Essay on A Psychological Insight Into Arbitrator Decision Making

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A Psychological Insight Into Arbitrator Decision-making:
A Compromise to Human Nature and How to Fight Back

I. Introduction
Arbitration is at present the best means of peacefully establishing and preserving the rule of law in the world marketplace.1 As an inherent feature of modern arbitration, the principle that arbitrators have to be and remain impartial and independent throughout the entire proceedings.2 Arbitrators are supposed to base their decisions on facts, evidence and the applicable law to reach fair decision. They are not expected to compromise.3
However, first take a look at judges, we will see it has been long argued that judges do not merely find facts or apply legal principles in a completely accurate and unbiased fashion.4 Similarly, as mentioned in 2013 ASA annual conference, it can not be denied that there still are arbitrators for whom, for whatever reason, it is unthinkable that they can decide the case in whole or in party against the party that had designated or appointed them5.
Therefore, though expected, facts, evidence and law are not the only influences. Studies show that the judgments of even highly educated professionals are influenced by psychological factors that affect how they view evidence and how they reach decisions. As a result, these factors can influence outcomes, albeit quite unconsciously and without any intentional distortion.6
Robert Coulson, the president of American Arbitration Association, wrote in 1990, saying, “Most studies of arbitration are devoted to discussions about the applicable law or the various procedural rules. It seems far more important to try to analyze how and why arbitrators make up their minds.”7 However, in the past two decades, there are more and more studies discussing the psychological impact in decision-making, with some of them specifically focusing on the interface between judge or arbitrator decision-making and psychology.
As far as concerned by this article, the studies or surveys include:
The 2012 Arbitrator Survey 8conducted by Edna Sussman (hereinafter “The 2012 Arbitrator Survey”);
A questionnaire conducted by Sophie Nappert & Dieter Flader in 20099 (hereinafter “The 2009 Questionnaire”);
A Study conducted by Stephanie E. Keer; Richard W. Naimark on 54 international arbitration awards in 2001 (hereinafter “The 2001 International Arbitration Award Study”);
A study which carried by Chris Guthrie, Jeffrey Rachlinski & Andrew Wistrich in 1999, covering 167 federal magistrate judges10 (hereinafter “The 1999 Study”);
Also another study conducted by them in 2005, covering 265 trial court judges11(hereinafter “The 2005 Study”);
CCA/Straus Institute Survey on Arbitration Practice12 conducted by College of Commercial Arbitrators and Straus Institute for Dispute Resolution in 2014, covering 134 arbitrators (hereinafter “The CCA/Straus Survey”);
Most of the studies have explained a theory that the decision-making process involves both intuition and deliberation, both of which are indispensible. Human brain has both an intuitive and a deductive component, which are described as two horses by Phaedrus Plato, a good horse governed by reason and a bad horse that hurries along violently and without control.13 These “two horses” are also studied by recently Nobel Prize winner Kahneman and were called as system 1 and system 2. He emphasized human beings can not function without any of the two and that human decision-making operates with system 1 making intuitive judgments, which are sometimes modified by system 2’s deliberative process.14
And that is the reason why, as mentioned at the beginning, though being expected to rely only on facts, evidence and law, arbitrators also make decisions on the basis of judgmental strategies that conform to psychological rules.
More importantly, attention shall be given to those psychological factors at play in the arbitral process because it is exactly where certain biases arise, even without the notice by the decision
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