Proponents of arbitration have long touted the core values of arbitration: speed, efficiency and finality. As arbitration agreements have become increasingly widespread, many critics suggest that the lack of due process protections in arbitration result in unfairness, especially to the classic one-shot player – the consumer or employee. One way to ensure that parties receive due process, is to provide them a basis for challenging an arbitration award. While the standards for judicial review of arbitration awards are limited, they nevertheless permit a party to challenge the procedural regularity of the arbitral process and, in the majority of jurisdictions, challenge the award if the party believes that the arbitrator manifestly disregarded the law. While courts are skeptical of substantive challenges to arbitration awards, courts do overturn arbitration awards on substantive grounds. One of the obstacles to challenging an arbitration award is that arbitration hearings are not usually recorded or transcribed.
An appellate court in D.C. recently confronted the question whether arbitration hearings must be transcribed.
As this case demonstrates, the cost of producing a transcript is relatively low. It is simply the cost of transcribing an audiotape. Transcripts are valuable not only to a party challenging an arbitration award, but also to ensure the integrity of the arbitration process. If the Supreme Court finds that parties may agree to expand judicial review of arbitration awards in Hall St. Assocs. LLC v. Mattel, Inc. 196 F. App’x (9th Cir. 2006), cert. granted, 127 S.Ct. 2875 (May 29, 2007) (online merits brief at http://www.abanet.org/publiced/preview/briefs/nov07.shtml#hallstreet), the issue of transcripts is likely to become even more important. I think such a development would provide important support for the continued viability of the arbitration process.