CALIFORNIA APPELLATE COURT AFFIRMS DECISION TO DISQUALIFY ARBITRATOR in dispute involving lloyd’s syndicates
A California appellate court has affirmed a trial court’s decision to disqualify an arbitrator and vacate an arbitration award based on the arbitrator’s failure to disclose his ties to the plaintiffs’ insurer. Plaintiff, Advantage Medical Services (“AMS”) was insured by two Lloyd’s of London syndicates. The arbitrator and his law firm represented several protection and indemnity clubs that obtained reinsurance through various Lloyd’s of London syndicates.
The court held that disclosure of the arbitrator’s ties to AMS’s insurer “could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial.” As such, the court affirmed the trial court’s decision to vacate the arbitrator’s interim award in favor of the plaintiffs. Additionally, the appellate court held that “the statutory right to petition a trial court to vacate an arbitration award based on an arbitrator’s failure to make required disclosure cannot be waived by the [AAA] rule stating its determinations regarding disqualification are conclusive.” Advantage Medical Services v. Hoffman, No. 05CC7459 (Cal. Ct. App. March 3, 2008).
This post written by Lynn Hawkins.
