, ARC has a link entitled "Disclosures" on the home page which easily brings up a searchable and sortable Excel spreadsheet. Judicate West's disclosures can be found by clicking the "Resources" tab on the home page. This firm's report is sortable and searchable right online. The searchable, sortable database for ADR Services, Inc. can be located through the "Services" link on the homepage. The American Arbitration Association's "Consumer and Employment Arbitration Statistics Report" is accessible from the home page link entitled "Practice Areas" and then "Consumer." Maybe it's just me, but I found the JAMS spreadsheet difficult to locate from the home page. But it's on their website at www.jamsadr.com/consumercases. These are the only five providers of arbitration services of which I was aware when I read the letter. Bottom line, the claim about how many firms provide the required report accessible on the home page is wrong. Having disproved the claim, as I thought I would when I read it, I did not bother to check for 27 other firms, all of which are, undoubtedly, minor players in the space.

So let's have that debate about whether arbitration is essential to the continued success of our court system. Let's have the debate about whether arbitration is a "star chamber" where the little guy can never get "justice." Let's have a debate about all of it. But please, if you are going to participate, get your facts straight first.