Securing an Unbiased Arbitrator Kelly Sofio, attorney at Oskie, Hamilton & Sofio, P.A. and David...

Securing an Unbiased Arbitrator

Kelly Sofio, attorney at Oskie, Hamilton & Sofio, P.A.and

David Larrabee, Senior Risk Management Analyst at the Metropolitan Council

Oskie, Hamilton & Sofio, P.A.TCCA, February 8, 2011

Respect the Strike List!

• Never, ever, ever, ever, ever, ever miss that strike list submission deadline

• Rank strategically• Prior results are perhaps the single most

important factor


Arbitrator “Results” Lists

• MDLA has a great list• All counsel practicing in the no-fault arena

should have access to MDLA’s list or have their own list


Lucky you, you got your #3 choice

• Call opposing counsel and agree to choose your OWN arbitrator or Appeal


AAA Rule 10Qualification of Arbitrator and Disclosure Procedure

(b) No person shall serve as an arbitrator in any arbitration in which he or she has a financial or personal conflict of interest. Under procedures established by the Standing Committee and immediately following appointment to a case, every arbitrator shall be required to disclose any circumstances likely to create a presumption or possibility of bias or conflict that may disqualify the person as a potential arbitrator. Every arbitrator shall supplement the disclosures as circumstances require.

*The fact that an arbitrator or the arbitrator's firm represents automobile accident claimants against insurance companies or self-insureds, including the respondent, does not create a presumption of bias. *It is a financial conflict of interest if, within the last year, the appointed arbitrator or the arbitrator's firm has been hired by the respondent to represent the respondent or respondent's insureds in a dispute for which respondent provides insurance coverage. *It is a financial conflict of interest if the appointed arbitrator is aware of having received referrals within the last year from officers, employees or agents of any entity whose bills are in dispute in the arbitration or the arbitrator's firm has received such referrals and the arbitrator is aware of them.


Carefully review that disclosure and investigate your new arbitrator.

• Does the disclosure match what you know? • Does the arbitrator have active cases against your

client? Have they disclosed as such?• Have you just finished a contentious case with

your new arbitrator?• Do you know that this arbitrator has represented

clients who treated at the provider at issue in the past?


To appeal, or not to appeal?

To get the process moving, you have to start with the AAA. The AAA has strict constraints in which they must operate. They can only remove based on the current Rule 10.


Appeal up the chain.

• AAA will always affirm if you are appealing on Rule 10 (the arbitrator or arbitrator’s firm has an active case against my client) as this is expressly found to be “not a presumption of bias.”

• Standing Committee will affirm as well, in line with new Rule 10.


AAA and Standing Committee do not find grounds for removal. What to do?

• You have the authority to move the “removal” issue to district court. Minn. Stat. §572.10, Subd. 2 (c)(1) gives a party the right to go to district court to have a judge determine if an arbitrator may sit on a case:

After a neutral arbitrator has been selected, any relationship, conflict of interest, or potential conflict of interest that arises must be immediately disclosed by the arbitrator in writing to all parties, and a party may move the district court or the arbitration tribunal for removal of the neutral arbitrator.


But why do district court judges disagree with Rule 10?

Pirsig v. Pleasant Mount Mut. Fire Ins. Co., 512 N.W.2d 342, 344 (Minn.Ct.App. 1994)

A party to an arbitration is entitled to a fair arbitration. It is not enough that the arbitrators be unbiased; they must not appear to be biased.


Cochran v. Metropolitan CouncilJudge John Sommerville

• Arbitrator was removed because he had current cases against the Respondent. Judge Sommerville felt it was a conflict and evidence of evident partiality

• Plaintiff tried to appeal but it was dismissed.


Coty v. Metropolitan CouncilJudge Deborah Hedlund

• Rule 10 did not preclude a finding of bias or conflict of interest.

• An arbitrator with cases against the Respondent was a conflict.

• Public policy favors removal so that the parties can be confident in getting a fair hearing.


St. Julien v. Metropolitan CouncilJudge Lloyd B. Zimmerman

• The AAA arbitrator must be compared to a judge. There is NO reason to have arbitrators have any different standards than those of judges and jurors.

• The judge was not swayed by the argument that no plaintiff’s counsel could serve with this ruling, stating “there would be no shortage of lawyers in MN who could fill the task of arbitrator.”


Selmon v. Metropolitan CouncilJudge Susan Burke

• Statements about IME’s on the arbitrator’s website showed bias.

• As a rule, just Google!


Miranda v. Metropolitan CouncilJudge John Sommerville

• Judge Sommerville indicated at the hearing that he was going to remove the arbitrator in this case as he had before, so Plaintiff’s counsel withdrew their opposition and agreed to a new arbitrator.


Rule 10 was changed!


Barber v. Metropolitan CouncilJudge Denise Reilly

• She confirmed that AAA's NEW Rule 10 “merely removes a presumption of bias; it does not preclude a court from finding that an actual bias or a conflict of interest exists. As a matter of law, Rule 10 does not preclude the Met Council from bringing the current motion.”

• “It is absurd to require a party to both litigate cases against one law firm and have

a member of that firm act as a decision-maker in other cases. Such a scenario presents an obvious appearance of bias under the evident partiality doctrine, and, thus, the Met Council cannot be forced to arbitrate Claimant’s claim before him.”

• “Obvious financial interest in other claims against Respondent gives rise to an

obvious financial conflict.”


Ok. So what does this cost?


Spend a little, potentially save a lot

• In Barber, the arbitrator that was removed historically awarded 100% in favor of plaintiff approximately 90% of what was requested. The Barber claim was $10,000.00. Therefore, Met Council had near 100% certainty that they’d be hit with an award of $9,000.00.

• Once the arbitrator was removed and the new arbitrator was appointed, the ENTIRE CLAIM WAS DENIED.


Thank you for coming!

Email us for copies of these decisions.

Kelly SofioOskie, Hamilton & Sofio, [email protected]


David LarrabeeMetropolitan [email protected]

mailto:[email protected]

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