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    Wisconsin Lawyer
    July 01, 2006

    Legal News and Trends

    Wisconsin LawyerWisconsin Lawyer
    Vol. 79, No. 7, July 2006

    Legal news & trendsLegal News & Trends

    Wisconsin Supreme Court clarifies arbitration ground rules

    On June 13, the Wisconsin Supreme Court issued its decision in Borst v. Allstate Insurance Co., Appeal No. 2004AP2004, Cir. Ct. No. 2002 CV1601 (2006), a case involving core issues related to arbitration likely to influence, if not directly affect, many future arbitrations in Wisconsin. The issues in Borst include, under Wis. Stat. sections 788.10(1)(b) (2003-04) and 788.07, the test for determining an arbitrator's disqualifying "evident partiality," and the source and scope of discovery that arbitrators have the authority to permit or to prohibit.

    Following the recommendations of the State Bar's Alternative Dispute Resolution (ADR) Section in its amicus brief, the court adopted a presumption of impartiality among all arbitrators - including arbitrators unilaterally named by the various parties - to participate on a panel; and held that "evident partiality" cannot be avoided simply by a full disclosure of the circumstances of his or her relationship to the particular party together with a declaration of impartiality. The court also ruled that the parties in arbitration are limited to deposition discovery (under Wis. Stat. § 788.07) and nothing more, absent an express agreement to the contrary, reasoning that arbitrators have no inherent authority to authorize broader discovery.

    Earlier the court of appeals, after considering all the parties' briefs, requested that the supreme court accept certification of the appeal, which it did on January 20 of this year.

    With regard to the "evident partiality" issue, the Borst arbitrator was a named member of a law firm that had been - prior to the arbitration - regularly retained by Allstate. Allstate however argued against disqualification, stating that the arbitrator's full disclosure of these circumstances at the outset of the proceeding, and declaration of impartiality, were a sufficient inoculation against the statute's sanction.

    As to discovery, Wis. Stat. section 788.07 provides that arbitrators may approve a party's petition to a court of record for permission to conduct a deposition, but the parties in Borst disagreed whether arbitrators have the authority, or don't, to authorize and regulate all forms of discovery.

    The ADR Section's amicus brief, inter alia, disclaimed alignment with any of the parties to the appeal and took no position concerning needed factual determinations or the appropriate outcome of their underlying dispute; recognized the wide array of arbitration panel selection criteria and practices including the use of industry experts, party-aligned or "advocacy" arbitrators, and neutrals; and urged the court to articulate a presumption of impartiality required of all arbitrators, absent an explicit agreement of all parties to the contrary. The ADR Section further urged that limitations on discovery be governed by the parties' contract for arbitration; and that the court also recognize arbitrators' inherent authority to authorize and regulate all forms of discovery even absent contractual authority to do so.

    The significance of these types of issues was underscored while the Borst appeal was pending, when the lead story in the Feb. 23, 2006 New York Times Business Section reported the details of a $900 million Citigroup arbitration, involving a related, although factually different issue, viz., arbitrator's failure to disclose allegedly disqualifying relationships ("Arbitrator in Citigroup Case Accused of Conflicts of Interest").

    In June 2005, Presiding Judge Daniel P. Anderson, Wisconsin Court of Appeals, District II, asked the ADR Section to participate by submitting an amicus brief in the case. Following approval of this request by the ADR Section's Board of Directors and the State Bar's Board of Governors, Madison attorney Mark Frankel and his associates at La Follette Godfrey & Kahn researched, prepared, and drafted all the court of appeals and supreme court briefs. Working with attorney Frankel and his firm, as the ADR Section's Amicus Committee, were Howard Bellman, Madison; Natalie Fleury, Wauwatosa; and Barbara Burbach, Gary Gerlach, David Jarvis, Kevin Lyons, and Alan Brostoff, all of Milwaukee.

    Contributing writer Alan Brostoff served as the chair of the ADR Section's Amicus Drafting Committee and was chair of the ADR Section in 2004-05.

    Wisconsin Supreme Court needs volunteers
    Lawyers and public members statewide sought for committee service

    The Wisconsin Supreme Court annually fills more than 300 seats on committees and boards with lawyers and nonlawyers statewide. Volunteers are needed for the Office of Lawyer Regulation (OLR), the Board of Bar Examiners (BBE), and the Judicial Commission. Terms are two- or three-year appointments. Nominations are made in August and March annually.

    "The Court relies on volunteers, both lawyers and nonlawyers, because of their diverse expertise and community presence, to serve on our numerous committees and boards," says Chief Justice Shirley S. Abrahamson. "It's a steep hill to find 300-plus volunteers annually, and currently several committees and boards are operating without full representation. I urge lawyers to volunteer and to speak with their community leaders about serving - even if only for a single term."

    The court has charged the OLR to investigate lawyers who may have violated the Rules of Professional Conduct. The following OLR committees seek volunteers:

    • Board of Administrative Oversight - monitors the fairness, effectiveness, and efficiency of the attorney regulation system; committee of eight lawyers and four nonlawyers meets four to six times a year.
    • District Committees - assist in investigating certain disciplinary cases against lawyers; 16 committees statewide comprise lawyers and nonlawyers.
    • Preliminary Review Committee - reviews investigations and determines if cause exists for the OLR to file a complaint against a lawyer; committee of nine lawyers and five nonlawyers meets four to six times a year.
    • Special Preliminary Review Panel - reviews investigations of grievances against participants in the lawyer regulation system; panel includes four lawyers and three nonlawyers.
    • Special Investigators - investigate grievances against participants in the lawyer regulation system.

    The BBE administers Wisconsin's continuing legal education requirement for lawyers and writes and grades the bar exam. The BBE seeks volunteers for its board of five lawyers, three judges, a law school faculty, and three nonlawyers (nonlawyers do not grade the exam).

    The Judicial Commission needs volunteers to review complaints against judges. The commission comprises a court-appointed trial judge, a court of appeals judge, and two lawyers. The governor, with senate approval, appoints five nonlawyers.

    Individuals who are interested in serving are invited to send a letter with a resume to Cornelia Clark, Clerk of the Supreme Court, P.O. Box 1688, Madison, WI 53701-1688. For more information about these boards and committees, contact Clark at (608) 266-1880 or visit www.wicourts.gov/about/committees/index.htm

    UW Admissions

    Family welcomes third generation to the legal profession. Top, from left: the Hon. Leah M. Lampone, former Milwaukee Circuit Court judge, mother; Attorney James J. O'Donnell, grandfather; Attorney Kevin M. O'Donnell, father; and new Bar member, Attorney Daniel J. O'Donnell. Bottom: New lawyers applaud family members for their support and encouragement immediately following swearing-in ceremony.

    State Bar welcomes 115 new members
    U.W. Law School class sworn in at Capitol

    On June 20, 115 U.W. Law School graduates were admitted to practice. The new lawyers were welcomed to the profession by the Wisconsin Supreme Court justices, U.W. Law School Dean Kenneth B. Davis, then State Bar President D. Michael Guerin, and Wisconsin Board of Bar Examiners Director John E. Kosobucki.

    Following each swearing-in ceremony, Justice Louis B. Butler Jr. spoke to the new lawyers. "We must at all times educate ourselves and conduct ourselves in a manner so that we can continue to point to our chosen vocation as a profession worthy of distinctive recognition. Law is the intangible force that makes justice, freedom, and progress possible. It is the law that brings order into the affairs of people and enables all of us to lift our sights, to develop the arts, to pursue knowledge, to enjoy life among our fellow citizens. Law gives us the individual security that we can obtain in no other way. It is the cement that holds our free society together."

    This brings State Bar membership to 22,212.


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