Originally from:

AAA Handbook on Arbitration Practice - Second Edition

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CHAPTER 35

2004 CODE OF ETHICS FOR
COMMERCIAL ARBITRATORS EXPLAINED

Bruce E. Meyerson and John M. Townsend

I. Introduction

More than a quarter century ago, a small group of arbitrators and
practitioners, representatives of the American Bar Association and
American Arbitration Association, met over a long weekend, under the
leadership of Judge Howard Holtzmann, to draft an important statement
defining ethical duties for arbitrators in commercial disputes.1 Their
effort became the 1977 AAA-ABA Code of Ethics for Arbitrators in
Commercial Disputes (the 1977 Ethics Code). It has proved to be an
invaluable ethical framework for arbitrators and others involved in the
dispute resolution field.

Many federal and state courts have cited the 1977 Ethics Code with
approval as providing the preeminent definition of standards of conduct
in the field.2 The Seventh Circuit was careful to note, however, that the
Code does not have the force of law: “Although we have great respect
for the Commercial Arbitration Rules [of the AAA] and the Code of
Ethics for Arbitrators, they are not the proper starting point for an inquiry
into an award’s validity…. The arbitration rules and code do not have
the force of law.”3

Because the practice of arbitration has developed significantly since
1977, committees of the ABA and representatives of the AAA began to
review whether changes in the laws governing arbitration, the increasing
globalization of commercial transactions, and changes in the public
perception and expectations of arbitration required revisions to the 1977
Ethics Code. The ABA efforts were aided by representatives of the
International Institute for Conflict Prevention and Resolution (CPR), the
College of Commercial Arbitrators, and the National Arbitration Forum.

After several years of study and negotiations, agreement was reached
by a joint ABA-AAA working group on a proposed revision (the 2004
Revision).4 The Executive Committee of the AAA Board of Directors
approved the 2004 Revision at its September 2003 meeting, and the ABA
House of Delegates approved the revisions at the ABA Mid-Year
Meeting in February 2004.5 The 2004 Revision became effective March
1, 2004. The 2004 Revision preserves the style and format, and much of
the language, of the 1977 Ethics Code. It is called a revision, rather than
a new document, to signal its continuity with the many unchanged
provisions of the 1977 Ethics Code and respect for the degree of judicial
acceptance that it has achieved. All provisions of the 2004 Revision are
subject to any contrary principles that may be found in governing law or
applicable arbitration rules and also to the right of the parties to any
arbitration to reach agreement on different rules and standards.