Arbitral Immunity Established in Texas in Case of First Impression

The Austin Court of Appeals establishes an important precedent for the Texas law of arbitration in finding that arbitrators are entitled to immunity from lawsuits similar to the immunity that judges have. The court found this broad based immunity is important to the arbitration process as a whole, which is in accord with the public policy of Texas. The need to decide this issue arose when Blue Cross challenged an arbitrator's failure to disclose his prior association with the counsel for one of the parties and sought to recover its attorneys fees from the arbitrator personally. (The court also questioned whether it was really an attempt to set aside the award.) Blue Cross v. Juneau (Tx. App - Austin 7/24/03). If this decision had gone the other way it would have caused havoc to employers wanting to resolve disputes through arbitration rather than litigation.