Student Name: Mary Ngeru

Link for opinion: http://www.lexisnexis.com.proxy

Title: California: 2010 Conflict of interest
Plaintiffs, a company and an individual, sued defendants, an arbitrator and an arbitration organization, alleging five separate causes of action, all of which arose out of the alleged failure of the arbitrator to disclose a certain conflict of interest during the appointment process. A dispute had arisen between plaintiffs and a construction company. Plaintiffs alleged that defendants committed fraud because they failed to disclose the arbitrator's romantic relationship with the opposing counsel's sister in the underlying arbitration proceeding. The trial court sustained defendants' demurrer without leave to amend. (Superior Court of the City and County of San Francisco, No. 484081, Peter J. Busch, Judge.)

The Court of Appeal affirmed the judgment. The court concluded that the common law absolute immunity for quasi-judicial acts applied to the misconduct alleged in the complaint, thereby precluding plaintiffs' civil lawsuit for damages against defendants. Any claimed misconduct by the arbitrator in association with the failure to make a required disclosure at the inception of his selection was sufficiently associated with the arbitration process itself to justify the application of arbitral immunity.


A person serving as an arbitrator pursuant to an arbitration agreement has statutory and ethical duties to comply with certain disclosure requirements. Code Civ. Proc., § 1281.9, subd. (a), mandates that a person proposed to serve as a neutral arbitrator shall disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial.



Code Civ. Proc., § 1281.85, subd. (a). Ethics Standards for Neutral Arbitrators in Contractual Arbitration, Standard 6(d), addresses what relationships must be disclosed by a proposed arbitrator. The disclosure includes situations where the arbitrator or a member of the arbitrator's immediate family has or has had a significant personal relationship with any party or lawyer for a party.

Labels for the post: legal ethics, conflict of interest