Advancements in Arbitral Immunity and Judicial Review of Arbitral Awards Create Ethical Loopholes in Arbitration

Abstract

Compared to the litigation forum, arbitration is intended to be a flexible, efficient, and private method of rights-based dispute resolution. Because arbitration is a private system of dispute resolution, it is largely (and purposefully) unregulated. The perjury, tampering, and other criminal laws dealing with the administration of justice simply do not apply to arbitration as they are currently written. In addition, the expansion of judicial immunity to the arbitral forum has caused a potential ethical “loophole” within arbitration. In other words, when arbitration parties, witnesses, and attorneys engage in conduct that would be criminally punishable in litigation in the arbitral forum, those wrongdoers are not only free from criminal liability but also free from civil liability. While attorneys are still subject to ethical codes that would prohibit them from engaging in this type of wrongdoing, non-attorney participants are largely shielded from liability. This Chapter suggests two ways to close the loopholes. First, this Chapter recommends extending the criminal laws of perjury, tampering, and other crimes against the administration of justice to the arbitral forum. Second, this Chapter recommends that the courts employ a consistent standard of review to address better issues of participant wrongdoing.