Be careful of the substantive expert arbitrator

All too often, when selecting arbitrators, counsel will seek an arbitrator who has the most substantive experience in a given topic area. While, at times, this is certainly a good idea, at other times, it is not. Before automatically defaulting to picking a substantive expert, skilled counsel must do a careful and thorough evaluation of the case to determine whether or not such expertise is beneficial or detrimental to the client’s interests. 

Over a decade ago, I represented a plaintiff in a multi-year, multi-state arbitration that settled after forty days of hearing. At the time the panel was chosen, there were approximately eleven plaintiffs in the case, all represented by different counsel, and all of whom worked together to thoroughly investigate and vet the proposed panelists. Working cooperatively, each plaintiff counsel was assigned one or two panelists for due diligence and a series of conference calls was held amongst plaintiffs’ counsel to discuss the results of the investigation. As a result, the three panelists all had a high degree of substantive knowledge in the key areas of litigation. When the defense began presenting its case, only one witness (the key defense witness) testified before it became clear that the substantive expertise held by the panel was causing it to view the defense’s case with extreme skepticism. A settlement was promptly reached. That settlement was a result of the panel’s ability to key in on the paramount issues and, through the panel’s own pointed questioning, it quickly became evident that the defendant needed to rethink its resistance towards settlement.

By contrast, though, was a situation where I was retained as an arbitrator due to the significant knowledge I had in the underlying specific type of construction. My name was suggested by defense counsel for this simple breach of contract case. It took over twelve hours to arbitrate the case, and, in the end, I found for the plaintiff. My knowledge of the field allowed me to key in on the paramount issues and it became readily apparent that the defendant was at fault in the situation. A decision was rendered in favor of the plaintiff and against the defendant.

Had the defendant’s counsel taken a closer look at his case and understood the nuances in the facts, he would have been better off suggesting an arbitrator who had less substantive knowledge in the area. In the words of the Grail Knight in Indiana Jones and the Last Crusade, “He chose…poorly.”