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What is '(Im)Partial Enough' in a World of Embedded Neutrals?


Nancy Welsh


Penn State Law

December 13, 2010

Arizona Law Review, Vol. 52, p. 395, 2010
Penn State Legal Studies Research Paper No. 13-2010

Abstract:     
The Supreme Court’s decision in Caperton v. A. T. Massey Coal Co. highlighted the fragility of judicial independence and impartiality in the United States. A similar, less-noticed fragility of independence and impartiality exists among the arbitrators, mediators and administrative hearing officers who resolve an increasing number of disputes. Everywhere one looks, there is unremarked yet remarkable evidence of the rise of - embedded neutrals, particularly in uneven contexts between one-time and repeat players. This phenomenon becomes particularly worrisome when the embedded neutral’s role is due to their special relationship with the repeat player, and the one-time player is not as sophisticated as the repeat player, has not voluntarily or knowingly chosen the dispute resolution forum that will be used to resolve their dispute, and is either unaware of the special relationship between the neutral and the repeat player or effectively unable to challenge it. As dispute resolution becomes a lucrative private business, it is easy to begin to worry about the corrupting influence of repeat business and money on the ability of embedded neutrals to - hold the balance nice, clear and true. The Supreme Court, however, seems largely oblivious to these concerns. The Court has encouraged deference to the decisions and settlement agreements these neutrals produce and has regularly rejected one-time players’ claims of structural bias. This Article explores whether the analysis in Caperton and its antecedents - i.e., conducting a close examination of the volume and flow of monies that may provide direct and indirect benefit to the neutral, their timing, and the plausibility of their effect on an adjudicated outcome, in order to determine whether the risk of actual bias is - too high to be deemed - constitutionally tolerable - could be applied to assess the sufficiency of the impartiality offered by embedded neutrals and private dispute resolution organizations when they are treated as adequate - and sometimes superior - replacements for independent and public trial courts.

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Date posted: May 20, 2010 ; Last revised: December 16, 2010

Suggested Citation

Welsh, Nancy, What is '(Im)Partial Enough' in a World of Embedded Neutrals? (December 13, 2010). Arizona Law Review, Vol. 52, p. 395, 2010; Penn State Legal Studies Research Paper No. 13-2010. Available at SSRN: http://ssrn.com/abstract=1612219

Contact Information

Nancy Welsh (Contact Author)
Penn State Law ( email )
333 West South Street
Carlisle, PA 17013
United States
717-241-3508 (Phone)
717-240-5126 (Fax)
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