Sanctions and Arbitration Proceedings - Chapter 27 - AAA Handbook on Commercial Arbitration, Third Edition
Georgene M. Vairo is the David P. Leonard Professor of Law at Loyola Law School in Los Angeles. She earned a B.A. from Sweet Briar College, a M.Ed. with Distinction from the University of Virginia and a cum laude J.D. from Fordham University. Vairo is a Member of the Board of Editors of MOORE’S FEDERAL PRACTICE and is the author of RULE 11 SANCTIONS: CASE LAW PERSPECTIVES AND PREVENTIVE MEASURES (3D ED. 2003). The author is grateful to Megan Whipp, Loyola Law School, Class of 2017, for her excellent research assistant.
SANCTIONS AND ARBITRATION PROCEEDINGS
Georgene M. Vairo
Time and again, we hear lawyers and judges complain about frivolous litigation and abusive conduct by counsel. This article discusses the sanctions available to curb abusive behavior during arbitration proceedings.
Since the adoption in 1983 of amended Federal Rule of Civil Procedure 11, lawyers have become increasingly aware of the availability of sanctions. In fact, sanctions awarded under Rule 11 were so numerous that the rule was toned down by amendments adopted in 1993. Nonetheless, Rule 11—together with other federal authority for imposing sanctions, such as 28 U.S.C. § 1927, the court’s inherent power, and Federal Rule of Appellate Procedure 38—continues to be a potent tool. Most states have adopted a similar rule to punish those who assert frivolous legal or factual positions or engage in abusive conduct.
Lawyers and arbitrators are not immune from experiencing less than professional behavior in the ADR context. For example, an attorney or party may behave inappropriately during an arbitration proceeding or engage in abusive conduct or misuse the judicial system in an action arising out of an arbitration. Often a party to an arbitration agreement will attempt to use the judicial system to avoid or end-run the arbitration.
Whether sanctions are available to punish abusive behavior depends upon the forum where the conduct occurs. If abusive conduct occurs in the judicial arena, the court’s sanctioning power may be brought to bear. No agreement among the parties is required. If such behavior occurs in an arbitration proceeding, the arbitrator may sanction the party responsible for such conduct only if the parties’ agreement explicitly or implicitly authorizes the arbitrator to impose sanctions. It is generally thought that an arbitrator does not have this power absent a contractual provision. Since the arbitrator’s authority to impose sanctions is completely dependent on the arbitration agreement, it follows that if the agreement is silent as to sanctions, the arbitrator may not impose them.