Tcl - Arbitrator and Mediator Disclosure Obligations in Colorado - September 2005 - Alternative Dispute Resolution Column
| Publication year | 2005 |
| Pages | 53 |
| Citation | Vol. 34 No. 9 Pg. 53 |
2005, September, Pg. 53. TCL - Arbitrator and Mediator Disclosure Obligations in Colorado - September 2005 - Alternative Dispute Resolution Column
September 2005
Vol. 34, No. 9 [Page 53]
Alternative Dispute Resolution Column
Arbitrator and Mediator Disclosure Obligations in Colorado
by O. Russel Murray
This column is sponsored by the CBA Alternative Dispute Resolution Committee. The articles printed here describe recent developments in the evolving field of ADR, with a particular focus on issues affecting Colorado attorneys and ADR providers.
Column Editors:
Jonathan Boonin of Warren & Boonin LLP, Boulder - (303) 413-1111, jboonin@warren-boonin. com; James L. Stone of JAMS, Denver - (303) 534-1254, jstone1672@aol.com
About The Author:
This month's article was written by O. Russel Murray, Louisville, a member of Garlin Driscoll & Murray, LLC - - (303) 926-4222, orm@gdmlaw.net. The author's practice includes mediation and arbitration, both as a neutral and as an advocate.
This article addresses the increasing obligations of arbitrators and mediators in Colorado to investigate and disclose business relationships and other information that may be perceived as affecting their impartiality. It also discusses the effects of failing to make such disclosures.
Arbitrators and mediators in Colorado have long been required to be unbiased and impartial - in short, "neutral."1 Nonetheless, Colorado is following a national trend toward requiring more than neutrality. Recent legislation for arbitrators, as well as voluntary standards of conduct and proposed legislation for mediators, is prompting arbitrators and mediators to take affirmative steps to disclose all information that a reasonable person may conclude could affect their impartiality.
The failure of arbitrators and mediators to make these disclosures may jeopardize the enforceability of the arbitration award or mediated agreement. This may apply even where the arbitrator or mediator otherwise was neutral or was unaware of the undisclosed, yet compromising facts.
This article reviews disclosure provisions that impact arbitrators and mediators practicing in Colorado, including statutory requirements, case law, and voluntary standards. The article also discusses the growing obligation of arbitrators and mediators to make reasonable investigation into matters that should be disclosed and the potential effects of their failure to make such disclosures.
Disclosure Issues: Overview
The obligations to make disclosures differ for arbitrators and mediators in Colorado. Below is a short overview of the respective requirements; a longer discussion follows. (See also the summary of disclosure requirements in the accompanying sidebar.)
Arbitrator Disclosures
Beginning in 1994, a handful of Colorado cases imposed an obligation on arbitrators to disclose "any potential conflict which could constitute evident partiality,"2 including "a substantial business relationship" with a party.3 Nevertheless, to date, no reported Colorado case has set aside an award on the ground of failure to disclose, absent a further showing of "evident partiality" or bias affecting the award.4 In other words, although an obligation to disclose certain facts was set down by the courts, a failure to disclose alone has been of little consequence.
In 2004, the Colorado legislature adopted a revised and updated Colorado Uniform Arbitration Act ("CUAA").5 CUAA requires that, before accepting an appointment, an arbitrator must disclose to all parties "any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding."6
An arbitrator who fails to make required disclosures under CUAA "shall be presumed to act with evident partiality."7 Thus, the statute shifts the burden of proof on the issue of "evident partiality" to the party seeking to enforce the award. Some cases in other jurisdictions have gone further, holding that the failure to make a required disclosure is conclusive - requiring vacatur of the arbitration award.8
Moreover, an arbitrator cannot circumvent the disclosure obligations by claiming not to have known of, or not to have remembered, a past affiliation or interest requiring disclosure. This is because, before making disclosures, the arbitrator also has a statutory duty to make "a reasonable inquiry."9 Thus, an arbitrator may be expected not only to investigate, but also to keep detailed records of past arbitrations, mediations, and other business dealings such that reasonable inquiry might readily and accurately be made.10
Mediator Disclosures
For mediators, the issue of disclosure is less clear than for arbitrators. Colorado does not have mandatory disclosure requirements for mediators, either statutory or case law-based. Further, even nationally, there are few cases to be found that challenge mediated agreements on the ground of failure of an arbitrator to disclose pertinent information to the parties.
Nonetheless, the voluntary Colorado Model Standards of Conduct for Mediators ("Colorado Model Standards") state that a "mediator shall advise all parties of any prior or existing relationships or other circumstances giving the appearance of or creating a possible bias, prejudice, or partiality."11 In addition, the American Bar Association's Model Standards of Conduct for Mediators ("ABA Model Standards") state, "A mediator shall disclose all actual and potential conflicts of interest reasonably known to the mediator."12
Although both model standards for mediators are voluntary, many mediators in Colorado may have agreed to follow such standards by becoming members of organizations that have adopted or endorsed them. Where an agreement between parties to mediate provides that mediation will be conducted by a particular organization, the parties may have reason to expect that standards adopted by that organization will be followed.
In setting aside awards in arbitration proceedings, courts have considered even the voluntary standards established by alternative dispute resolution organizations.13 Voluntary standards also may be considered where a mediated agreement is being challenged for a mediator's failure to follow procedures.
In 2001, the National Conference of Commissioners on Uniform State Laws approved and recommended for enactment in all states the Uniform Mediation Act ("UMA").14 The Colorado legislature considered, but did not enact, the UMA in 2004. The UMA would impose disclosure obligations on mediators nearly identical to those now imposed in Colorado on arbitrators by CUAA.15 Further, under the UMA, a mediator who violates the disclosure requirements would be denied the protection of the UMA's privilege provisions.16 An agreement reached through mediation under the UMA also could be expected to have an increased risk of being set aside where pertinent disclosures were not made.
Voluntary Standards: Arbitrator and Mediator Disclosures
Many professional organizations provide disclosure standards for their members. Following is a sampling of guidelines that Colorado practitioners may follow.
Disclosure GuidelinesOrganization that Developed or EndorsedApplicability
Code of Ethics for Arbitrators in Commercial
American Bar Association ("ABA") Arbitrators
International Dispute Resolution Procedures:
(International Division of the AAA) Arbitrators
Commercial Arbitration Rules and Mediation
Arbitrators and Mediators
International Dispute Resolution Procedures:
(International Division of the AAA) Mediators
Mediator Ethics Guidelines Judicial Arbitration and Mediation Services,
American Bar Association's Model Standards of
Colorado Model Standards of Conduct for
Institute, Colorado Department of Law, Colorado Council of Mediators, Office of Dispute Resolution
of the Colorado Judicial Department Mediators
Mediator's Revised Code of
Disclosure Standards for Arbitrators
The question of what disclosure standards apply to arbitrators in Colorado does not have a simple - or a single - answer. The answer may depend on whether: (1) enforcement of the award...
To continue reading
Request your trial