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A monthly publication from the Wisconsin Society of Professional Engineers
July 2, 2007 Edition
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Party Appointed Arbitrators are
Presumed to be Impartial |
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WSPE's President Corner |
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As I write my first President's message, your WSPE leaders are fresh from the Leadership Conference held on June 22nd. The purpose of the conference was to outline goals for the year and begin to develop action plans to accomplish them. Before I fill you in on the details, however, I want to mention the most pressing item – we still need two officers for the WSPE Executive Committee. We currently have vacancies in the President Elect and Treasurer positions. As I told the Leadership Conference attendees, assuming a leadership position in a professional society like WSPE is a low-pressure way to learn about leadership and about how organizations work, how to interact with people to achieve common goals, how to compromise when people have different views about an issue, how to mobilize people to support or oppose an issue, and how to put on events such as conferences and competitions. In short, it helps develop skills that can help anyone do their job better and enhance their career development. It also provides opportunities to meet and socialize with other professionals who can become resources, mentors, and friends. If you are interested in either of these positions or would like more information, please contact me at 262-548-8755 or jbuggs@ch2m.com. I would like to fill these positions prior to our first Executive Committee teleconference scheduled for July 18th. Before I outline my goals for this year, I want to give a huge thanks to Robb Peebles, our outgoing President, for all of his hard work and dedication over the past year. He championed several initiatives that will be a tremendous help as we continue the work on some goals he set last year while also adding a few new ones. I also want to thank the incoming and returning board members. We have a great group of people on the State Board and I am confident we will make significant progress on all of our goals. Now, on to my goals for the year… 1. Improve communications and coordination between the State Board and chapters. The main purpose here is to make life easier for everyone. Tasks will include getting information about state and chapter activities in one location for quick and easy reference and getting the chapters and state on the same schedule for things like elections. End products will include an Administrative Manual and a clearinghouse calendar. Contact Chris Stamborski at 262-786-1777 or chris.stamborski@rasmith.com with suggestions or if you would like to be part of this very important initiative. 2. Implement the new Supporting Organizations Program. The state board has been working for over a year to develop a new program that will allow organizations to provide financial support for the various programs and activities sponsored by WSPE at the state and chapter levels while significantly reducing the number of times they are approached in a given year and the level of effort chapters have to expend. The program is scheduled to roll out in July and will provide an annual solicitation for sponsorship with a variety of benefits to sponsors, including providing credit to organizations with WSPE members. This is definitely a win-win program and we are excited to be able to offer it to our supporters. Contact me at 262-548-8755 or jbuggs@ch2m.com with any questions. 3. Increase membership. This is an extremely important initiative. Members are the heart of an organization like WSPE and it is critical that we have a continual flow of new members to grow the organization and replace members who pass away or move out of state. Steadily increasing membership is the sign of a truly vital organization. NSPE has some programs to encourage membership, including the Give Back Get Back Program, where a member who gets two new members to join will receive free dues for a year, and the Enterprise Program that provides a 10% discount on dues for organizations with 10 or more members. Visit www.nspe.org for more information on these programs. You may also contact Matt Richards at 608-251-4843 or matt.richards@strand.com with any questions about membership. 4. Increase member involvement. Equally as important as increasing membership is increasing member involvement. No professional society can survive just because members pay dues. NSPE and WSPE rely heavily on volunteers to carry out their programs. Without active members, there would be no real value to your membership. We have many programs that could benefit from even a small amount of time from our members, so please give serious thought to giving back to your profession by serving your professional society. Please contact Nancy Short at 414-908-4950 x135 or n.short@wspe.org when you are ready to get involved. 5. Expand education outreach activities. Speaking of serving your society… WSPE participates in a variety of programs related to education, including MATHCOUNTS, Engineers Week, Future City, science fairs, scholarship programs, and presentations to schools about engineering, to name a few. This year we will be working to expand and coordinate our activities across the state in an effort to reach out to more students and encourage them to pursue a career in engineering. Please consider how you might be able to help and contact John Parisi at 920-496-6090 or jparisi@foth.com for more information. 6. Improve the image of WSPE through awards, website, Discovery Conference, and Governors New Product Awards. Engineers are some of the most dedicated professionals in the world. They also happen to be some of the most humble. Well, enough of that! It's time to break out of our shells. All of us know someone who has done something noteworthy or has extensive accomplishments. Start thinking about who you would like to nominate for an award so when the next award solicitation comes around at the end of the year, you'll be ready! We are also looking for help with maintaining the website and organizing our yearly conferences. Please contact Chad O'Donnell at 414-278-3347 or codonnell@hga.com to find out how you can help. 7. Expand legislative activities. The missions of WSPE include promoting engineering licensure and protecting the engineering profession. A key to fulfilling these missions is monitoring legislation that has the potential to affect engineers, organizing support or opposition for legislation, and assisting lawmakers by providing technical expertise and factual data as they draft bills. Current issues include possible changes to the paths to licensure in Wisconsin and the implementation of continuing professional competency requirements. Now is the time to get involved as these issues take shape. Contact Tracy Pinkowski at 262-370-9268 or tpinkowski@tegengineering.com to learn how you can get involved with the Legislative Committee and its activities. I'll conclude by thanking all of our WSPE members, leaders, and supporters. I encourage everyone to get involved and dare to make a difference! Thank you. James Buggs |
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WSPE Welcomes State Board Members for 2007-2008 |
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| The WSPE State Board will have some new members as well as some returning veterans for the 2007-2008 term. Board members, along with their assigned portfolio if applicable, are listed below. Please feel free to contact any Board member with questions related to a particular portfolio or contact our Executive Director, Nancy Short, at n.short@wspe.org. President (Administration portfolio) - Mr. Jim Buggs, P.E., CH2M
HILL, jbuggs@ch2m.com |
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Marc Annacchino, P.E., Shares His Expertise with WSPE Members in a Whitepaper Titled "The Pathways To Business and Product Development" |
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We are delighted to have a two-part paper from expert Marc Annacchino, P.E., in the July and August issues of the WSPE E-news. Marc was the director of the Business Excellence Consortium and the author of The Pursuit of New Product Development: The Business Development Process (Pub: Elsevier 2007). The following is a summary of the paper. Business dynamics are causing changes to business methods, products, and their value propositions. We are seeing increasing competitive pressure driven by supply side overcapacity - worldwide. The general overcapacity in many markets is causing an unprecedented frenzied fight for market share. This forces a demand for technology absorption by Research departments and requirements for seamless transfer of technology to Development along reduced timelines. The high cost of technology absorption and transfer is driving companies to use cooperative ventures more and more. This paper outlines some of the issues and how companies can begin to address them in cooperation with associates, members, stakeholders, and suppliers. To see part one, please click here. |
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SPONSOR |
Party Appointed Arbitrators are Presumed
to be Impartial |
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| Many written contracts entered into by and between professional engineers and their clients provide for the arbitration of disputes. Some of these contracts will contain arbitration provisions permitting the owner to select one arbitrator and the professional engineer to select the second arbitrator with the two arbitrators selecting a third. The selection provisions often provide that if the first two arbitrators cannot agree on the third arbitrator, the circuit court shall appoint him. The decision of any two arbitrators would determine the outcome. Additionally, such arbitration selection provisions may include obligations to pay the arbitrators. It would not be unusual to find provisions that compel the owner to pay for its appointed arbitrator, the professional engineer to pay for its appointed arbitrator, and the two parties to share the fees of the third appointed arbitrator. Recently, an arbitration award was reviewed by the Wisconsin Supreme Court in Borst v. All State Insurance Company, 717 N.W.2d 42 (Wis. 2006). While that case involved the arbitration of a dispute between an insurer and an insured, the issues before the court dealt with the impartiality of the party-appointed arbitrators and the law announced by the Wisconsin Supreme Court is applicable to party-appointed arbitrators in contracts between owners and professional engineers. The Wisconsin Supreme Court made six rulings dealing with the issue of whether a party-appointed arbitrator must be an impartial neutral. The Supreme Court held: 1. all arbitrators are presumed impartial unless the parties contract for non-neutral arbitrators, or the arbitration rules otherwise provide for non-neutral arbitrators; 2. evident partiality due to a relationship between an arbitrator and a party cannot be avoided simply by full disclosure at the outset and a declaration of impartiality; 3. unless the parties have contracted to use a specific arbitrator,
pre-arbitration challenges to arbitrators selected by the parties
are permissible; 4. insured did not forfeit his right to make a post-arbitration challenge to arbitrator's appointment by insurer; 5. arbitrator who had ongoing attorney-client relationship with insurer that selected him was evidently partial, such that arbitration award had to be vacated; and 6. circuit court must vacate an arbitration award due to evident partiality if based on evidence a reasonable person would have serious doubts about the impartiality of the arbitrator. In the Borst case, the parties selected arbitrators as provided for in the insurance policy. The insured selected one arbitrator and the insurer selected the second. The insured immediately objected to the arbitrator selected by the insurer because the insurer was a client of that arbitrator's law firm. The lawyer appointed by the insurer disputed the insured's contention that he could not be neutral. The two selected arbitrators then selected a third arbitrator. In resolving the insured's objection to the appointment of an attorney from the law firm that represented the insurer, as a second arbitrator, the Wisconsin Supreme Court adopted some new law. It said, "The presumption we adopt today [of impartiality] also puts Wisconsin in line with ‘the recent trend away from non-neutral party-appointed arbitrators and the heightened expectations of independents and neutrality of commercial arbitrators.'" The court also noted that the presumption of impartiality was in accordance with § 788.10(1)(b) of the Wisconsin Statutes which discusses the vacation of an arbitration award "where there was evident partiality or corruption on the part of the arbitrators, or either of them." The court interpreted that language to mean that every arbitrator on the panel is supposed to be unbiased absent express contractual language or applicable arbitration rules to the contrary. The court noted that both neutral and non-neutral arbitrators in the arbitration process have been utilized, generating a great deal of confusion. In an effort to resolve that confusion the court interpreted the Wisconsin statutory language to mean that every arbitrator on the panel is presumed to be unbiased. It concluded that statutory language demonstrated that the legislature did not contemplate partisan arbitrators. The court clarified that it did not regard its prior decisions on tripartite arbitration panels to mean that only the third arbitrator appointed was to be an impartial independent. Rather, the court concluded that there was a presumption under the statutes that all three arbitrators in a tripartite arbitration panel are presumed impartial. By announcing its decision of the presumption of impartiality the court noted that Wisconsin was in line with "the recent trend away from non-neutral party-appointed arbitrators and the heightened expectations of independents and neutrality of commercial arbitrators." The court then turned to whether in the case before it there was evidence of partiality because the arbitrator appointed by the insurer was acting as an attorney for the insurer on other cases. The insurer argued that under a literal reading of Wisconsin case law there was no evident partiality based upon that disclosure alone. The court concluded that the insurer's position was entirely unreasonable. The court rejected the insurer's argument that all that was required was disclosure that the arbitrator it appointed was acting as its attorney in other cases. The court noted that the parties had agreed that the entire panel was intended to be neutral. The court went on to approve the procedure of making a pre-arbitration challenge to the appointment of a party-appointed arbitrator. The court concluded that in most instances, in the interest of fundamental fairness, a challenged arbitrator should simply be replaced by the party appointing him. The court also approved the procedure of seeking court relief if a party refuses to replace the challenged arbitrator. The Wisconsin Supreme Court clarified that it was adopting the rule that unless the parties have contracted to use a specific arbitrator, pre-arbitration challenges to arbitrators selected by the parties are permissible. The court noted that such pre-arbitration challenges promote efficiency in the arbitration process when a party reasonably objects to the use of an arbitrator selected by an opposing party. The court stated that it believed pre-arbitration challenges were especially relevant in cases where the parties agree that the arbitrators are all to be neutral, and if such pre-arbitration challenges do not result in a party replacing the challenged arbitrator, the general equity powers of the circuit court may be sought to obtain a court order requiring the party to select another arbitrator. The court also noted that arbitrators should always continue to disclose relevant relationships in accordance with the established Wisconsin law. After such disclosure the burden is on the opposing party to object. A failure to object to the selection of an arbitrator when information is timely disclosed may act as a waiver of any subsequent post-arbitration challenge based on the disclosed information. However, the court noted that post-arbitration challenges are permissible under the Wisconsin Statutes based on circumstances of the arbitration itself or on information discovered after the arbitration. Professional engineers who are a party or a party-appointed arbitrator should therefore be expected to disclose any impartiality they believe may exist by virtue of past relationships. Absent an objection, it will be presumed that the party-appointed arbitrator is indeed impartial, i.e., a neutral. Attorney Robert J. Kay is the senior partner in the law firm of Kay & Andersen, S.C. and devotes his time to representing professional engineers, architects, contractors, material suppliers and owners of construction projects. Please feel free to contact him at (608) 833-0077 or at rjkay@kayandandersen.com. |
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Welcome New Members |
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| The WSPE board of directors would like to extend
a heartfelt welcome to the following new WSPE members: |
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