Table of Contents
- 7 Arbitrator-Selection Mistakes That Can Change the Whole Direction of an Arbitration
- Table Of Contents
- 1. Treating Arbitrator Selection Like A Paperwork Step
- 2. Looking At Resumes But Not At Decision-Making Style
- 3. Ignoring Disclosure Issues Unless They Look Extreme
- 4. Overvaluing A Familiar Name
- 5. Failing To Match The Arbitrator To The Real Dispute
- 6. Using Strikes And Rankings Without A Coherent Strategy
- 7. Waiting Too Long To Get Counsel Involved
- Why This Stage Changes The Direction Of The Case
- A Final Tip Before The Lists Arrive
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7 Arbitrator-Selection Mistakes That Can Change the Whole Direction of an Arbitration
Picking an arbitrator can look procedural on the surface. A list arrives. Names get reviewed. Strikes and rankings go in. Then the case moves forward.
In reality, that stage often influences the entire shape of the arbitration: how discovery is handled, how hearing time is managed, how credibility issues are viewed, and how comfortable each side feels with the process itself. In forums like FINRA, the selection system is structured, but party choices still matter a great deal. FINRA’s current rules use a random list-selection algorithm, then allow parties to strike and rank the names that remain on separate lists. The Director then combines those rankings to appoint the panel, making every effort to appoint the highest-ranked available arbitrators from the parties’ combined lists. FINRA and FINRA’s arbitrator-selection overview.
If you want a fuller overview of how list generation, strikes, and panel makeup work together, this more detailed explainer on how panel composition and list selection can shape the case gives helpful background before diving into the mistakes below.
Scroll to the bottom for every post in this series.
Table Of Contents
1. Treating Arbitrator Selection Like A Paperwork Step
One of the most common mistakes is assuming the real fight starts later.
It often starts here.
Arbitrators do more than hear testimony and sign an award. They shape scheduling, resolve procedural disputes, decide evidentiary issues, and influence whether a proceeding feels efficient or chaotic. FINRA describes arbitration as a process in which arbitrators decide cases on the facts and merits, while also handling motions and hearing management along the way. FINRA’s arbitration-process overview.
That practical authority matters because arbitration outcomes are usually hard to unwind. Under the Federal Arbitration Act, a court may vacate an award only on limited grounds, including issues like corruption, fraud, certain misconduct, or “evident partiality.” Ordinary dissatisfaction with how the case was handled generally is not enough. 9 U.S.C. § 10.
Here’s what this often means in real life: if a party treats selection casually, it may be stuck with a decision-maker whose case-management habits, tolerance for motion practice, or approach to witness credibility makes the rest of the arbitration feel very different from what that party expected.
In general terms, parties that approach this phase carefully often look beyond biography lines and ask questions like:
- How does this arbitrator handle scheduling pressure?
- Does this person appear comfortable with document-heavy disputes?
- Is there a history of thoughtful disclosures and responsiveness?
- Does the person’s background fit the actual business or industry issues involved?
A lawyer with documented experience in arbitration often approaches that stage less like clerical work and more like early case strategy.
2. Looking At Resumes But Not At Decision-Making Style
A polished resume can be misleading.
An arbitrator may have impressive credentials and still be a poor fit for a particular dispute. A retired judge, senior lawyer, academic, or industry professional may bring value, but selection often turns on how that person actually runs a case.
FINRA provides background information with its lists, including employment history for the past 10 years and other details, and parties may request additional information about an arbitrator. FINRA Rule 10308 historical description of the list process. AAA and CPR similarly build selection systems around disclosures, qualifications, availability, and party review of candidate information rather than title alone. AAA arbitrator-selection information, CPR arbitration services.
The mistake is stopping at credentials.
Two arbitrators with similar resumes may differ sharply in the way they:
- control hearings,
- react to aggressive advocacy,
- approach discovery disputes,
- interpret confidentiality expectations,
- handle expert testimony, or
- view procedural fairness in close calls.
That difference can alter settlement posture, hearing preparation, and even the amount of money spent before the award.
This is especially important in active arbitration forums. FINRA reported 2,597 new arbitration case filings in 2025, including 1,643 customer cases and 954 intra-industry cases. It also reported an overall turnaround time of 13.4 months for cases closed in 2025, with regular hearing decisions averaging 15.9 months. FINRA 2025 dispute-resolution statistics. With that much activity, efficiency and case-management style are not abstract concerns.
A party may therefore want to think less in terms of “Who looks impressive?” and more in terms of “Who appears equipped for the kind of dispute this actually is?”
3. Ignoring Disclosure Issues Unless They Look Extreme
Another mistake is treating conflicts and disclosures as a problem only when there is an obvious personal or financial tie.
Arbitrator disclosure obligations are broader than that. JAMS states that an arbitrator should promptly disclose actual or potential conflicts of interest, relationships, or other information that could reasonably lead a party to question impartiality, and that those disclosure obligations continue throughout the arbitration. JAMS ethics guidelines. AAA likewise explains that the obligation to disclose remains in effect throughout the case, and its challenge process considers whether a disclosure reflects a conflict that is direct, continuing, substantial, or recent. AAA arbitrator-selection information, AAA disclosure fact sheet. CPR’s disclosure guidelines also describe broad categories parties and arbitrators may consider, including professional associations, prior firm relationships, social media, and changed circumstances as new participants enter the case. CPR disclosure guidelines.
That matters because selection errors do not always involve dramatic misconduct. Sometimes the issue is a relationship or recurring professional connection that looked minor at first, but later becomes central after a witness list changes, counsel appearances expand, or a party learns more context.
Some people in similar situations focus on:
- repeat appointments involving the same firms or parties,
- prior work with experts or co-counsel,
- former law-firm relationships,
- gaps or ambiguities in disclosure language,
- whether follow-up questions were answered clearly.
This area also matters because post-award challenges face a high bar. Federal law recognizes “evident partiality” as a basis to seek vacatur, but by that point the arbitration has already happened. LII’s text of 9 U.S.C. § 10. In practical terms, a careful review before appointment is usually far more valuable than hoping a later court challenge will fix the problem.
4. Overvaluing A Familiar Name
Familiarity can feel safe. Sometimes it is. Sometimes it is not.
A known arbitrator may come with a reputation for efficiency or subject-matter knowledge. But familiarity can also cause parties to overlook warning signs, assume too much from anecdotal experience, or recycle preferences from a different type of case.
This happens in both institutional and securities arbitration. FINRA’s system is designed to generate lists randomly from the appropriate roster for the hearing location, after which parties strike and rank names. FINRA Rule 12400. The point is not simply to reach a familiar name. The point is to identify a workable fit from the available pool.
In broader arbitration practice, administrators also emphasize vetting for availability and disclosures, not just profile prestige. CPR says its slate-building process screens neutrals for rates, disclosures, and availability up front, with room for parties to request more information about expertise. CPR arbitration services. JAMS and AAA similarly frame selection around neutrality, conflicts review, and procedural suitability. JAMS neutrality overview, AAA disclosure guidelines.
A familiar name can become a problem when parties assume:
- prior service in one kind of matter translates cleanly to another,
- a reputation for “moving cases” will help rather than hurt,
- prior positive interactions predict neutrality in a new dispute,
- a well-known profile is automatically the strongest fit.
Here’s what this often means: the “safe” choice may bring habits that favor a very different kind of evidentiary record, witness presentation, or procedural pace than the current case requires.
5. Failing To Match The Arbitrator To The Real Dispute
Not every arbitration is really about the causes of action listed in the statement of claim. Sometimes the true dispute is about industry custom. Sometimes it is about damages methodology. Sometimes it turns on one witness. Sometimes it is really a document case wearing a fraud label.
That is why “subject-matter experience” can be too vague.
The better question is often: What kind of decision-maker fits the dispute this case is likely to become six months from now?
FINRA’s list process allows parties to request that lists include arbitrators with designated expertise classifications in the system. FINRA Rule 10308. Chair-qualified public arbitrators in FINRA customer disputes also meet specific eligibility requirements, including training and prior arbitration-through-award experience. FINRA Rule 12400. Those structural features can help, but they do not eliminate the judgment call.
A poor fit often happens when parties focus on the wrong layer of expertise, such as:
- securities experience when the real issue is forensic accounting,
- construction experience when the actual fight is scheduling and delay analysis,
- employment-law knowledge when the hearing will revolve around witness credibility,
- commercial-litigation prestige when the panel really needs patience with technical records.
This is one reason lawyer involvement during selection can matter so much. An attorney who regularly handles highly similar matters may be better positioned to identify what kind of arbitrator profile fits the likely pressure points of the case, not just its caption.
6. Using Strikes And Rankings Without A Coherent Strategy
A strike-and-rank process can create the illusion of precision. In reality, it is easy to misuse.
FINRA’s current approach gives parties separate lists and allows them to strike names and rank the rest. The Director then combines those rankings and appoints the panelists based on the combined results, making every effort to appoint the highest-ranked available arbitrators. If necessary, FINRA may appoint from additional names generated randomly by the list-selection algorithm. FINRA arbitrator-selection overview, FINRA Rule 12400. FINRA previously expanded the standard lists from eight to 10 arbitrators while keeping four strikes per party, a change it said was intended to give parties more control and increase the likelihood that names from each initial list would remain after striking and ranking. FINRA Regulatory Notice 10-37.
The mistake is thinking that “ranking” simply means placing favorite names first and striking the obviously bad ones.
In practice, a strong strategy often considers:
- how the other side is likely to view the same list,
- whether a middle-ranked candidate is more realistically appointable,
- whether over-striking may push the process toward random replacement,
- whether the party is trying to maximize fit or merely avoid risk,
- how chair selection differs from public or non-public slots.
This is one of the places where process knowledge changes outcomes. For example, FINRA explains that if there are not enough available arbitrators from the combined lists, the Director may appoint required arbitrators from names generated randomly by the algorithm. It also explains how the panel can be completed if all non-public arbitrators are collectively stricken or unavailable. FINRA arbitrator-selection overview.
A party that approaches strikes emotionally can end up reducing its own control.
7. Waiting Too Long To Get Counsel Involved
Parties sometimes contact arbitration counsel after the list deadline is already near, or after rankings have gone in.
That can be costly, because arbitrator selection is often one of the few points in arbitration where informed preparation may shape the forum before substantive rulings begin. Once the panel is appointed, later corrections are narrower and more disruptive.
Timing matters in active arbitration systems. FINRA says the lists are sent at the same time to all parties and are returned within the prescribed deadline, and additional information requests may or may not toll that deadline depending on the circumstances. FINRA Rule 10308. AAA and CPR also tie disclosure review and objections to relatively short windows in their administered processes. AAA disclosure fact sheet, CPR administered arbitration rules.
By the time the hearing is underway, complaints about fit often become expensive hindsight.
This timing issue becomes even more significant when you consider how many arbitrations never reach a merits award. FINRA reported in March 2026 that from January 1, 2021 through December 31, 2025, customer disputes closed by settlement before award in 71% of cases, while only 13% closed by award. FINRA Regulatory Notice 26-06. That does not mean arbitrator selection is less important. If anything, it suggests the opposite: arbitrator choice may influence leverage, pacing, and how each side values settlement long before a final award exists.
An attorney with relevant arbitration experience may help evaluate disclosures, assess the likely fit of each candidate, think through strike-and-rank strategy, and spot procedural issues before the window narrows.
Why This Stage Changes The Direction Of The Case
Arbitration often gets described as streamlined. Sometimes it is. But streamlined does not mean low-stakes.
The decision-maker or panel can influence:
- whether discovery remains contained or expands,
- whether motion practice gets traction,
- how experts are received,
- whether hearing time is used tightly or loosely,
- how settlement discussions evolve,
- whether the process feels even-handed.
And arbitration volume is not small. JAMS reported handling 19,464 new cases in 2023, with most arbitrations conducted under its own rules. JAMS caseload report. AAA has also continued publishing annual reports and caseload updates reflecting sustained demand across commercial, consumer, employment, and mediation matters. AAA annual reports.
In other words, arbitrator selection is not a niche technicality. It is one of the earliest decisions in a process used every day to resolve high-value and high-impact disputes.
A Final Tip Before The Lists Arrive
One useful way to think about arbitrator selection is this: don’t just ask whether a candidate is qualified. Ask whether that candidate is qualified for this dispute, at this stage, with these facts, against this opposing party, under these rules.
That is a narrower and more practical question.
It also tends to produce better conversations with counsel, because the discussion moves from reputation and assumptions to fit, disclosures, availability, procedural style, and documented experience with highly similar matters.
Arbitrator selection can change the whole direction of an arbitration because the forum is not just a backdrop. It is part of the case strategy from day one.
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