Ethics

By Kermit D. Marsh

Honeycutt and Cox: What Steps Can Be Taken to Avoid Vacatur of Arbitration Awards?

Arbitration is one of the tools which institutional clients employ to manage disputes. The recent decisions in Honeycutt vs. JPMorgan Chase Bank, N.A. (2018) 25 Cal.App.5th 909 and Cox vs. Bonni (2018) 2018 Cal.App. Lexus 1173 have been much discussed in terms of the duty of the arbitrator to disclose prior dealings between the arbitrator and parties or counsel. There may also be reasons to look at these decisions as a basis for changing the manner in which counsel conduct themselves in the arbitration process, in order to avoid the vacation of an arbitration award.

In 2018, the California courts reminded the legal community of the potential consequences if an arbitrator fails to disclose prior dealings with a party or counsel in arbitration. In Honeycutt, the Court of Appeal vacated an arbitration award due to the arbitrator’s failure to fully disclose all prior dealings with the opposing party. In December, in Cox, the Court of Appeals, declined to vacate an arbitration award which was challenged due to the arbitrator’s failure to fully disclose all prior dealings with the opposing party. In light of the decisions in Honeycutt and Cox, in house counsel may want to revisit their practices in the arbitration process.