The inquirer asks whether a party in an arbitration concerning uninsured/underinsured motorist coverage conducted pursuant to the standard automobile insurance arbitration clause, in which one arbitrator is selected by each side, the two arbitrators then selecting a third, may discuss the nature of the claim ex parte with that party's chosen arbitrator prior to the arbitration proceeding. The inquirer states that some clauses incorporate the Uniform Arbitration Act; some incorporate local rules of procedure or state rules of procedure; but none incorporates the rules of the American Arbitration Association.
The Committee considers that the applicable Rules of Professional Conduct, with related statutory and procedural rules provisions, forbid ex parte communications by one party with one of the arbitrators chosen, even though the parties' expectation is that each such arbitrator will favor the point of view of the party choosing him/her. However, the Committee also concludes there is no ethical violation if the ban on ex parte communications is waived by the parties, either explicitly orally or in writing or implicitly by conduct. The Committee considers an explicit waiver in writing the better choice.
1. Rule 3.5 provides that [a] lawyer shall not:
(b) communicate ex parte with [a judge, juror, prospective juror or other official] except as permitted by law; ....
While official is not defined, it seems proper to construe it as including any person acting in an official capacity and fulfilling the functions of the others listed (judge, juror), i.e., acting as a fact-finder and/or adjudicator. So construed, the rule prohibits ex parte communication with an arbitrator.
1. The Uniform Arbitration Act (in Pennsylvania, 42 Pa. C.S. §7314), which the Inquiry states is incorporated into some of the clauses in question, requires that a court vacate an arbitration award where there was ... corruption or misconduct in any of the arbitrators prejudicing the rights of any party. Again, while there is no specific definition of misconduct, a common-sense interpretation would include ex parte communications between a party and an arbitrator.
2. The Inquiry states that some clauses refer to local rules of procedure or state court rules of procedure. Taking the Philadelphia five-county area as an example, none of the local rules speaks to the point raised. However, the state rules provide:
A member of the board of arbitrators who would be disqualified for any reason that would disqualify a judge under the Code of Judicial Conduct shall immediately withdraw an arbitrator.
Pa. R.C.P. 1302 (e).1 The Code of Judicial Conduct provides:
A judge should accord to every person who is legally interested in a proceeding, or his lawyer, full right to be heard according to law, and, except as authorized by law, must not consider ex parte communications concerning a pending proceeding.
Canon 3.A.(4). Further:
A judge should disqualify himself in a proceeding in which his impartiality might reasonably be questioned, including but not to limited to instances where:
(a) he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding;....
1. The Committee found no authority that would authorize an exception to these rules under the rubric as permitted [or authorized] by law.
2. In summary, once a person has been appointed an arbitrator, he/she takes the role and fulfills the functions of judge and juror. He/she is required to decide the case impartially. These principles require a broad reading of Rule 3.5 to forbid ex parte communications with one appointed as an arbitrator.
3. It might be suggested that because each party's expectation is that its chosen arbitrator will be favorable toward his/her selecting party's viewpoint, it follows that each party may communicate with its arbitrator ex parte. The Committee considers this a non sequitur. The right to choose an arbitrator inclined to one's point of view does not include the right to communicate to him/her facts and theories that the other party and the third arbitrator do not hear, any more than the right to choose a juror gives one party the right to sway him/her to that party's side, except in open court.
4. The Committee believes the ban on such communications may be waived. Such waiver may be explicit, orally or in writing, or implicit by conduct. To avoid misunderstanding and unintended violations of the ban, the Committee suggests that a written waiver - by letter of agreement, by party-drafted rules of arbitration or amendment to the arbitration agreement, etc. - is preferable.
5. In the absence of a waiver, or if the arbitrators are selected before a waiver is agreed to between the parties, the question arises whether, and to what extent, a party may discuss the nature of the case with a potential arbitrator whom that party is considering appointing. From a practical standpoint, the party has to be able to say more than, I'm considering appointing you as my arbitrator in a proceeding; can you serve? The Committee believes the parties should ensure they are in agreement on this aspect of the matter as well as on the question of ex parte communications throughout the proceeding. By analogy to a trial setting, provided the parties so agreed one side's attorney could approach a judge to inquire whether he/she could take their case as a special assignment. In that inquiry, however, the likely agreement between the parties will state that the inquiring attorney may say that the case involves a claim based on causes of action A, B, and C, against defenses of F, G, and H and counterclaims based on causes of action X, Y, and Z, against defenses of Q, R, and S - no more; no argument, no recitation of facts, no expression of opinion as to the merits. The Committee views a similar agreement as the practical way to approach this issue in an arbitration setting, and as consistent with the requirements of the Rules of Professional Responsibility.
1. The Explanatory Note to the section of the rules on compulsory arbitration, Rules 1301 et seq., states the matter even more broadly:
Members of the board are to be held to the standards of judicial conduct provided by the Code of Judicial Conduct. They should disqualify themselves as arbitrators where a judge under like circumstances would do so. Most existing local rules are silent on this subject.
Id. note 6.
2. The Committee cites the Code of Judicial Conduct only to demonstrate the additional support it gives for the Committee's conclusion as to arbitrations conducted under clauses incorporating state rules of procedure. The Committee does not mean to suggest that the Code applies to arbitrations conducted under other types of clauses; that question is outside the scope of the inquiry.