How to Become an Arbitrator in the United States

This article explains how an individual may become an arbitrator in the United States and serve on an arbitration panel for court-annexed arbitration or one of the leading U.S. arbitral institutions. It describes the qualification criteria for the various institutional rosters and the options for a prospective arbitrator to acquire the necessary training and experience to qualify for a roster.

Acquiring Experience as an Arbitrator

Parties often want an arbitrator who has experience presiding over cases similar to their own. For example, parties may want an arbitrator who has previously presided over cases that:

• Are in the parties’ particular industry.
• Involve similar types of contracts or disputes.
• Are complex or involve multiple parties.

New arbitrators often lack opportunities to acquire the requisite experience of presiding over cases because parties are unwilling to empanel an inexperienced arbitrator.

U.S. alternative dispute resolution (ADR) institutions such as the AAA, CPR, FINRA, and JAMS administer most arbitrations in the United States. Each institution has a list (or roster) of arbitrators from which parties select arbitrators to preside over their cases. However, new arbitrators seeking to acquire experience by joining an institutional roster face the same dilemma, because most U.S. arbitral institutions require an arbitrator to have significant experience before the institution accepts the arbitrator onto its roster (see Joining an Institutional Roster, below).

Of the major U.S. arbitral institutions, only FINRA accepts and provides training for inexperienced new arbitrators (see FINRA, below).

Acquiring Experience in Court-Annexed Arbitration

An attorney who wishes to become an arbitrator but has no experience serving as one may acquire relevant experience by serving in a court-annexed arbitration program. Many courts in the United States with a burgeoning caseload have instituted a program of court-annexed arbitration, which provides for either mandatory or optional arbitration of certain types of cases, usually with a small amount in controversy.

For example, state courts that provide court-annexed arbitration include:

• Oregon (Or. Rev. Stat. §§ 36.400 to 36.425) (court-annexed arbitration in certain counties for cases seeking only monetary damages of less than $50,000).
• Washington (RCW 7.06.010 to 7.06.910) (court-annexed arbitration in certain counties for cases seeking only monetary damages of less than $15,000).
• California (Cal. Civ. Proc. Code §§ 1141.10 to 1141.32) (court-annexed arbitration for cases seeking only monetary damages of less than $50,000).
• New York (22 New York Codes, Rules and Regulations (NYCRR) §§ 28.1 to 28.16) (court-annexed arbitration for cases with claims of less than $10,000 in New York City and less than $6,000 outside New York City).

Many federal district courts also provide for either optional or mandatory court-annexed arbitration. These courts include:

• The U.S. District Courts for the Southern and Eastern Districts of New York (S.D.N.Y. and E.D.N.Y. L. Civ. R. 83.7) (mandatory court-annexed arbitration for certain cases seeking only monetary damages of less than $150,000).
• The U.S. District Court for the Middle District of Florida (M.D. Fla. L. Civ. R. 8.01 to 8.06) (optional program).
• The U.S. District Court for the Eastern District of Tennessee (E.D. Tenn. L.R. 16.5) (mandatory court-annexed program for certain cases seeking only monetary damages of less than $150,000).

An individual hoping to gain experience as an arbitrator may have the opportunity to serve as an arbitrator in a court-annexed arbitration program, which may also provide training for new arbitrators. Courts generally strive to have arbitrators who are:

• Experienced in the relevant court system, for example, small claims court, even if the individual’s experience is as an advocate instead of as an arbitrator.
• Familiar with the relevant rules.

The federal district courts generally require the arbitrators in the court-annexed arbitration program to be:

• Admitted to the court.
• A member of the state bar for a specified number years (M.D. Fla. L. Civ. R. 8.01(b) (five years); S.D.N.Y. and E.D.N.Y. L. Civ. R. 83.7(a) (five years)).

An individual interested in serving as an arbitrator in a court-annexed arbitration program should consult the local state or district court’s rules to determine:

• If the court has a court-annexed arbitration program.
• The qualification criteria for the arbitrators.

Acquiring Experience in Specialized Arbitration

An attorney or nonattorney professional with expertise in a particular industry or profession may acquire arbitration experience by serving as an arbitrator in cases that require a specialized knowledge of that industry. Disputants in some professions want an arbitrator with a specialized knowledge of the industry, even if the arbitrator has no experience as an arbitrator. The individuals who serve as arbitrators in these specialized areas are usually members of a close-knit professional community, such as accountants, construction professionals, or real estate appraisers (see, for example, Appraisal Institute Guide Note 16 (regarding the use of real estate valuation professionals to serve as arbitrators in appraisal disputes) and Mechanical Contractors Association of America’s National Service and Maintenance Agreement (requiring arbitration at the end of the grievance procedure)).

Professionals in a specialized industry who want experience as an arbitrator should research the industry’s professional organizations to see if the organizations:

• Encourage arbitration of disputes, perhaps by providing standard contract language that contains an arbitration clause.
• Sponsor or facilitate arbitration of industry disputes.

Members of a professional organization who want an arbitrator with industry expertise may look first to the organization’s membership roster when considering potential arbitrators. Even if an industry organization does not expressly encourage or sponsor arbitration to resolve members’ disputes, an industry professional who wants experience arbitrating industry disputes should consider joining the organization.

In addition to professional organizations, some states also require arbitration of specific types of cases, such as attorney fee disputes (for example, California (Cal. Bus. & Prof. Code §§ 6200 to 6206) and New York (22 NYCRR 137.0 to 137.12)). As in court-annexed arbitration (see Acquiring Experience in Court-Annexed Arbitration, above), the arbitrators for these specialized arbitrations are not necessarily required to have experience as an arbitrator. The courts instead require the arbitrators to have practiced law for a stated number of years. Attorneys interested in serving as an arbitrator in these disputes should consult the court’s local rules and state statutes to determine:

• If the state requires arbitration of a specific type of dispute.
• The qualification criteria for arbitrators.

Joining an Institutional Roster

Most of the major U.S. arbitral institutions require their arbitrators to have experience as an arbitrator before joining their rosters (see Acquiring Experience as an Arbitrator, above). Many institutions also have specialized rosters for particular kinds of disputes, such as employment, entertainment, or construction, and the institutions require an arbitrator to have experience in the relevant specialized area before accepting the arbitrator on a specialized roster.

Of the major U.S. arbitral institutions, only FINRA accepts arbitrators with little or no experience and provides training for new arbitrators (see FINRA, below).

The most expeditious way to build a body of work as an arbitrator is to serve on an institutional roster. As soon as an arbitrator is eligible, the arbitrator should apply to join an institutional roster.

FINRA

FINRA, the largest nongovernmental regulator of broker-dealer firms doing business in the United States, administers nearly all securities-related arbitrations in the United States. This private self-regulatory organization exercises comprehensive oversight over all securities firms that do business with the public (see UBS Fin. Servs., Inc. v. W. Va. Univ. Hosps., Inc., 660 F.3d 643, 648 (2d Cir. 2011)). Congress authorized FINRA to ensure that the securities industry in the United States operates fairly and honestly, subject to oversight by the Securities and Exchange Commission (SEC).

FINRA provides a uniform set of rules for arbitrating disputes between FINRA members and their customers in the FINRA Code of Arbitration Procedure for Customer Disputes (Customer Code). The Customer Code, contained in Rule 12000 of the FINRA Rules, aims to provide fairness, procedural protection, and access to remedies that customers otherwise must seek in court.

FINRA also has a separate set of rules, the FINRA Code of Arbitration Procedure for Industry Disputes (Industry Code), for disputes solely involving two or more Members or Associated Persons (for example, cases between brokerage firms or between brokers and brokerage firms). The Industry Code appears in Rule 13000 of the FINRA Rules.

Many FINRA arbitrators are attorneys but not all. Some FINRA arbitrators are professionals in the financial services or brokerage industries, and some have no experience in the legal or financial industries. FINRA arbitrators do not need previous experience as an arbitrator. FINRA requires all arbitrator applicants to have at least:

• Five years of paid work experience.
• Two years of college-level credits.

FINRA requires all prospective arbitrators to complete FINRA’s three-part Basic Arbitrator Training Program before serving on a case. Individuals interested in becoming a FINRA arbitrator may register for the basic training program on the FINRA website.

AAA and ICDR

The AAA is the largest and most important U.S. arbitral institution. It hears primarily domestic disputes but formed the ICDR in 1996 to administer international arbitration and mediation proceedings.

The AAA website lists the qualification criteria for AAA and ICDR arbitrators. To qualify for an AAA or ICDR roster of neutrals, a prospective arbitrator must have:

• A minimum of ten years of senior-level business or professional experience or legal practice.
• An educational degree or professional license appropriate to a particular panel’s field of expertise (for example, international, construction, commercial, or employment).
• Honors, awards, and citations indicating leadership in the relevant field.
• Training or experience in arbitration or other forms of dispute resolution, such as mediation or judicial experience.
• Membership in a relevant professional association.
• Other relevant experience or accomplishments, such as publications.

An applicant to an AAA or ICDR roster also must provide letters of recommendation from at least three industry professionals, including at least one member of that roster.

The size of the AAA and ICDR rosters fluctuates. Over the years, the AAA and ICDR have variously increased the number of neutrals or removed neutrals from the rosters based on factors like:

• The actual or anticipated caseload in a geographic region.
• The number of neutrals who become dormant due to retirement or otherwise.

Even during periods when the AAA and ICDR expand their rosters, space on the AAA and ICDR rosters is limited and competitive. Depending on an applicant’s geographic region, a qualified applicant to an AAA or ICDR roster may have to wait until space becomes available on the roster before the AAA or ICDR accepts the applicant.

Individuals with no experience as arbitrators may raise their profile in the arbitration community and increase their chance of acceptance onto an AAA or ICDR roster by:

• Attending arbitration conventions.
• Joining the arbitration committee of a bar association.
• Serving as counsel on as many arbitrations as possible.
• Taking training courses and webinars offered by the AAA and ICDR.

The AAA Higginbotham Fellows Program provides training, mentorship, and networking opportunities to diverse alternative dispute resolution professionals. The AAA lists Higginbotham Fellows on the arbitrator and mediator lists that the AAA provides to the parties in a case, and parties often select the neutrals listed as Higginbotham Fellows.

The AAA and ICDR offer training courses to arbitrators and practitioners through the AAA University (AAAU). These courses, taught by AAA and ICDR staff and experienced arbitrators, provide ADR continuing legal education (CLE) credit to satisfy the ADR CLE requirements that all AAA arbitrators must meet.

In addition to satisfying annual ADR CLE requirements, the AAA and ICDR require all arbitrators to:

• Pay an annual panel fee.
• Continually update the arbitrator’s resume posted on the AAA website.

CPR

CPR provides arbitration and mediation services in various industries, such as commercial/business, patent and trade secret, and employment. An arbitrator who wishes to join a CPR panel should download and complete an application form from the CPR website and submit it to the New York headquarters of CPR with:

• Two letters of recommendation.
• A letter stating the applicant’s experience with:
  • complex commercial matters; and
  • any other specialty, if the applicant applies to a specialty panel, such as employment.
• A processing fee of $150 plus $50 for each specialty panel.

All CPR arbitrators must:

• Pay an annual panel fee.
• Continually update the arbitrator’s background information on the CPR website.

JAMS

JAMS is one of the main providers of ADR services in the United States. Its panel of full-time neutrals includes many former judges who serve as mediators and arbitrators for commercial disputes JAMS administers. JAMS International provides mediation and arbitration services under the JAMS International Arbitration Rules (effective September 1, 2016).

JAMS does not provide arbitrator training courses. It invites only experienced arbitrators and retired judges to join its panel of arbitrators based on the caseload and number of JAMS neutrals available in the geographic region.