A problem area for arbitrators in any case, as highlighted in the recent UK Supreme Court case of Halliburton v Chubb, (Halliburton v Chubb [2020] UKSC 48 (27 November 2020)) is potential challenge during or after the arbitration, for actual or apparent arbitrator bias. Parties to arbitration cases may also face the disbenefit, from any findings of potential arbitrator bias, of increased time and financial costs, and of valuable arbitral awards being set aside. Against these potential disbenefits however parties also have to consider and balance up the potential positive benefits from using friendly or well-disposed arbitrators and how these correlate with unchallenged cases going statistically more often in the parties’ favor. Similarly arbitrators also have to consider the potential benefit of more repeat instructions from establishing a track record of work in a particular area and with particular client groups.The standard recommended solution for arbitrators is full disclosure of any potential conflicts of interests and proper due diligence and conflict checking. However unlike large client law firms, which have extensive internal risk management departments, new matter acceptance protocols, and conflicts checking procedures, senior arbitrators are often in standalone practice or small firms without these facilities. This in turn means that arbitrators often do their own rudimentary conflicts checks, which may themselves be subjective and prone to bias, and which can leave the arbitrators at risk of unanticipated later accusations of case bias. This is particularly so for arbitration cases with parties that are members of complex international firm groups with diverse and opaque corporate structure and shareholders bases that are hard for non-specialists to fathom.One solution for a potential arbitrator A when requested to arbitrate in a large case by law-firm X, is to ask law-firm X, by agreement between the parties, to provide an independent legal opinion to that arbitrator (e.g. using their independent conflict-checking rather than matter management teams) on the independence from bias of that arbitrator, and to add that cost in to the costs of the arbitration directly. Alternatively A could seek such an opinion from independent law firm Y (just as say arbitration funders often seek opinions about case fundability from independent law firms) and charge the cost to the appointing party directly. Alternatively A could charge her expected average annual conflicts checking charge per case acceptance (i.e. also including the expected costs of those cases not accepted) as an additional expense in the event of accepting a given arbitration case. There could be many other legal opinion commissioning and charging schemes as well.If implemented, then this approach would mean that in the event of any subsequent claim of actual or apparent bias, the arbitrator and client would have at least as much protection as provided by this legal opinion, and the legal opinion process would already have been expected to identify and weed out beforehand any arbitrator candidates where an accusation of actual or apparent bias could be strong. This whole process would also be expected to have the systemic benefits of reducing the expected number of such arbitrator challenges, increasing confidence in the robustness of arbitral decisions to such challenges, and increasing the confidence of both parties and arbitrators to undertake difficult cases, i.e. thereby strengthening the whole arbitral process. Set against these high potential benefits, the additional case costs from the proposed additional legal checks and opinions would be relatively low and so a broader cost-benefit analysis could also support this proposed new best practice move
