When deciding whether to initiate a lawsuit against an arbitrator and/or arbitration organization, such as the American Arbitration Association (“AAA”), one of the key and essential issues which must be considered by the plaintiff is whether his/her/its claims are precluded by the doctrine of arbitral immunity.
Under Michigan law, the doctrine of arbitral immunity grants arbitrators, and boards, associations and/or commissions which sponsor arbitrations and make arbitration facilitates available, “immunity from private actions for damages against them for judicial acts done in arriving at their award” and they “are not liable for negligence, fraud, or misconduct, even where it is sufficient to invalidate the award.” Boraks v. Am. Arbitration Ass’n, 205 Mich. App. 149, 151, 152-153 (1994); see also International Medical Grp. v. American Arbitration Ass’n, 312 F.3d 833, 837-839 (7th Cir. 2002).
Further, under the Michigan Uniform Arbitration Act, MCL 691.1681 et seq. (“MUAA”), “An arbitrator or an arbitration organization acting in that capacity is immune from civil liability to the same extent as a judge or a court of this state in acting in a judicial capacity.” MCL 691.1694(1). This immunity granted by the MUAA “supplements any immunity under other law.” MCL 691.1694(2). Thus, in Michigan, arbitrators and arbitration organizations, such as the AAA, enjoy the arbitral immunity granted by the MUAA as well as the arbitral immunity granted under Michigan common law.
As shown above, a party must take great care in considering whether to initiate a lawsuit against an arbitrator and/or arbitration organization in connection with their administration of arbitration proceedings, especially where they are granted arbitral immunity under the MUAA and Michigan law for actions performed in their judicial capacities to reach, and issue, an arbitration award.