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Over the past six months I have addressed “Issues that Should Be Considered by Parties Before Agreeing to Arbitrate.” (See The Legal of June 19, Aug. 21 and Oct. 16.) In these articles, I have focused on decisions parties should make pre-arbitration so that neither they nor the arbitrator are in doubt about the arbitrator’s obligations and authority. What was not explored, however, were the consequences should an arbitrator enter a final award that was apparently incomplete or mistaken in that it failed to address an issue raised by the parties, contained an error in calculation or identification of parties, or was ambiguous or otherwise susceptible to a disputed interpretation. In such circumstances, a party unhappy with the award will often request that the arbitrator complete, clarify or correct it. The opposing satisfied party, however, will immediately object to any modification or amendment of the award, citing the doctrine of functus officio. This Latin term, unfamiliar to many lawyers, means literally, “task performed.” It is defined in Black’s Law Dictionary as “having fulfilled the function, discharged the office, or accomplished the purpose, and therefore having no further purpose or authority.” As applied to arbitrations, it has been described by the U.S. Supreme Court as providing that “arbitrators exhaust their power when they make a final determination on the matters submitted to them. They have no power after having made an award to alter it; the authority conferred on them is then at an end.” In short, their power terminates immediately after deciding the case regardless of the correctness of that decision. Generally, this doctrine has been based on the notion that the arbitrator has been retained to decide a specific dispute and this great authority as an ad hoc judge may be exercised only with respect to a specific case. Once entered, the arbitration award is deemed final and complete and not subject to additional arbitral scrutiny. The most significant aspect of this doctrine is that it denies to the arbitrator – and, generally, to any court called upon to review the arbitrator’s award – the authority generally reposed in the judiciary of entertaining motions for reconsideration or altering any part of an order earlier entered. It has been suggested that underlying the doctrine is the earlier judicial hostility of the common law to arbitration generally, and the desire to avoid improper pressure being placed upon non- judicial officers to change their opinions. Recognizing the harshness of this highly restrictive approach, however, our courts under the common law, and legislatures in statutes, have recognized exceptions to the functus officio doctrine. Thus Section 7311 of Pennsylvania’s Uniform Arbitration Act specifically provides that that an arbitrator may modify or correct an award when: There was an evident miscalculation of figures or mistake in the description of any person, property or thing referred to in the award; The arbitrators awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; There is a need to clarify the award; or The Revised Uniform Arbitration Act, which has not been adopted in Pennsylvania, adds that an arbitrator may modify or correct an award, “because the arbitrator has not made a final and definite award upon a claim submitted by the parties to the arbitration proceeding.” While these statutory provisions and certain judicial decisions have provided some flexibility relating to the finality of an arbitrator’s decision, cases repeatedly present themselves in which the functus officio doctrine has been applied, notwithstanding statutory and judicial exception. Such a circumstance was recently highlighted in a case from New Jersey, Kim v. Blisset. There, the oral agreement to arbitrate set forth only the matter to be arbitrated, the identity of the arbitrator and that the award was to be final. The case itself involved a claim by a plaintiff-attorney seeking an award of unpaid attorney fees that was opposed by the defendant-client. In addition, both parties sought of the arbitrator an award of attorney fees relating to this litigation itself, the plaintiff on the ground that the original retainer agreement provided for such an award, and the defendant on the ground that the plaintiff’s claim was frivolous. They also submitted post-hearing briefs to the arbitrator seeking such additional attorney fees. The arbitrator found for the plaintiff-attorney on the underling claim. With respect to the request for attorney fees, however, the arbitrator determined that it would be better to follow the “American rule” under which each party is responsible for its own attorney fees. Accordingly, attorney fees incurred in the arbitration were not awarded. The plaintiff-attorney filed a motion with the arbitrator seeking “post-arbitration fees,” stating that the arbitrator had failed to consider that the retainer with the client did provide for the award of such additional fees. The arbitrator, apparently accepting this argument and over defendant’s objection, granted the motion and issued a supplemental award based upon the assumption that his first award had left this issue open. The Appellate Division of the Superior Court of New Jersey, relying on that state’s newly adopted Revised Uniform Arbitration Act, vacated the arbitrator’s supplemental award; it concluded that once the arbitrator had declined to include the attorney fees in his award, the plaintiff did not have the right to challenge it, even if the arbitrator was clearly mistaken as to his right to award them under the retainer agreement. The court concluded that “once the arbitrator issued his award, his function was completed and in the absence of an agreement by the parties or a basis for him to act identified in the new statute, his powers ceased.” The arbitrator’s assumption that he had the broader powers of a judge to continue to act was not warranted; the powers of an arbitrator were not co-extensive with the authority of a judge to grant relief, unless the parties had agreed that they were. The Appellate Division determined that the arbitrator had, in fact, dealt with this issue in his original order, and therefore could not alter it through the issuance of a supplemental amending order, even if he had concluded that he was mistaken as a matter of law. The lesson to be learned from this should be clear for both arbitrators and parties. An arbitrator, before issuing an award, should carefully determine whether the award, in fact, deals with all of the issues submitted by the parties because there may not be another opportunity to address them. This difficulty may arise in even the most simple of matters. Consider a case in which an injured plaintiff is seeking damages for physical injuries, and the spouse is seeking damages for loss of consortium. Should the arbitrator issue a “final award” in the amount of $20,000 for the plaintiff but make no mention of the spouse, three assumptions may be made by the parties: The arbitrator determined that the spouse was not entitled to consortium damages; the award includes the consortium claim; or, the arbitrator merely neglected to rule on the spouse’s consortium claim, so that the “final award” should not really be deemed final. Understandably, in such circumstances, plaintiff and defense counsel will disagree as to whether the fact that no mention of the consortium claim was made represented a mistake or an intentional omission that will require or allow clarification or supplementation. When a case involves a multiplicity of unrelated issues, the possibility of such confusion, of course, increases significantly. Such a situation may undermine the desired finality of the award and, potentially, open up extended court litigation, as it did in the New Jersey case. Particularly in a complex case, therefore, parties to an arbitration should make clear to the arbitrator the various issues as to which a specific ruling is required. To the extent that there might be any confusion, it would be highly advisable (and often helpful) to submit to the arbitrator a form of order that sets out with particularity all of the items to be included in the final award. One final lesson might be learned from the New Jersey case. The court there noted that even if the arbitrator’s actions had fallen within the scope of his authority to modify the award, the plaintiff, in seeking such modification, failed to comply with the stringent time constraints imposed by the arbitration statute. Thus, any attorney who believes that the arbitration award is subject to modification for any justifiable reason must always remember that Pennsylvania’s Uniform Arbitration Statute provides time limits within which such modification must be sought from the arbitrator or the court. Failure to act within that period will unquestionably result in a denial of such relief. ABRAHAM J. GAFNI is a mediator/arbitrator with ADR Options, anda professor at Villanova University School of Law.

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