With the increasing use of arbitration as an alternative to full-blown litigation, the risk of a conflict of interest by an individual arbitrator has grown. This risk can be mitigated significantly by the use of comprehensive and exhaustive investigative due diligence, background checks, and investigative link analysis to determine the connections between an arbitrator and one of the parties or counsel in the arbitration. This investigation will invariably help to weed out connections or a hidden conflict that might taint the fairness of the proceeding or raise the appearance of bias.
Sources of potential arbitrators, such as the American Arbitration Association, are required to disclose any potential conflict of interest in disclosure statements submitted to the parties well in advance of the commencement of the arbitration. This process is helpful to the attorneys in deciding on an arbitrator, but certainly neither all-inclusive nor the most reliable way to vet an arbitrator. Often, arbitrators may not even realize that the conflict of interest exists before the arbitration commences, or they may not believe the interest is material or considered significant enough to rise to a conflict and thus may not disclose it.
