The First Circuit Court of Appeals recently found an agreement's arbitration clause unconscionable where one party was given almost unfettered control over the selection of the arbitrators. In Trout v. Organización Mundial de Boxeo, Inc., plaintiff Austin Trout ("Trout"), a professional boxer, claimed the defendant World Boxing Organization's ("WBO") decision to move him from a weight class cost him to opportunity to pursue a world championship in that class. He brought claims under the Muhammad Ali Boxing Reform Act, as well as breach of contract, fraud, and negligence claims.
The American Arbitration Association ("AAA") has announced on its website that it is offering a "Streamlined Three-Arbitrator Panel Option" for large, complex cases. It's a fresh idea that is worthy of parties' consideration in cases where the rules (see Section L-2(a)) or the parties' agreement requires a panel of three arbitrators to hear and decide the case. The Streamlined Three-Arbitrator Panel Option allows a single arbitrator to work with the parties in moving the case through the preliminary and discovery stages. A full panel participates in the evidentiary hearing and in rendering the final award.
One of the many advantages of arbitration over litigation is that the parties to a dispute have the opportunity to choose the arbitrator or arbitrators who will decide their claims. The selection of an arbitrator is a critical decision point that necessarily occurs very early in the arbitral process. The stakes are high since an arbitrator's award is very difficult -- some say nearly impossible -- to have vacated. Choosing an arbitrator who is well suited to your case requires careful consideration of many factors, several of which are set out below.