Screened Selection Offers Best of Both Worlds

We at the CPR Institute are still abuzz over our receipt, earlier this month, of Global Arbitration Review’s (GAR’s) Innovation Award 2016 for our unique Screened Selection Process, which allows parties to select arbitrators without revealing to the neutral which party selected them. We are pleased and proud that our efforts to improve the arbitration process have received the recognition of the ADR community.

What’s so special about the screened selection option, one of many that CPR offers in its Rules? In a recent article published in Law360, CPR’s Olivier Andre and Charles B. Rosenberg of White & Case discuss how the process avoids the “moral hazard” of party-appointed arbitrators who may subtly favor the party that chose them.

How does it work exactly, when this option is selected? CPR carefully vets a list of neutrals based upon the qualifications that the parties require, conflicts, schedules and fees. The parties rank them by preference and include any objections to specific candidates without the neutrals’ knowledge. CPR then uses these rankings and objections to assign each side’s highest ranked neutral and the individual with the highest combined ranking is chosen as Chair. Then the case proceeds using CPR Rules.

Further detail about this Screened Selection Process can be found in the commentary to Rule 5.4:

Rule 5.4 presents a unique “screened” procedure for constituting a three-member Tribunal, two of whom are designated by the parties without knowing which party designated each of them. The procedure is intended to offer the benefits, while avoiding some of the drawbacks, of having party-appointed arbitrators. On the one hand, parties are able to designate arbitrators whom they consider to be well-qualified to sit on the Tribunal. On the other hand, any tendency (subtle or otherwise) of party-appointed arbitrators to favor or advocate the position of the parties who appointed them is avoided because those arbitrators are approached and appointed by CPR rather than the parties and are not told which party designated each of them. The Rules governing ex parte communications (Rule 7.4), challenges (Rule 7.6), and resignations (Rule 7.9) contain specific provisions designed to preserve the “screen” for the party-designated arbitrators under Rule 5.4 throughout the arbitration. The parties may choose the “screened” selection procedure in their pre-dispute arbitration clause (see standard pre-dispute clause), or agree to the screened procedure once a dispute arises.

CPR recognizes that, as a practical matter, some party-designated arbitrators selected pursuant to Rule 5.4 may deduce or learn which parties designated them – i.e., the “screen” may not, in all instances, be perfect. CPR nevertheless believes that the screened procedure is worthy of consideration by parties as a means to enhance the integrity of arbitrations involving party-appointed arbitrators. Any party-designated arbitrator who does, in fact, learn which party appointed him or her should disclose that fact to each of the parties and the other members of the Tribunal in order to ensure a level playing field. In the event an arbitrator discovers who appointed him or her, such knowledge would not be a basis for disqualification or challenge per se, and the arbitration can continue uninterrupted on a non-screened basis.

The Screened Selection Process is just one of the many tools CPR makes available to its users to customize an arbitration process that works best for the parties involved. If you have any questions about the Screened Selection Process or any other aspect of CPR’s rules, please contact Helena Erickson at herickson@cpradr.org.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s