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FMG Law Blog Line

Do Arbitrator’s Always “Split the Baby?” Not this one.

Posted on: July 29th, 2013

By: Kamy Molavi

In 22 years as a construction lawyer after six years working as a construction project manager, I have heard and read numerous stories about arbitration awards that seems to represent a rough midpoint between the demands and expectations of each side.  The implication of these stories is that the arbitrators or the panel were universally lazy, and merely – and in a decidedly un-Solomonic manner – “split the baby” instead of truly analyzing the merits.  Based on my own experience as an advocate and as an arbitrator, I am not sure the allegation has merit.

Undeniably, in some of my arbitrations the outcome was very near the halfway point between where my client wanted to be and what the other parties sought.  On the other hand, in several of my contested cases the arbitrator(s) not only ruled completely in my client’s favor, but awarded attorneys’ fees.  The baby’s toes and fingers were intact.

Moreover, in each case where I have served as an arbitrator, I started the hearing quite prepared to award every part of a remedy sought if the evidence supported it, or deny the whole if it did not.  In fact, and to my great consternation and almost horror, in a recent case my utter open-mindedness afflicted me even after the evidence was closed!

In my deliberations as an arbitrator, I always spend hours reading the documents in evidence and reviewing my detailed notes, all the while preparing an Excel chart to track material evidence, arguments presented by the parties regarding each issue and each element of damages, as well as my observations, thoughts, and conclusions.  It is not an exaggeration to state that I agonize over each item, often revising my conclusions several times before I consider the award final.  While other arbitrators may utilize different or other techniques, I suspect most arbitrators approach their jobs in a serious and conscientious manner.

To be sure, sometimes an arbitration award appears to land somewhere between the contradictory demands and expectations of the opponents, but is that really surprising?  Construction disputes often involve numerous and disparate claims – the fact that one item of work was defective does not mean any other was, and the determination that one delay was excusable does not dictate the same conclusion regarding another.  Construction cases (whether in arbitration or not) sometimes are conglomerations are multiple disputes that may not be materially similar or related to each other.  Each claim must be evaluated on its own merits, as must each element of damages attributed to it.  Given this composition of their cases, parties should not automatically accuse their arbitrators of indolence merely because the award contains only a part of what they sought.

Am I saying that an award universally represents the arbitrator’s absolute certainty regarding every dime awarded or denied?  Of course not.  Time limitations, gaps in evidence, and other factors render that impossible.  But an award that may appear to be a facile splitting of claims may not be so, and probably is not.  For a survey regarding this issue, click here.

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