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California Ethics Standards for Neutrals

January 23, 2013

Code of Ethics:

Justice Steven Perren made a ruling on Tuesday regarding the code of ethics that should be applied by arbitrators. Standard 8 of the 2002 California Ethics Standards for Neutral Arbitrators in Contractual Arbitrations states that it is the responsibility of the neutral to disclose relationships between the ADR provider and any party or attorney involved in the arbitration.

“While that rule seems harsh, it is necessary to preserve the integrity of the arbitration process.” –Justice Steven Perren

Relevant Case:

Attorney William Ginsburg joined the same ADR provider as the arbitrator that was conducting arbitration for one of the Ginsburg’s cases. While Ginsburg claims he only works as an independent contractor, the arbitrator failed to disclose the relationship during the following two years that the case was active. After a nine-day arbitration, the ruling was in favor of Ginsburg’s client.

The case was then appealed due to the finding of the relationship, with grounds that the arbitrator was conflicted. The Second District Court of Appeal agreed, and Justice Steven Parren ruled to vacate the award.

Perren added in a footnote, “A reasonable person could doubt the ability of Judge Haber to be impartial” under the circumstances.

Source: Bright-Line Rule for Disclosure of ADR Affiliation

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