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Attorneys as Arbitrators

62 Pages Posted: 23 Jan 2009 Last revised: 23 Jul 2013

Stephen J. Choi

New York University School of Law

Jill E. Fisch

University of Pennsylvania Law School - Institute for Law and Economics

Adam C. Pritchard

University of Michigan Law School

Date Written: January 21, 2009


We study the role of attorneys as arbitrators in securities arbitration, using a dataset of 422 randomly selected arbitrators and their 6724 arbitration awards from 1992 to 2006. We find that arbitrators who also represent brokerage firms or brokers in other arbitrations award significantly less compensation to investor-claimants than other arbitrators. This relation between representing brokerage firms and arbitration awards remains significant even when we control for political outlook. We find no significant effect for attorney-arbitrators who represent investors or both investors and brokerage firms. We report that ideology also correlates significantly with arbitration awards - arbitrators who donate money to Democratic political candidates award greater compensation than arbitrators who donate to Republican candidates.

Because the arbitration award is the product of the panel, not a single arbitrator, we also study the dynamics of panel interaction. We find that the position of chair is an important factor in assessing the arbitrator's influence (although the financial conflicts of other arbitrators may also affect arbitration awards). Coalitions among the other arbitrators are also important. If the chair and another panelist possess a common attribute, the effect on the arbitration award increases.

Finally, we provide evidence that the 1998 NASD reforms to the arbitration process - which introduced party control over the composition of panels - ameliorated, but did not eliminate, the effect that attorneys who represent brokers have on outcomes. We find no significant effect from the NASD's 2004 reforms.

Keywords: attorneys, procedure, litigation, arbitration, securities regulation, investors, brokers, brokerage firms

JEL Classification: K22, K41

Suggested Citation

Choi, Stephen J. and Fisch, Jill E. and Pritchard, Adam C., Attorneys as Arbitrators (January 21, 2009). Journal of Legal Studies, Vol. 39, No. 1 (2010): 109-57; NYU Law and Economics Research Paper No. 08-18; U of Michigan Law & Economics, Olin Working Paper No. 09-001. Available at SSRN: or

Stephen J. Choi (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Jill E. Fisch

University of Pennsylvania Law School - Institute for Law and Economics ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-746-3454 (Phone)
215-573-2025 (Fax)

Adam C. Pritchard

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4048 (Phone)
734-647-7349 (Fax)

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