Appeals of Arbitration Awards by Agreement: Why They Should be Allowed - Dispute Resolution Journal - Vol. 58, No. 2
Richard Solomon is a labor arbitrator, mediator and fact-finder in Santa Barbara, California. He serves on the rosters of the Federal and California Mediation and Conciliation Boards, and on arbitrator panels for a number of large corporations. He began a career in ADR as a part-time labor arbitrator in 1984, while teaching employment law and ADR at Southwestern University Law School. He is also a former practicing lawyer. There has been considerable debate over the issue of whether parties should be able to contract for expanded judicial review, and the courts have reached contrary conclusions on the issue. Richard Solomon, after discussing the split opinions on both sides, explains why he believes that parties should be allowed to contract for expanded review by trial courts.
Originally from Dispute Resolution Journal
If parties to a commercial contract agree to arbitration and allow either party to appeal the arbitrator’s award on expanded grounds, should the trial and appellate courts honor that agreement and hear the appeal? At first blush, one might think that “yes” is the obvious answer, given the importance of party autonomy in arbitration. But the answer, it turns out, is a lot more complicated. The federal courts of appeal are split on this issue (indeed, most of the decisions have been 3-2)1 and at least one California appeals court has weighed in against permitting parties to contract for appellate review.2 Both Hans Smit and Prof. Andreas Lowenfeld have also weighed in against enforcing such agreements.3 This article examines the rationales on both sides of the issue but ultimately takes the pro-enforcement view. It also suggests how a drafter who wants to contract for expanded judicial review might go about it.
There are at least two good reasons to provide for an appeal of an arbitration award. First, arbitrators are human and, like judges, can make mistakes. Providing for broader appellate review provides a safeguard, especially in “public law” disputes (such as those involving federal statutes like the antitrust laws, the Racketeer Influenced and Corrupt Organizations Act, and civil rights statutes), where the reviewing court can not only correct an erroneous legal conclusion, it also can fulfill the traditional role of “interstitial lawmaking.”4 Allowing broader appellate review also might operate as an incentive for the arbitrator to write a bulletproof award.