Anne brought a personal injury lawsuit against the snowboarding/sledding
facility where she had rented a sled and broken her leg in a collision.
The facility’s attorney, Bob, successfully moved to dismiss Anne’s personal
injury lawsuit. Basis: before renting the sled, Anne had signed a waiver
of liability that required her to arbitrate her claims. A real tour de
force, thought Bob, because he did not want to try the case in front of a jury.
Plus, he assumed, he would prevail on a summary judgment motion since the
waiver of liability exculpated the snowboarding facility from liability for
accidents on its premises.
Then came more bad news than Bob had ever dreamed possible. The
arbitrator denied the summary judgment motion, concluding that there were
outstanding issues of fact regarding the application of the waiver. Two
months later, the arbitrator at the hearing found in favor of Anne, in a
six-figure award. And then – well, what else could go wrong?
Something far worse already occurred, and Bob was oblivious to the news
. . . .
Three months later, Bob was defending another personal injury claim arising
out of an accident at the same snowboarding/sledding facility. Again, Bob
sought summary judgment, figuring that he would get a “fairer shake” before a
different arbitrator. In response to his summary judgment motion, Bob’s
adversary argued that the waiver-of-liability issue already had been decided
against Bob’s client and attached a copy of the arbitrator’s
denial-of-summary-judgment-motion opinion in Anne’s lawsuit.
It was one thing to try to distinguish the cases on which Bob’s adversary
relied, and they all were easily distinguishable, at least in Bob’s
opinion. But it was a much tougher thing to convince arbitrator 2 that
arbitrator 1 – in connection with similar facts, the same snowboarding/sledding
facility, similar law, and similar legal arguments – had made the wrong
decision. Naturally, Bob lost the summary judgment motion.
And then the boom came down. Bob’s adversary pointed out that he had
received a copy of arbitrator 1’s opinion while surfing the Internet; that the
opinion provided lots of ammunition to any attorney who was considering whether
to bring a claim against Bob’s client; and that lots of other attorneys, armed
with the opinion, were no longer afraid of the waiver-of-liability provision and
were preparing claims against Bob’s client. Put another way: the
waiver-of-liability clause no longer dissuaded attorneys from bringing claims
because arbitrator 1’s opinion, available to anyone who surfed the Internet, was
a roadmap to their success on the legal issue of waiver of liability.
To figure out how Bob disserved his client, we have to go back – not to the
summary judgment brief that he wrote in seeking to dismiss Anne’s arbitration
claim – but to the drafting of the waiver-of-liability provision. In
failing to impose limits on how much information could be disclosed outside the
arbitration hearing, the provision opened the door for anyone to do what Anne’s
attorney did: publicize and post on the Internet the arbitration award, any
arbitrator opinions and anything else about the dispute.
Imagine what would have happened if Bob, at the drafting stage, had added one
more sentence to the waiver-of-liability provision: “Any award, order, decision,
or opinion of the arbitrator shall be confidential, and shall not be shown,
transmitted, distributed or described to any person or entity other than the
parties and their respective counsel.”
“I should have been more careful,” Bob mournfully admitted to his
partner. You think, Bob?
