Arbitration Awards

Not long ago the Colorado Supreme Court ruled that arbitration awards need not contain formal findings of fact and conclusions of law similar to those required of trial courts in non-jury cases. Columbine Valley Construction Company v. Board of Directors, Roaring Fork School District RE-1, 626 P.2d 686 (Colo. 1981).

That ruling follows the general law in this country which recognizes that arbitrators are not expected to be skilled judges or lawyers and that the speed, informality and expediency of the arbitration process would be undermined by requiring formal opinions. What is necessary for an adequate award?

Usually arbitrators’ written awards sparsely declare something like: “Calamity Construction Company is awarded $26,872.41.” That may be sufficient if Calamity’s claim was in the exact dollar amount. Then Calamity and the losing party would know exactly the basis for the arbitrator’s decision – Calamity won.

But what if Calamity had fourteen claims submitted to the arbitrator(s) and its opponent had a slug of counterclaims as well? If the award simply said “Calamity Construction Company is awarded $183,291.47” without more, the parties would know only the winner, but otherwise would be totally in the dark.

The lump sum award last-mentioned is what this writer would classify a “slot machine” award. It obviously would have required less effort for the arbitrators, but the parties to the arbitration should be entitled to at least know which claims they won or lost and have some basis upon which to understand the result.

Unfortunately, even the rules of the renowned American Arbitration Association remain silent about the necessary content of arbitration awards. A recent Colorado Court of Appeals decision agrees.1 Fortunately, the Denver Regional AAA office is reportedly asking arbitrators to be more specific in their awards when dealing with multiple claim arbitrations.

1 Ash Apartments v. Martinez, 656 P.2d 708 (Colo. App. 1982).