Arbitrators Have No Authority to Alter the Statutory Scope of Discovery Absent Party Agreement

An arbitrator does not have authority to grant more discovery than is allowed by statute if the parties’ agreement is silent as to the scope of discovery, according to the Wisconsin Supreme Court.

In Borst v. Allstate Insurance. Co., No. 2004AP2004, 2006 WL 1596123 (Wis. June 13, 2006), the parties submitted an insurance claim to arbitration. The parties’ agreement did not contain any clause regarding discovery.

The Court addressed whether an arbitrator could decide the scope of discovery absent an express agreement between the parties. The Wisconsin Arbitration Act has no provision for discovery other than court-ordered depositions. The Court thus found that arbitrators have no inherent authority to “dictate the scope of discovery.” Accordingly, unless they agree otherwise, parties in arbitration are limited to depositions pursuant the statute.

In reaching this holding, the Court reasoned: “We believe the better approach is to leave it to the parties, in the future, to ensure arbitration agreements are clearly drafted, and detail the necessary components and procedures of the desired arbitration.”

The Court was wary of turning arbitration into “another trial system” and diminishing the efficiency gains of arbitration. Here, the claim involved a small amount and the amount of information was also limited, so extensive discovery was not necessary.