Arbitrators should reach and memorialize clear agreements with all parties concerning payment for their professional services and expenses, invoice the parties in accordance therewith, and promptly inform the parties when fee estimates need to be revised.
I. ARBITRATOR FEES
A. The Importance of Clear Initial Agreements
It is important that the agreements and understandings between arbitrators and parties regarding billing rates, deposits for the payment of arbitrator fees and expenses, and disbursements from deposited funds be clear from the outset.
Issues concerning arbitrator compensation and reimbursement for expenses are inherent to the arbitration process and, thus, must be addressed by both the parties and the arbitrators. Many of the difficulties encountered in this area usually can be averted by employing due care and transparency from the very beginning of the arbitration process.
It is critically important for arbitrators and administering organizations to memorialize, at the outset of the arbitration, the parties’ agreement to all terms and arrangements for professional services, including the rate at which arbitrators will be paid for hearings and for work outside of hearings, when invoices will be issued and when payment is due, any amounts that may be charged if the hearing is cancelled or postponed, how far in advance a hearing may be cancelled or postponed without incurring such charges, any amounts to be charged by the arbitrators or an administering organization for case administration, and the initial allocation of all charges among the parties. In administered cases, these understandings normally will be reached in communications in which the administering institution serves as an intermediary between the arbitrators and the parties. In ad hoc cases, the communications will be directly between the arbitrators and the parties.