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The Code of Ethics for CADRe Arbitrators
This Code of Ethics for CADRe Arbitrators is modeled
after the Code of Ethics for Arbitrators in Commercial Disputes
that was prepared in 1977 by a joint committee of the American Arbitration
Association and the American Bar Association; it has been approved and
recommended by both organizations. See also Code
of Civil Procedure Section 1281.85, et. seq.
Preamble
The use of arbitration to resolve a wide
variety of disputes has grown extensively and forms a significant part
of the system of justice on which our society relies for fair determination
of legal rights. Persons who act as arbitrators therefore undertake serious
responsibilities to the public as well as to the parties. Those responsibilities
include important ethical obligations.
There are many different types of arbitration.
Some cases are conducted under arbitration rules established by various
organizations and trade associations, while others are conducted without
such rules. Although most cases are arbitrated pursuant to voluntary agreement
of the parties, certain types of disputes are submitted to arbitration
by reason of particular laws. This code is intended to apply to all such
proceedings in which disputes or claims are submitted for decision to
one or more arbitrators appointed in a manner provided by an agreement
of the parties, by applicable arbitration rules, or by law. In all such
cases, the persons who have the power to decide should observe fundamental
standards of ethical conduct. In this code all such persons are called
"arbitrators" although, in some types of cases, they might be
called "umpires" or have some other title.
Various aspects of the conduct of arbitrators,
including some matters covered by this code, may be governed by agreements
of the parties, by arbitration rules to which the parties have agreed,
or by applicable law. This code does not take the place of or supersede
such agreements, rules, or laws and does not establish new or additional
grounds for judicial review of arbitration awards.
Arbitrators, like judges, have the power
to decide cases. However, unlike full-time judges, arbitrators are usually
engaged in other occupations before, during, and after the time that they
serve as arbitrators. Often, arbitrators are purposely chosen from the
same trade or industry as the parties in order to bring special knowledge
to the task of deciding. This code recognizes these fundamental differences
between arbitrators and judges.
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CANON I.
AN ARBITRATOR SHOULD UPHOLD THE INTEGRITY AND FAIRNESS
OF THE ARBITRATION PROCESS.
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Fair and just processes for resolving
disputes are indispensable in our society. A arbitration is an important
method for deciding many types of disputes. In order for arbitration
to be effective, there must be broad public confidence in the integrity
and fairness of the process. Therefore, an arbitrator has a responsibility
not only to the parties but also to the process of arbitration itself,
and must observe high standards of conduct so that the integrity and
fairness of the process will be preserved. Accordingly, an arbitrator
should recognize a responsibility to the public, to the parties whose
rights will be decided, and to all other participants in the proceeding.
The provisions of this code should be construed and applied to further
these objectives.
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It is inconsistent with the integrity
of the arbitration process for persons to solicit appointment for
themselves. However, a person may indicate a general willingness to
serve as an arbitrator.
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Persons should accept appointment
as arbitrators only if they believe that they can be available to
conduct the arbitration promptly.
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After accepting appointment and while
serving as an arbitrator, a person should avoid entering into any
financial, business, professional, family or social relationship,
or acquiring any financial or personal interest that is likely to
affect impartiality or might reasonably create the appearance of partiality
or bias. For a reasonable period of time after the decision of a case,
persons who have served as arbitrators should avoid entering into
any such relationship, or acquiring any such interest, in circumstances
that might reasonably create the appearance that they had been influenced
in the arbitration by the anticipation or expectation of the relationship
or interest.
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Arbitrators should conduct themselves
in a way that is fair to all parties and should not be swayed by outside
pressure, by public clamor, by fear of criticism or by self-interest.
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When an arbitrator's authority is
derived from an agreement of the parties, the arbitrator should neither
exceed that authority nor do less than is required to exercise that
authority completely. Where the agreement of the parties sets forth
procedures to be followed in conducting the arbitration or refers
to rules to be followed, it is the obligation of the arbitrator to
comply with such procedures or rules.
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An arbitrator should make all reasonable
efforts to prevent delaying tactics, harassment of parties or other
participants, or other abuse or disruption of the arbitration process.
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The ethical obligations of an arbitrator
begin upon acceptance of the appointment and continue throughout all
stages of the proceeding. In addition, wherever specifically set forth
in this code, certain ethical obligations begin as soon as a person
is requested to serve as an arbitrator and certain ethical obligations
continue even after the decision in the case has been given to the
parties.
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CANON II.
AN ARBITRATOR SHOULD DISCLOSE ANY INTEREST OR RELATIONSHIP
LIKELY TO AFFECT IMPARTIALITY OR THAT MIGHT CREATE AN APPEARANCE OF PARTIALITY
OR BIAS.
Introductory Note
This code reflects the prevailing principle
that arbitrators should disclose the existence of interests or relationships
that are likely to affect their impartiality or that might reasonably
create an appearance that they are biased against one party or favorable
to another. These provisions are intended to be applied realistically
so that the burden of detailed disclosure does not become so great that
it is impractical for persons in the business world to be arbitrators,
depriving parties of arbitrators who might be best qualified to decide
particular types of cases.
This code does not limit the freedom of
parties to agree on whomever they choose as an arbitrator. When parties,
with knowledge of a person's interests and relationships, nevertheless
desire that individual to serve as an arbitrator, that person may properly
serve.
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Disclosure
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Persons who are requested to serve
as arbitrators should, before accepting, disclose
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any direct or indirect financial
or personal interest in the outcome of the arbitration;
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any existing or past financial,
business, professional, family or social relationships that are
likely to affect impartiality or might reasonably create an appearance
of partiality or bias. Persons requested to serve as arbitrators
should disclose any such relationships that they personally have
with any party or its lawyer, or with any individual whom they
have been told will be a witness. They should also disclose any
such relationships involving members of their families or their
current employers, partners or business associates.
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Persons who are requested to accept
appointment as arbitrators should make a reasonable effort to inform
themselves of any interests or relationships described in the preceding
paragraph A.
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The obligation to disclose interests
or relationships described in the preceding paragraph A is a continuing
duty that requires a person who accepts appointment as an arbitrator
to disclose, at any stage of the arbitration, any such interests or
relationships that may arise, or are recalled or discovered.
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Disclosure should be made to all parties
unless other procedures for disclosure are provided in the rules or
practices of an institution that is administering the arbitration.
Where more than one arbitrator has been appointed, each should inform
the others of the interests and relationships that have been disclosed.
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In the event that an arbitrator is
requested by all parties to withdraw, the arbitrator should do so.
In the event that an arbitrator is requested to withdraw by fewer
than all of the parties because of alleged partiality or bias, the
arbitrator should withdraw unless either of the following circumstances
exists.
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If an agreement of the parties,
or arbitration rules agreed to by the parties, establishes procedures
for determining challenges to arbitrators, then those procedures
should be followed; or
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if the arbitrator, after carefully
considering the matter, determines that the reason for the challenge
is not substantial, and that he or she can nevertheless act and
decide the case impartially and fairly, and that withdrawal would
cause unfair delay or expense to another party or would be contrary
to the ends of justice.
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CANON III.
AN ARBITRATOR IN COMMUNICATING WITH THE PARTIES SHOULD
AVOID IMPROPRIETY OR THE APPEARANCE OF IMPROPRIETY.
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If an agreement of the parties or
applicable arbitration rules referred to in that agreement, establishes
the manner or content of communications between the arbitrator and
the parties, the arbitrator should follow those procedures notwithstanding
any contrary provision of the following paragraphs B and C.
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Unless otherwise provided in applicable
arbitration rules or in an agreement of the parties, arbitrators should
not discuss a case with any party in the absence of each other party,
except in any of the following circumstances.
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Discussions may be had with a
party concerning such matters as setting the time and place of
hearings or making other arrangements for the conduct of the proceedings.
However, the arbitrator should promptly inform each other party
of the discussion and should not make any final determination
concerning the matter discussed before giving each absent party
an opportunity to express its views.
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If a party fails to be present
at a hearing after having been given due notice, the arbitrator
may discuss the case with any party who is present.
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If all parties request or consent
to it, such discussion may take place.
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Unless otherwise provided in applicable
arbitration rules or in an agreement of the parties, whenever an arbitrator
communicates in writing with one party, the arbitrator should at the
same time send a copy of the communication to each other party. Whenever
the arbitrator receives any written communication concerning the case
from one party that has not already been sent to each other party,
the arbitrator should do so.
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CANON IV.
AN ARBITRATOR SHOULD CONDUCT THE PROCEEDINGS FAIRLY
AND DILIGENTLY.
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An arbitrator should conduct the proceedings
in an evenhanded manner and treat all parties with equality and fairness
at all stages of the proceedings.
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An arbitrator should perform duties
diligently and conclude the case as promptly as the circumstances
reasonably permit.
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An arbitrator should be patient and
courteous to the parties, to their lawyers and to the witnesses and
should encourage similar conduct by all participants in the proceedings.
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Unless otherwise agreed by the parties
or provided in arbitration rules agreed to by the parties, an arbitrator
should accord to all parties the right to appear in person and to
be heard after due notice of the time and place of hearing.
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An arbitrator should not deny any
party the opportunity to be represented by counsel.
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If a party fails to appear after due
notice, an arbitrator should proceed with the arbitration when authorized
to do so by the agreement of the parties, the rules agreed to by the
parties or by law. However, an arbitrator should do so only after
receiving assurance that notice has been given to the absent party.
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When an arbitrator determines that
more information than has been presented by the parties is required
to decide the case, it is not improper for the arbitrator to ask questions,
call witnesses, and request documents or other evidence.
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It is not improper for an arbitrator
to suggest to the parties that they discuss the possibility of settlement
of the case. However, an arbitrator should not be present or otherwise
participate in the settlement discussions unless requested to do so
by all parties. An arbitrator should not exert pressure on any party
to settle.
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Nothing in this code is intended to
prevent a person from acting as a mediator or conciliator of a dispute
in which s/he has been appointed as arbitrator, if requested to do
so by all parties or where authorized or required to do so by applicable
laws or rules.
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When there is more than one arbitrator,
the arbitrators should afford each other the full opportunity to participate
in all aspects of the proceedings.
CANON V.
AN ARBITRATOR SHOULD MAKE DECISIONS IN A JUST, INDEPENDENT
AND DELIBERATE MANNER.
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An arbitrator should, after careful
deliberation, decide all issues submitted for determination. An arbitrator
should decide no other issues.
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An arbitrator should decide all matters
justly, exercising independent judgment, and should not permit outside
pressure to affect the decision.
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An arbitrator should not delegate
the duty to decide to any other person.
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In the event that all parties agree
upon a settlement of issues in dispute and request an arbitrator to
embody that agreement in an award, an arbitrator may do so, but is
not required to do so unless satisfied with the propriety of the terms
of settlement. Whenever an arbitrator embodies a settlement by the
parties in an award, the arbitrator should state in the award that
it is based on an agreement of the parties.
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CANON VI.
AN ARBITRATOR SHOULD BE FAITHFUL TO THE RELATIONSHIP
OF TRUST AND CONFIDENTIALITY INHERENT IN THAT OFFICE.
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An arbitrator is in a relationship
of trust to the parties and should not, at any time, use confidential
information acquired during the arbitration proceeding to gain personal
advantage or advantage for others, or to affect adversely the interest
of another.
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Unless otherwise agreed by the parties,
or required by applicable rules or law, an arbitrator should keep
confidential all matters relating to the arbitration proceedings and
decision.
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It is not proper at any time for an
arbitrator to inform anyone of the decision in advance of the time
it is given to all parties. In a case in which there is more than
one arbitrator, it is not proper at any time for an arbitrator to
inform anyone concerning the deliberations of the arbitrators. After
an arbitration award has been made, it is not proper for an arbitrator
to assist in post-arbitral proceedings, except as is required by law.
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In many types of arbitration it is
customary practice for the arbitrators to serve without pay. However,
in some types of cases it is customary for arbitrators to receive
compensation for their services and reimbursement for their expenses.
In cases in which any such payments are to be made, all persons who
are requested to serve, or who are serving as arbitrators, should
be governed by the same high standards of integrity and fairness as
apply to their other activities in the case. Accordingly, such persons
should scrupulously avoid bargaining with parties over the amount
of payments or engaging in any communications concerning payments
that would create an appearance of coercion or other impropriety.
In the absence of governing provisions in the agreement of the parties
or in rules agreed to by the parties or in applicable law, certain
practices relating to payments are generally recognized as being preferable
in order to preserve the integrity and fairness of the arbitration
process. These practices include the following:
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It is preferable that before the
arbitrator finally accepts appointment the basis of payment be
established and that all parties be informed thereof in writing.
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In cases conducted under the rules
or administration of an institution that is available to assist
in making arrangements for payments, the payments should be arranged
by the institution to avoid the necessity for communication by
the arbitrators directly with the parties concerning the subject.
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In cases where no institution
is available to assist in making arrangement for payments, it
is preferable that any discussions with arbitrators concerning
payments should take place in the presence of all parties.
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CANON VII.
A WRITTEN OPINION
Unless otherwise agreed to by the
parties, the arbitrator shall provide to the parties a written, confidential
opinion explaining the award. To the extent allowed, such an opinion shall
model court published opinions in form and style.
Obligations under Canon I
Nonneutral party-appointed arbitrators
should observe all of the obligations of Canon I to uphold the integrity
and fairness of the arbitration process, subject only to the following
provisions.
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Nonneutral arbitrators may be predisposed
toward the party who appointed them but in all other respects are
obligated to act in good faith and with integrity and fairness. For
example, nonneutral arbitrators should not engage in delaying tactics
or harassment of any party or witness and should not knowingly make
untrue or misleading statements to the other arbitrators.
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The provisions of Canon I.D relating
to relationships and interests are not applicable to nonneutral arbitrators.
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Obligations under Canon II
Nonneutral party-appointed arbitrators should disclose
to all parties, and to the other arbitrators, all interests and relationships
that Canon II requires be disclosed. Disclosure as required by Canon II
is for the benefit not only of the party who appointed the nonneutral
arbitrator, but also for the benefit of the other parties and arbitrators
so that they may know of any bias that may exist or appear to exist. However,
this obligation is subject to the following provisions.
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Disclosure by nonneutral arbitrators
should be sufficient to describe the general nature and scope of
any interest or relationship, but need not include as detailed information
as is expected from persons appointed as neutral arbitrators.
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Nonneutral arbitrators are not obliged
to withdraw if requested to do so by the party who did not appoint
them, notwithstanding the provisions of Canon II.E.
Obligations under Canon III
Nonneutral party-appointed arbitrators should observe
all of the obligations of Canon III concerning communications with the
parties, subject only to the following provisions.
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In an arbitration in which the two
party-appointed arbitrators are expected to appoint the third arbitrator,
nonneutral arbitrators may consult with the party who appointed
them concerning the acceptability of persons under consideration
for appointment as the third arbitrator.
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Nonneutral arbitrators may communicate
with the party who appointed them concerning any other aspect of
the case, provided they first inform the other arbitrators and the
parties that they intend to do so. If such communication occurred
prior to the time the person was appointed as arbitrator, or prior
to the first hearing or other meeting of the parties with the arbitrators,
the nonneutral arbitrator should, at the first hearing or meeting,
disclose the fact that such communication has taken place. In complying
with the provisions of this paragraph, it is sufficient that there
be disclosure of the fact that such communication has occurred without
disclosing the content of the communication. It is also sufficient
to disclose at any time the intention to follow the procedure of
having such communications in the future and there is no requirement
thereafter that there be disclosure before each separate occasion
on which such a communication occurs.
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When nonneutral arbitrators communicate
in writing with the party who appointed them concerning any matter
as to which communication is permitted under this code, they are
not required to send copies of any such written communication to
any other party or arbitrator.
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Obligations under Canon IV
Nonneutral party-appointed arbitrators should observe
all of the obligations of Canon IV to conduct the proceedings fairly and
diligently.
Obligations under Canon V
Nonneutral party-appointed arbitrators should observe
all of the obligations of Canon V concerning making decisions, subject
only to the following provision.
Obligations under Canon VI
Nonneutral party-appointed arbitrators should observe
all of the obligations of Canon VI to be faithful to the relationship
of trust inherent in the office of arbitrator, subject only to the following
provision.
Go to CDRC Standards
of Practice for California Mediators
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