FLORIDA BAR ETHICS OPINION
July 15, 1988
Advisory ethics opinions are not binding.
An insurance defense attorney may serve as a non-neutral arbitrator on a tripartite panel in
proceedings involving a regular client, provided that the lawyer’s relationship with the
insurer-party is disclosed and the lawyer is capable, despite the relationship, of serving with
integrity and fairness to all concerned.
F.S. 682.13(1)(b)(1987); Florida Arbitration Code
Finklestein v. Smith, 326 So.2d 39 (Fla. 1st DCA 1976); Lee v. Marcus, 396 So.2d
208 (Fla. 3d DCA 1981)
Code of Ethics for Arbitrators of Commercial Disputes
The inquiring attorney often represents a particular insurance company. The attorney asks
whether this relationship precludes him from serving as an arbitrator in cases involving that same
insurance company but in which he is not representing the company.
Presumably the arbitration procedure employed in cases involving the insurance company
is as follows: the insurance company and the claimant each appoint an arbitrator; these two
arbitrators appoint a third neutral arbitrator; and the three arbitrators then resolve the dispute,
with the neutral arbitrator obviously determining the outcome.
The inquiring attorney’s apparently substantial relationship with the insurance company
disqualifies him from serving as “an arbitrator appointed as a neutral,” F.S. 682.13(1)(b) (1987),
in proceedings involving that insurer but does not preclude him from accepting appointment as
the insurance company’s arbitrator — one of the two non-neutral arbitrators — on a tripartite
Neither the Florida Arbitration Code nor the decisions of Florida’s appellate courts
require that arbitrators appointed by the disputants to a tripartite panel be impartial. This is made
clear in the recent case of Lee v. Marcus, 396 So.2d 208 (Fla. 3d DCA 1981), which quotes the
material portions of the Arbitration Code and an earlier decision by the First District Court of
As the very nature of the widely employed three-person arbitration panel itself
implies, the arbitrators designated by the parties are not intended to be entirely
disinterested or impartial. To the contrary, each is expected to be, in the
vernacular, no more than unprejudiced on the side of the contestant which has
appointed him. As was accurately said in Finklestein v. Smith, 326 So.2d 39, 40
(Fla. 1st DCA 1976),
[a]rbitrators appointed by disputants to a tripartite panel are expected by
the disputants and should be understood by the courts to act as partisans only one
step removed from the controversy.
The Florida Arbitration Code embodies this view. Section 682.13(1)(b), Florida
Statutes (1979), provides that an award shall be vacated when
(b) [t]here was evident partiality by an arbitrator appointed as a neutral or
corruption in any of the arbitrators or umpire or misconduct prejudicing the rights
of any party.
Since “evident partiality” is pointedly a basis for vacation only in the case
of a neutral arbitrator, it is apparent that this provision reflects an understanding
of the not disinterested nature of the party-appointed arbitrator.
Accordingly, it has been held, seemingly without exception, that—absent
overt corruption or misconduct in the arbitration itself, which is not alleged
here—no arbitrator appointed by a party may be challenged on the ground of his
relationship to that party.
If neither the legislature nor the courts require impartiality on the part of the arbitrators
selected by the parties, it cannot be deemed unethical for a lawyer to accept appointment by a
party to which he is partial unless that partiality rises to the level of “corruption” (which is
This conclusion finds support in the Code of Ethics for Arbitrators in Commercial
Disputes, which is a joint product of the American Bar Association and the American Arbitration
Association. A reference in the preamble to this code of ethics makes apparent the sponsors’
intention that it provide guidance in cases in which the arbitrators are lawyers (. . . “its use is not
limited . . . to cases in which the arbitrators are lawyers.”) Further, the code of ethics
acknowledges that there are “many types of tripartite arbitration in which it has been the practice
that the two arbitrators appointed by the parties are not considered to be neutral.” For these
non-neutral arbitrators the code of ethics contains special ethical considerations. The most
significant of these are:
1. “Non-neutral arbitrators may be predisposed toward the party who appointed
them but in all other respects are obligated to act in good faith and with integrity
2. The provisions of the code that proscribe the arbitrator from entering into
relationships or acquiring interests that are likely to affect impartiality or create
the impression of partiality “are not applicable to nonneutral arbitrators.”
3. “Non-neutral party-appointed arbitrators should disclose to all parties, and to
the other arbitrators, all interests and relationships which [non-neutral arbitrators
or umpires are required to disclose.]” Although disclosure is required, non-neutral
arbitrators “are not obligated to withdraw if requested to do so by the party who
did not appoint them.”
4. “Non-neutral arbitrators should observe all of the obligations [of neutral
arbitrators or umpires] to conduct the proceedings fairly and diligently.”
This code of ethics is referenced in the comment to the intermediary rule (4-2.2) in the
Rules of Professional Conduct: “. . . a lawyer acting as arbitrator or mediator . . . may be subject
to applicable codes of ethics, such as the Code of Ethics for Arbitrators in Commercial
Disputes. . . .”
The special provisions in the arbitrator code for non-neutral arbitrators are consistent with
the applicable ethical principles in the Rules of Professional Conduct. Disclosure of the nature of
the lawyer-arbitrator’s relationship with the insurance company is necessary to avoid a violation
of Rule 4-8.4, which forbids a lawyer to engage in conduct involving dishonesty, fraud, deceit or
misrepresentation. Disclosure is the key to the ethical permissibility of a lawyer serving as a
non-neutral arbitrator in a proceeding involving a frequent or regular client. All parties and all
arbitrators are entitled to know whether any of the arbitrators comes to the proceeding with a
biased viewpoint, so that they can adjust their respective positions in accordance with that
knowledge in order to ensure the integrity of the proceeding.
The statutory proscription against “corruption” on the part of an arbitrator, whether or not
neutral, probably is analogous to the Rule 4-8.4 proscription against conduct prejudicial to the
administration of justice. While a lawyer filling the non-neutral arbitrator role is permitted to be
somewhat partial, the lawyer is ethically proscribed from taking any action or position that
would cause the arbitration proceeding to be unjust. A lawyer should not agree to serve as
arbitrator if his financial or other ties to the insurance company are such that they render him
unable to serve with integrity and with fairness to all concerned.
As indicated above, the role of neutral arbitrator or umpire is, by its terms, foreclosed to
any lawyer whose livelihood is linked to one of the parties or who otherwise has close ties with
one of the parties or the parties’ counsel. The neutral arbitrator or umpire role is akin to that of
judge, with the attendant obligation of recusal for bias. See Canon 3c, Code of Judicial Conduct;
The principles expressed in this opinion are equally applicable to plaintiff’s attorneys.
Such attorneys must disclose their ties, if any, to the claimant and the claimant’s counsel and any
substantial relationship they may have with or any bias they may have against the insurance
company (e.g., pending litigation against the company or recent acrimonious litigation).