Explaining Remedies and Closing the Award - Chapter 14 - The Reasoned Arbitration Award in the United States: Its Promise, Problems, Preparation and Preservation
John Burritt McArthur has been serving as an arbitrator since 1994. He has 23 years of experience as an arbitrator, 34 years as a trial lawyer in state and federal courts around the country, and is licensed to practice in Texas, California, and Alaska as well as in a variety of federal courts. He was a Partner at Susman Godfrey LLP, worked for Hosie McArthur LLP for several years, and today has a solo practice that combines arbitration practice with complex commercial trials. He has major litigation and arbitrator experience in five main areas: Energy, Oil and Gas, Electricity; Contract and Tort Business Disputes, including UCC Disputes; Antitrust; Investment Disputes, Fiduciary and Joint Venture Claims, Securities and Insurance. Mr. McArthur's broad work experience is equally suited to business and commercial arbitrations. He has represented plaintiffs and defendants in large, often highly technical commercial cases throughout his career. He has handled federal and state court cases, arbitrations, cases in MDL proceedings and class actions. His clients have ranged from some of the world's largest corporations, including Aetna and British Petroleum, to Alaska native corporations, States, individuals and small businesses. Mr. McArthur has been acknowledged for his litigation experience by his peers. He is currently chair of the LCA's International Institute on Natural Resources, Energy and Environmental Law. He has long held an "av" rating from Martindale-Hubbell. He is a member of the Million-Dollar and Multi-Million-Dollar Advocates Forum. He has published dozens of articles on legal issues, including on energy issues, arbitration, case management, various aspects of deregulation, and antitrust. He has also served as an expert in energy cases.
A statement of his arbitration philosophy can be found at http://www.johnmcarthurlaw.com/arbitration.htmz.
Chapters Nine–Fourteen: How to write a reasoned award. The six chapters in Part Three, the book’s longest section, discuss how to write reasoned awards. They are written primarily, of course, for arbitrators. Because these chapters propose standards for writing adequately reasoned versions of the award’s various sections, they can also assist parties and their counsel when they are considering challenging awards for lack of reasons, or considering defending them against such attacks. The chapters should help courts weighing the merit of attacks that claim the award needed to say more than it did as well.
Chapter Fourteen turns to picking remedies, an often sloppy part of awards because too many arbitrators think they have unbounded remedial powers via the “power to do equity,” or perhaps just run out of steam by the time they reach damages. That last “how to” chapter closes by explaining how to adequately end an award.
from Chapter 14. Explaining Remedies and Closing the Award
Most legal disputes, whether filed in court or in arbitration, focus on liability. The bulk of the evidence usually concerns liability. Not surprisingly, then, the discussion in Chapters Nine through Fourteen on the building blocks of reasoned awards has focused primarily upon liability – explaining the decisions made on claims, counterclaims, and defenses – and not remedies. This chapter discusses remedies and finalizing the award.
When a party establishes liability, the appropriate remedy can be obvious and noncontroversial. If you breached a contract, the measure of the contract expectancy may flow naturally and obviously from the contract promises. If you breached a contract to sell something, for instance, you likely owe specific performance or the value of the undelivered goods or services. If you made false representations – lied to someone – and your false and misleading statements persuaded them to buy 1000 shares of stock, you may need to compensate them for the sometimes easily measured loss, but sometimes very hard to estimate loss, of getting shares in an entity not at all like the one promised. Or you may be ordered to take the stock back and repay what you received for the stock, rescinding the deal you fraudulently induced.
In other cases, damages and other remedies are much disputed and determining them is complex. Frequently, experts are required to transform core facts into an appropriate measure of recovery.
The closing portions of awards too often exude a sense that the arbitrators exhausted themselves by deciding who won and, by the time they got to remedies, had too little energy to explain much about the remedies. Or, perhaps, they reflect the principle oft-cited in cases and treatises, and stated in the Revised Uniform Arbitration Act (RUAA) that arbitrators can decide on remedies outside of the law; even the major provider rules give arbitrators broad power to do equity on remedies. After all, even the Supreme Court has held, in reversing a vacatur, that the arbitrator “is to bring his informed judgment to bear in order to reach a fair solution to a problem. This is especially true when it comes to formulating remedies.”