Question 1

The judicial review of an arbitrator's award in a voluntary proceeding is quite restricted and is more limited than the appellate review of a trial court's decision.

Accepted Answer

Courts do not interfere with an award by examining the merits of the controversy, the sufficiency of the evidence supporting the award, or the reasoning supporting the decision. Were it otherwise, arbitration would fail in its chief purpose: to preclude the need for litigation.

Question 2

An arbitrator may be considered partial or corrupt by independently investigating a material matter after the close of hearings without telling either party about the investigation.

Accepted Answer

Section 10 of the Federal Arbitration Act provides that an arbitration award may be vacated or set aside on any one of four grounds, including arbitral misconduct. The concept of arbitral "misconduct" does not lend itself to a precise definition, but undertaking independent, unauthorized investigations have been found to fit that definition.

Question 3

Individual states are not limited by the Constitution when they make laws that deny arbitration of certain disputes

Accepted Answer

The Commerce Clause and the Supremacy Clause of the U.S. Constitution are often used to set aside such state laws that deny arbitration of certain disputes.

Question 4

The federal system and all state systems require arbitration hearings to comply with established rules of evidence.

Accepted Answer

States have different rules relating to the admissibility of evidence. In most states the established rules of evidence must be followed by the arbitrators. Several jurisdictions, however, do not require hearings to be conducted according to the established rules of evidence.

Question 5

A mediator cannot impose a binding solution on the parties.

Accepted Answer

A mediator cannot impose a binding solution on the parties. However, as an unbiased and disinterested third party, a mediator is often able to help the parties bring about an understanding of a dispute and thus avoid litigation of it.

Question 6

_____ is the process used to persuade or coerce someone to do what you want them to do.
A) Avoidance
B) Accommodation
C) Negotiation
D) Competition
E) Collusion

Accepted Answer

Negotiation is the process used to persuade or coerce someone to do what you want them to do. All of us negotiate all the time with ourselves, our family members, our co-workers, and even with strangers.

Question 7

Roger Fisher, William Ury, and Bruce Patton wrote a seminal book on negotiation titled _____.
A) The Principled Proposition
B) Making It Work
C) Let's Just Talk
D) Getting to Yes
E) Letting It Go

Accepted Answer

The book presents a better approach to negotiating among disputing parties and presents seven elements that should become the focus of negotiators.

Question 8

Rules related to court-annexed mediation are federally mandated.

Accepted Answer

Rules related to court-annexed mediation are local in nature; thus, there are wide variations as to the type of cases that courts require to be mediated.

Question 9

Interest-based negotiations are superior to position-based negotiation because:
A) the differences between the interests of the parties are often large.
B) interest-based negotiations allow room for consideration of non-factual concerns, such as relationships and long-term interests.
C) position-based negotiation is often only concerned with preparing for litigation.
D) interest-based negotiation requires the presence of a judge or magistrate.
E) interest-based negotiation forces the parties to discuss resolution options for the week prior to open negotiation.

Accepted Answer

Parties would likely benefit by discussing how each could benefit by continuing their relationship of customer and supplier. They may be able to solve the current problem and maintain, if not enhance, their future business opportunities together.

Question 10

The court mandates an enforcement mechanism that ensures the parties will mediate in good faith.

Accepted Answer

Even in the court-annexed mediations, a party usually satisfies the court's order to mediate by simply showing up. Generally, there is no enforcement mechanism that ensures the parties will mediate in good faith.

Question 11

The failure of a party to be present at an arbitration hearing constitutes a waiver of the right to reject the award and seek de novo judicial review.

Accepted Answer

The failure of a party to be present, either in person or by counsel, at an arbitration constitutes a waiver of the right to reject the award and seek de novo judicial review. In essence, a party's lack of participation operates as consent to the entry by the court of a judgment on the award.

Question 12

A negotiation between a seller and a buyer begins with each party stating their respective expectations. The seller starts with as high an asking price as is considered reasonable. Likewise, the buyer begins with the lowest reasonable price. This is an example of:
A) positional bargaining.
B) principled negotiation.
C) interest-based negotiation.
D) fact bargaining.
E) surface bargaining.

Accepted Answer

In positional bargaining, the parties begin in a competitive style by stating their respective expectations.

Question 13

If an arbitrator makes a clearly erroneous ruling pursuant to a voluntary contract-based arbitration, there will be sufficient grounds for a judge to set aside the award.

Accepted Answer

Error of law renders the award void only when it requires the parties to commit a crime or otherwise to violate a positive mandate of the law.

Question 14

Absent fraud or other inappropriate behavior, arbitration awards in voluntary proceedings are not subject to judicial review on the merits of the decision.

Accepted Answer

The fact that the arbitrator made erroneous rulings during the hearing, or reached erroneous findings of fact from the evidence, is no ground for setting aside the award because the parties have agreed that he or she should be the judge of the facts. An erroneous view of the law no matter how egregious is binding because the parties have agreed to accept the arbitrator's view of the law.

Question 15

From the perspective of judicial review, voluntary arbitration is a more effective alternative to litigation than mandatory arbitration.

Accepted Answer

The arbitration process is less time consuming and less costly than litigation only if the parties are limited in seeking judicial review of the arbitrators' awards. From this perspective, voluntary arbitration is a more effective alternative to litigation than mandatory arbitration.

Question 16

In order for a federal court to assume that parties did not intend to arbitrate, a court must believe with positive assurance that the parties did not intend to include the particular dispute in the arbitration clause.

Accepted Answer

The federal policy clearly favors arbitration of commercial disputes. The FAA provides that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."

Question 17

Generally an arbitrator's award does not need to set forth findings of fact, conclusions of law, or the reasons for an award.

Accepted Answer

Generally an arbitrator's award does not need to set forth findings of fact, conclusions of law, or the reasons for an award. However, a disclosure of findings and the reasons must be given if the applicable statute, arbitration agreement, or submission so requires. When the arbitrator does provide the basis for decision in the form of an opinion or letter, that document becomes a part of the award.

Question 18

The Federal Arbitration Act is largely responsible for the prominent role and positive perception of arbitration among businesses today.

Accepted Answer

Prior to the enactment of the FAA, our common law system preferred litigation over arbitration as a means of resolving disputes. In 1925, congressional enactment of the FAA began to change this presumed way of dispute resolution.

Question 19

Mandatory arbitration proceedings are generally subject to a de novo judicial review if a party is dissatisfied with the award.

Accepted Answer

Courts throughout the United States have uniformly upheld mandatory arbitration statutory schemes as against the constitutional challenges previously mentioned where a dissatisfied party can reject the arbitrator's award and seek a de novo judicial review of that award.

Question 20

Statutorily mandated arbitration requires a higher level of judicial review of an award than voluntary arbitration.

Accepted Answer

Although a party may voluntarily consent to almost any restriction upon or deprivation of a right, a similar restriction or deprivation, when compelled by government, must be in accord with procedural and substantive due process of law. Statutorily mandated arbitration requires a higher level of judicial review of the award.

Quiz 5: Alternative Dispute Resolution