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In choosing between a bare award and a reasoned award in arbitration, drafting or arbitrating counsel often focus on the salutary effect on logic and reasoning that having to write an award may have on the panel. There is no doubt that is an important and legitimate purpose for requiring a reasoned award.  As the renowned jurist Frank M. Coffin wrote in The Ways of a Judge 57 (Houghton Mifflin 1980):

[W]e may be in the very middle of an opinion, struggling to reflect the reasoning all judges have agreed on, only to realize that it simply “won’t write.”  The act of writing tells us what was wrong with the act of thinking.

But other needs should also be weighed.  The desire to assure careful thought in this particular way may be subordinate if the client has an overriding desire to maintain confidentiality.  Many clients elect arbitration because it is a private process; they and often their counselors believe that confidentiality follows.  However, privacy and confidentiality are not synonyms in the arbitration world.  At least in the U.S., seeking judgment on a reasoned arbitral award can expose not only the fact of the dispute and its outcome but underlying confidential information.  The reason for this exposure is that the needs of the open and publicly funded judicial system require that the judges’ rulings be subject to scrutiny.  As one of the few appellate decisions on this topic explains:

the dispositive documents in any litigation enter the public record notwithstanding any earlier agreement. How else are observers to know what the suit is about or assess the judges’ disposition of it? Not only the legislature but also students of the judicial system are entitled to know what the heavy financial subsidy of litigation is producing. These are among the reasons why very few categories of documents are kept confidential once their bearing on the merits of a suit has been revealed. In civil litigation only trade secrets, information covered by a recognized privilege (such as the attorney-client privilege), and information required by statute to be maintained in confidence (such as the name of a minor victim of a sexual assault), is entitled to be kept secret on appeal. . . .  [M]any litigants would like to keep confidential the salary they make, the injuries they suffered, or the price they agreed to pay under a contract, but when these things are vital to claims made in litigation they must be revealed.

Baxter Int’l Inc. v. Abbott Labs. 297 F.3d 544, 546-47 (7th Cir. 2002) (Easterbrook, J).

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Laura A. Kaster

Laura is a full time neutral practicing in the NY metropolitan area. She is a fellow of the College of Commercial Arbitrators and an IMI certified and CEDR accredited mediator on the AAA, CPR, FINRA, NY and NJ rosters. She is Co-Editor-in-Chief of NY Dispute Resolution Lawyer. She has an abiding interest in decision-making and judgment and using the teachings of neuroscience to improve our work. She is also an amateur watercolorist.

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