RI-274
June 24, 1996
SYLLABUS
A party nominated arbitrator is not prohibited by ethics rules from communicating with the nominating party about the strategy or merits of a case before, during, and after the arbitration proceeding commences when outside the presence of the other party, or the presence of the other arbitrators. Where arbitration is court mandated, such communications may not be conducted if prohibited by the judge unless stipulated to by the parties.
A party nominated arbitrator is not prohibited by ethics rules from advocating the position of the nominating party during deliberations. However, a lawyer acting as an arbitrator should make sure that such conduct is not prohibited by a judge in the case of court mandated arbitration.
It is incumbent upon a lawyer to determine whether such communications and advocacy are prohibited by the judge before engaging in the conduct.
References: MRPC 3.4(c), 3.5(b).
TEXT
An arbitration panel is comprised of two party nominated arbitrators and a third arbitrator selected by the parties' respective nominees. All the arbitrators are lawyers and the parties are represented by licensed counsel. Two questions have been posed:
- May a party nominated arbitrator communicate with the nominating party about the strategy and merits of a case before, during, and after the arbitration proceeding commences when outside the presence of the other party, or outside the presence of the other arbitrators?
- May a party nominated arbitrator advocate the position of the nominating party during deliberations, or must the arbitrators remain "neutral"?
The Michigan Rules of Professional Conduct do not specifically address the appropriate ethical standards for a lawyer when acting in the capacity of an arbitrator. However, bodies such as the American Arbitration Association and the National Association of Securities Dealers, which themselves operate formal alternative dispute resolution (ADR) systems, typically have published their own codes of ethics or rules for arbitrators. Arbitrators may be lawyers or nonlawyers; to subject lawyers who are acting as arbitrators to the Michigan Rules of Professional Conduct while nonlawyers are not subject to the Michigan Rules of Professional Conduct would, in all likelihood, create conflicting ethical standards in many situations. The questions now before the Committee deal with arbitration panels comprised entirely of lawyers. However, it is not uncommon to have arbitration panels that are comprised of both lawyers and nonlawyers. Any resolution of the pending questions that is only binding upon lawyers may affect the feasibility of having both lawyers and nonlawyers on the same arbitration panel.
MRPC 3.5 only prohibits certain ex parte communications with a court and does not address ex parte communications in the context of ADR systems. Accordingly, the Michigan Rules of Professional Conduct do not prohibit a party nominated arbitrator from communication with the nominating party about the strategy or merits of a case before, during, or after the arbitration proceeding commences when outside the presence of the other party, or the presence of the other arbitrators.
While the Michigan Rules of Professional Conduct do not regulate the conduct of an arbitrator, a lawyer may not embark upon arbitration related activities if so doing will result in a breach of professional duties. A lawyer must not knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exits. MRPC 3.4(c). Under certain circumstances, arbitration may be court mandated. Absent an agreement among the parties, a judge who requires arbitration may prohibit the type of communications at issue. Therefore, it is incumbent upon a lawyer to determine whether such communications are prohibited by the judge before engaging in such communications.
Similarly, the Michigan Rules of Professional Conduct do not prohibit a party nominated arbitrator from advocating the position of the nominating party during deliberations, regardless of the merits of the position of which he or she is advocating. However, where arbitration is court mandated and where the parties have not stipulated to such conduct, a lawyer should first determine whether such conduct is prohibited by the judge.