Raymond Mastrangelo, a Partner with Mound Cotton Wollan Greengrass LLP, moderated a panel discussion with three of the insurance and reinsurance arbitration community’s most experienced and respected arbitrators: Susan Claflin, Claflin Consulting Services LLC, Ann Field, Senior Managing Director of Client Services, Aon, and Howard Page, HR Page Consulting LLP. The panel topic was The Scope of An Arbitration Panel’s Authority, and the issues discussed were of broad interest to anyone participating in a formal dispute resolution proceeding (arbitration, mediation, or litigation) in the current COVID – impacted landscape.
In the first section, the presenters discussed the authority of an arbitral body to order virtual proceedings over a party’s objection. The panelists highlighted recent case law holding that a panel did have authority to order a virtual hearing. Those decisions explained that the power to order virtual proceedings is consistent with the broad control over procedural matters that is generally granted to a sitting panel. This power can of course be modified or constrained by the contract, and may otherwise be subject to specific limits or guidance if the arbitration was convened under rules provided by some governing body (e.g. ARIAS, AAA, FINRA). While generally agreeing that panels do possess the power to order virtual proceedings, our panel cautioned that due process and fundamental fairness should always be taken into consideration when resolving any objection over process. The best practice is for all of the stakeholders to agree on a process before it becomes a disagreement requiring panel intervention.
The benefits and drawbacks of virtual proceedings were discussed throughout the panel presentation. Drawing from personal experience, the panelists shared a general sense that the increased use of video conferencing was a positive development, especially as the technology has matured and arbitrators, lawyers and clients have gained familiarity and confidence with the new medium. There was general agreement that some portions of the arbitral process – organizational meetings in particular – benefit enormously from the efficiency offered by Zoom, Webex, and the like. But the panel also cautioned that a virtual presence might not suit in all occasions. For example, where a panel has to make credibility determinations about a witness, or deal with numerous objections or tricky document issues (situations which may arise at a final evidentiary hearing) careful consideration should be given to whether in-person proceedings might actually be more useful or efficient. If the parties do choose to proceed virtually, investment in high quality equipment – camera, microphones and screens – and someone who can orchestrate it all, can be the difference between an excellent experience and one that is merely tolerable.
Finally, the panelists discussed the authority of an arbitral body to order or award something not specifically provided for in the contract. The speakers agreed that, in the face of contractual silence, a panel has latitude to apply its experience to craft an award that fits the circumstance. For example, many contracts are silent as to the awarding of interest, but the panelists noted a growing consensus among arbitrators that panels have the authority to award interest and are increasingly likely to do so when crafting an award because it is an element of compensatory, rather than punitive, damages. The presenters cautioned that, as with ordering a virtual proceedings to go forward over objection, a panel must always carefully consider not just whether it can, but whether it should, award something not specifically provided in the governing agreement.
AIRROC truly appreciates the time our panel devoted to preparing and presenting this informative discussion. A replay of the presentation is available to members through the AIRROC On Demand platform.