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Arbitrator Authority

Friday, April 18, 2025 1:39 PM | Anonymous

Elevator Speech ...

If in the course of an arbitration hearing the evidence shows that there is an open and shut statutory defense to the claim which would warrant dismissal, but the Respondent has completely ignored it, should the arbitrator raise the issue? 

What are your thoughts?

Comments

  • Friday, April 18, 2025 1:55 PM | Craig Nierman
    Not generally as defenses are waivable.
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    • Saturday, April 19, 2025 6:00 PM | Edwin H, Stern
      I believe so. In order to appropriately decide an arbitration, as any judicial proceeding, I think that the arbitrator has an obligation to raise a defense or any issue that he or she thinks necessary for an appropriate disposition of the case pursuant to established law. Thus, an issue should be raised that the arbitrator knows to be dispositive and counsel does not do so, at least where the issue is jurisdictional or not subject to arguments such as waiver, latches, estoppel or the like which can be advanced in response. In fact, arbitrators may be selected because of their experience or specialization in an area.. (This is different than raising issues the arbitrator thinks may be worthy of consideration, but are not clearly known to him or her as dispositive. They involve consideration of other factors).
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    • Monday, April 21, 2025 8:29 AM | George Lobman
      I do my best to not interfere with the case in terms of leading or questioning the attorneys. We are Arbitrators and must remain neutral to the case. If you choose to question a point or topic it could very easily be used to claim partiality and lose the honest effort at an award.
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  • Friday, April 18, 2025 1:56 PM | Rick Mahrle
    I have been confronted with this situation both in a mediation and arbitration. It presents a very difficult situation in either setting. In a mediation where there was a clear statutory defense, I did raise the question with the claimant to see if the issue had been considered. In the arbitration, I decided I needed to let the issue go. It is not my responsibility to try to the matter for the parties.
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    • Friday, April 18, 2025 2:02 PM | Anonymous
      I agree with the arbitration answer. We are sitting as arbitrators, not attorneys. I try not to spoon feed the attorneys. I may ask a question if the testimony or doc presented is unclear to me, for clarity purposes only. But, I would not lead the attorneys. If you lead one side you’ve potentially exposed yourself to a partiality claim.
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  • Friday, April 18, 2025 2:02 PM | Charles H. Barr
    The answer depends on whether the defense is subject to waiver. If it is--e.g., limitations--the arbitrator would be advocating for Respondent by raising it. If it isn't subject to waiver--e.g., the case presents an issue beyond the arbitrator's jurisdiction--then the arbitrator's duty to raise it is coincident with the arbitrator's duty to follow the law.
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    • Friday, April 18, 2025 2:06 PM | Elliot B. Platt
      This seems akin to the arbitrator doing his or her own research. And it could be that the party chose to waive the defense for whatever reason. And if it's malpractice, it's malpractice.
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      • Friday, April 18, 2025 3:16 PM | DAC
        I have the same thoughts.
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    • Friday, April 18, 2025 4:15 PM | Marcia Augsburger
      I agree. While I am sensitive to the concerns raised by others, I believe the answer depends on the issue. For example, in California if a corporation is not represented by an attorney and the arbitrator does not identify this as a problem in a pending arbitration, any resulting award is likely void. That would not serve either party to the arbitration.
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  • Friday, April 18, 2025 2:04 PM | Richard Beens
    I have had this arise on a couple of occasions. If it is binding statutory law, I believe it should be raised. It would be wrong to ignore binding law just because counsel is not competent. No Court judge would ignore binding law and neither should arbitrators.
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  • Friday, April 18, 2025 2:06 PM | Henry Parr
    As an arbitrator, I would not assist a party by raising a defense that the party has not raised.
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  • Friday, April 18, 2025 2:10 PM | Carlos E. Alfaro
    No. An arbitrator is not a judge. The parties are in control of the procedure
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    • Monday, April 28, 2025 10:13 AM | Allan Marain
      Carlos, that's all well and good, but suppose what a party is not raising is statutorily mandated? For example, New Jersey law requires trebling of damages when consumer fraud is found. What if Claimant proves consumer fraud but never asks for trebling?
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  • Friday, April 18, 2025 2:10 PM | Thomas P. Valenti
    According to best practices outlined in the AAA Arbitrator Reference Manual and the Code of Ethics for Arbitrators in Commercial Disputes​, an arbitrator’s role is to resolve only the disputes that the parties have submitted for arbitration. Importantly:

    1) An arbitrator's authority is limited to what the parties have conferred: This principle is core to arbitration. Arbitrators generally should not go beyond the scope of what the parties have raised unless empowered by the arbitration rules or agreement.

    2) Due process and fairness are paramount: Injecting a new legal theory or defense that neither party has raised could raise serious fairness concerns, especially if one side hasn’t had the chance to respond or prepare a rebuttal.
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    • Friday, April 18, 2025 2:18 PM | Thomas Heald
      I believe it is appropriate to raise the issue in the form of a question but give both parties the opportunity to comment and argue it .
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      • Monday, April 21, 2025 3:28 PM | Paul Mason
        Yes. This is known as Jura Novit Arbiter. Best practice is for the Arbitrator to raise the issue as a question and then allow all parties/counsel appropriate time to brief and otherwise address it.
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    • Friday, April 18, 2025 8:04 PM | Mel Simburg
      Raising an issue related to application of a statute is not going beyond the dispute presented by the parties. The arbitrator should follow the law. If it is apparent to the arbitrator that the matter might be controlled by a statute, I think it is appropriate for the arbitrator to ask the attorneys jointly whether the specific statute is applicable or not.
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  • Friday, April 18, 2025 2:18 PM | Mark Alcott
    Yes, the arbitrator should raise it during the hearing and if necessary get the parties to brief it.
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    • Friday, April 18, 2025 2:31 PM | Bill Hussmann
      In a joint session I would raise a question about whether the defense applies and give the parties an opportunity to to brief my question before closing the hearing. While arbitration is a matter of consent I believe we must apply the law as it exists to obtain a correct result
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  • Friday, April 18, 2025 2:27 PM | Jim Burgess
    I generally agree that the arbitrator should not raise a defense or issue that was not asserted by Respondent (or Claimant), unless there is an issue with the arbitrator's authority to act. However, I think it is important for the award to make some mention of the fact that other defenses were not raised beyond what is addressed in the award, and perhaps even call out that this defense was not raised, so that it is clear as to what happened and what did not happen. It also may be appropriate to consider the fact that Respondent had a valid defense that was not raised when weighing discretionary decisions, such as attorney's fees or cost shifting.
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  • Friday, April 18, 2025 2:28 PM | John D. Kimball
    Yes. I have had that situation and raised it with counsel. My view is the arbitrator owes a duty to the parties to get the right result and shouldn't be limited by counsel's failure to raise a defense.
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    • Friday, April 18, 2025 4:20 PM | Richard Storrs
      There are many thoughtful and excellent answers here, and I appreciate the sentiment that the arbitrator is constrained by the parties presentation of issues.

      However, I think this comment is correct…we are supposed to get things right and so I don’t believe we can ignore and dispositive defense.
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  • Friday, April 18, 2025 2:33 PM | Anonymous
    As tempting as it it sometimes (particularly for a pro se party), the arbitrator should not raise an issue of law for the benefit (or detriment) of a party. Neutrality of the arbitrator demands that only what is brought before the proceeding by counsel or a party should be considered. (This is not to say, BTW, that the arbitrator should not carry out thorough legal research with regard to authority that is actually presented by the parties.)
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  • Friday, April 18, 2025 2:36 PM | Kent Sinclair
    There are many reasons a respondent may choose not to raise a statutory defense, even one that would warrant dismissal. These could include considerations related to the broader commercial relationship between the parties, or concern that asserting the defense could result in reputational harm.

    In my view, unless the failure to address the defense would lead to an illegal or unenforceable outcome—for example, awarding interest at a usurious rate in violation of a criminal statute—I would not raise the defense on my own initiative. Party autonomy is a core principle of arbitration, and intervening in such situations risks overstepping the arbitrator’s role.
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  • Friday, April 18, 2025 2:37 PM | Karl Sieg
    No.
    I advise participants in the preliminary hearing that contrary to what many may think that arbitrators tend to split the difference, most often there is a clear winner and a clear loser. Even though each party may prevail on some counts,
    Hear them out. That's why we are there. Something may occur that changes what may seem obvious at a certain moment.
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  • Friday, April 18, 2025 2:55 PM | Mark Schiff
    Arbitrator training 101 reminds us that we are not representing parties, nor are we judges. We are bound by the rules of the AAA or other governing body and the agreement of the parties. A lawyer who makes a mistake is bound by his/her own conduct. If a party discovers that a lawyer's malpractice cost the party a victory in the arbitration proceeding, there are other avenues for parties to pursue.
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    • Friday, April 18, 2025 3:09 PM | David Freedman
      I agree. I decide the claims and defenses the parties submit for decision and nothing else. I think it’s overstepping to suggest or decide unasserted claims or defenses.
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  • Friday, April 18, 2025 3:01 PM | Fred Egler
    I was persuaded by the comment about waiver. The most obvious example is the statute of limitations, which is waivable. It’s hard to imagine a case that could be disposed of solely on that basis where neither party raised it, but in such a case it is not for the arbitrator to intervene. On the other hand, a statute of repose is non-waivable, so I suppose that it would be appropriate to call that to the attention of the parties in order to protect the award from a post-hearing challenge.
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  • Friday, April 18, 2025 3:12 PM | Mark Brancato
    Arbitrators should avoid saying or doing anything or otherwise inviting an inference that calls their impartiality into question. That said, while navigating a course that steers clear of an inadvertent collision with impartiality, an arbitrator should be free to ask the parties to address issues that arise from the testimony and other evidence that are introduced during the hearing but which were not addressed in pre-hearing motions or the parties' pre-hearing memoranda.
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  • Friday, April 18, 2025 3:21 PM | Deborah Rothman, PC
    I always start from the perspective of rendering an award that will not be vacated. If I believe the issue must be addressed for the sake of all parties, I will research it first and then raise the issue with the parties. There is no absolute prohibition on arbitrators doing our own research, just on basing our award on an issue that the parties had no opportunity to brief.
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  • Friday, April 18, 2025 3:31 PM | Michael Orfield
    Absolutely not. Imagine if your resume said that you will always assist council with issues that they fail to recognize so that all issues are dealt with during the arbitration. "If claimants council misses an issue regarding aldamages, I will move to announce the missed issue so that it can be covered. If defense council fails to recognize an issue that would get the case dismissed, I will certainly alert counsel to that issue."
    We are fair and impartial NEUTRALS. Once we become advocates, we lose that critical neutrality and we take away the fundamental underpinnings of the arbitration process.
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  • Friday, April 18, 2025 3:32 PM | Aarta Alkarimi
    In adversarial common law seated arbitrations, generally speaking, the arbitrators are strictly bound by what is pleaded. Under most civil law systems, the expectation is for the arbitrator to know the law. I’d raise it with the parties if I’m arbitrating under civil law and will ask them to make submissions on the issue in their closing or post hearing briefs . The point is to give them a reasonable opportunity to react before I go off and decide.
    .
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  • Friday, April 18, 2025 3:51 PM | Phil Aurbach
    I used to dislike when judges raised issues that hadn't been raised by the parties. In arbitration, the parties choose the arbitrator for his or her expertise as well as fact finding. I would ask the parties to brief the issue.
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  • Friday, April 18, 2025 4:46 PM | Mark L Phillips
    My thoughts are that arbitrators should confine their awards to the issues presented by the parties, unless an unraised issue would affect the jurisdiction of the arbitrator. In my view, once an arbitrator crosses the line and begins to suggest defenses or even additonal potential claims, the arbitrator's role in adr is compromised and diminished.
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  • Friday, April 18, 2025 5:30 PM | Bob Huber
    Generally not, but there are always exceptions. It's a judgment call I would have to make at the time, depending upon the specific statute and the facts of the case. For example, I would likely raise the statutory bar if the statute in question had eliminated the cause of action being pursued. If I was a judge and one spouse brought an action for alienation of affections against the other spouse's paramour, for example, I would certainly notify the parties of the statute eliminating that cause of action.
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  • Friday, April 18, 2025 5:36 PM | William "Zak" Taylor
    This happens all the time in less extreme circumstances than the example. The Arbitrator is a referee, not counsel for one party or the other. Thus, the Arbitrator and Mediator should remain silent. I have on occasion in mediation raised it with the other side as a potential vulnerability without mentioning to the side that could use it.
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    • Friday, April 18, 2025 9:45 PM | Edward Moss, Denver, CO
      If the arbitration agreement indicates that the matter is to be controlled by the substantive law of a particular state, and that law includes a defense which is apparent from the testimony (such as a missed statute of limitations), why should the arbitrator not at least raise the issue and follow the law? Certainly, a judge (also a neutral) would make the effort to decide the case according to the law - - and in that effort, ask the parties about the issue.
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  • Saturday, April 19, 2025 4:30 AM | Geoffrey BH
    in England & Wales, I would used the Arbitration Act 1996, Section 34: Procedural and evidential matters. (1)-It shall be for the tribunal to decide all procedural and evidential matters, subject to the right of the parties to agree any matter. (2)- Procedural and evidential matters include — (g)whether and to what extent the tribunal should itself take the initiative in ascertaining the facts and the law; . . .

    It seems to deal, inter alia, with precisely the situation described. Indeed, I have used on several occasions, including some where the issue was one of fact within my own technical knowledge - why else would a party appoint an Engineer?

    It is IMPERATIVE, however, that all parties have an opportunity to comment , with argument, and evidence if necessary, on any intervention of an arbitrator.
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    • Saturday, April 19, 2025 4:47 AM | Geoffrey BH (Corrigenda)
      With apologies, please read two corrections to my comment:
      Line 1. '... I would have used ...'.
      Line 5 '... I have used it on several occasions ..'.
      Thank you.
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  • Saturday, April 19, 2025 8:53 AM | Chris Helmer
    Questions like these are tough because it raises the issue of to what extent, if any, an arbitrator should "try the parties' case for them." But I don't think failing to raise this point is doing that, as the requirement that arbitrators apply the law and "do justice" collides with it and overrides it. I would never just decide the defense on my own as an arbitrator, but would ask the parties to brief the applicability of that statute to the evidence.
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  • Saturday, April 19, 2025 9:32 AM | Robbie MacPherson
    If the issue is significant and would be outcome determinative the arbitrator should raise the issue in a neutral way, by asking the parties to brief the impact of the applicable statue or case . If the arbitrator does not, there is the danger that the arbitrator, being aware of the issue, and without intending to, will unconsciously allow it to impact the decision. If raised and the parties brief and argue the issue the arbitrator will have the benefit of arguments that would not otherwise have been considered.
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  • Saturday, April 19, 2025 9:49 AM | Jeffrey Pardo
    Interestingly, the prompt does not indicate whether Respondent is pro se or represented by counsel. Would that impact any of the comments? Also, the prompt posits that it is the defense (not a claim) that is not raised. As a neutral, it is not my place to raise or advocate any position for any party. However, as the prompt says, the "evidence" already has been presented and demonstrates that, by law, the Claimant's case is unsupportable. Under such circumstances, (IMHO) the arbitrator is duty-bound to apply the law to the facts as presented. Notes: (1) I would not suggest or query as to facts not raised. I would consider that advocacy. (2) while the procedural side is flexible to assure due process, I don't see that we are free to ignore the plain letter of the law.
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  • Saturday, April 19, 2025 5:35 PM | Waldin Olson
    Yes. To avoid obvious injustice.
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    • Sunday, April 20, 2025 11:00 AM | Edward Moss, Colorado
      Back in the days when I was in private practice, I represented a large national corporation, defending a lawsuit brought in Colorado. Similar lawsuits were pending in other states. Under Colorado law there was a clear statutory defense which I described to home office in-house counsel. Home office directed that the defense not be raised because taking that position could have unfortunate consequences in several other states. If the arbitration agreement requires the mediator to use a state's substantive law, I certainly agree that a "missed" defense or legal theory should be brought to counsel's attention. There may be a good reason it was not asserted.
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  • Sunday, April 20, 2025 11:08 AM | Joseph Bisceglia
    This is a difficult situation, and I understand the opinions expressed by others, but we also need to consider that each party in litigation has a duty to advise the court of adverse precedent. Has the claimant failed to do so in not mentioning the statute?
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  • Sunday, April 20, 2025 12:39 PM | Edwin Stern
    I believe so. In order to appropriately decide an arbitration, as any judicial proceeding, I think that the arbitrator has an obligation to raise a defense or any issue that he or she thinks necessary for an appropriate disposition of the case pursuant to established law. Thus, an issue must be raised that the arbitrator knows to be dispositive and counsel does not do so. In fact, arbitrators may be selected because of their expertise or specialization in an area. This is different than raising issues the arbitrator thinks may be worthy of consideration but are not clearly known to him or her as dispositive. They involve consideration of other factors.
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  • Sunday, April 20, 2025 12:40 PM | Alvin Zimmerman
    I would request a status conference to merely ask what the case is about, is either side filing any dispositive motions, where are we with closing discovery, are the parties going to mediate and when and is there any change in the number of days for the arbitration? Perhaps the other side has been lying in wait as a strategy until the merits hearing do I would not want to do anything to either disturb that strategy or be an advocate for one side. I’m not authorized to do independent research or be an attorney for a party. I do not have authority to even ask about a defense not raised. Yes that could mean an Award rendered only in the facts and law presented not on my greater knowledge of the law than the attorneys. A judge can do that but not an arbitrator.
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  • Monday, April 21, 2025 10:10 AM | ken torricelli
    I have been a practicing attorney for 40 years and a mediator/arbitrator for 25 years. I am a AAA approved arbitrator. As tempting as it may be to raise the issue of the statutory defense to gain an angle during negotiations, I take the case as the parties present it. I am not counsel for the defendant, and I do not frame the issues in anticipation that the defense may be raised at a later date. While I am a facilitative mediator that does not include discussion of legal issues unless raised by the parties. Doing so can change the dynamics in a drastic way and usually to the disadvantage of a successful outcome. Any suggestion that there is some sort of obligation, ethical or otherwise, to raise such issue is simply incorrect. These comments are even more true in an arbitration where I am vested with the authority to make the decision in the matter. Can you imagine a judge in a civil case advising defense counsel that she overlooked a case dispositive issue? No different in the context of a mediation. This is a no brainer.
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  • Monday, April 21, 2025 11:30 AM | Karen Mills
    Technically, the Tribunal may only rule on matters put to it by the Parties. However if the Parties, or even their underlying contract, refers to the governing law in which the statutory provision which shows lack of jurisdiction is contained, it could be considered. A better route would be for the Tribunal to ask both parties to submit a response on what is the governing law or rules and how the claims fit in to, or are framed by, such law or rules. That ought to bring at least one party to deal with the issue.
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    • Monday, April 21, 2025 12:25 PM | A DeSilva
      I think this is the correct approach; the arbitrator's authority is limited by the arbitration agreement, the law and any governing rules. It is reasonable to ask the parties to identify the governing law and to brief the issues for the matter.
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      • Monday, April 21, 2025 5:06 PM | Charles Turet
        The arbitrator is not an advocate, but a neutral arbiter of the matter that is presented by the parties. While the Arbitrator may in a particular case know the statutory law, he is not permitted to advocate for one side or the other. What if it is a pro se case? Is the arbitrator bound to identify the law in favor of the pro se party? What if the arbitrator is not aware of the statute? Is the ruling reversible in a standard award? In a reasoned award? In a FOF and COL award? Subtle inquiries may be made of the party advocates without revealing the answer, but having the party advocates address the issue. In the pro se situation, that's why pro se parties are at a disadvantage.
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  • Tuesday, April 22, 2025 6:47 AM | Anonymous
    I would not raise the issue, if the Respondent has raised other defenses that would allow an award in the Respondent's favor, I would be less concerned. If a party has cited the statutory provision and copied the language so that the language appears in the record, but no argument has been raised, depending on the circumstances, I might make some mention of the language. Again, the response depends on the circumstances, but I would not initiate the discussion or do the research.
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  • Wednesday, April 23, 2025 5:17 PM | James Madison
    California has a statute that would control any inclination to base an award on the limitations statute. The California statute is Code of Civil Procedure 1282.2(g), which provides that, if an arbitrator intends to base an award on any matter not addressed by the parties, the arbitrator must bring it to the attention of the parties and give them an opportunity to address it.

    CCP 1286.2 makes any violation of the arbitration statute, inclluding the foregoing provision, grounds for vacatur.

    One matter he arbitrator should consider in deciding what to do when faced with the situation you describe is the possibility that both parties have deliberately avoided the limitations issue because, for business reasons, they both want a decision otherwise on the merits. The quality of counsel involved should bear on the thinking in this regard.
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  • Sunday, April 27, 2025 5:40 PM | David Skidmore
    There are a lot of interesting comments here. I agree with those who said to raise it as a question and to perhaps require briefing. I still think we as arbitrators have a duty to do justice, but not control the proceedings.
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  • Thursday, May 01, 2025 11:15 AM | vince Cipolla
    If the matter could be construed as a jurisdictional defense which would preclude the court from ruling on the case, the Arbitrator should advise bith parties of the ruling. However if it is non jurisdictional, I believe that we as Arbitrators must remain neutral and unbiased at all times. Its the very essence of our duty to serve. However i would at the conclusion of the evidentiary part of the hearing, and before I close the case, ask each side if their are any motions that either party wishes to make. If defense attorney says none, then i will close the case and rule on the basis of the evidence. A defense, even a winning one can be waived . If so the case will proceed as if the statutory defense is not an issue
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