|
| 5. Section 21(e) addresses concerns respecting arbitral |
| remedies of punitive or exemplary damages because of the |
| absence, under present law, of guidelines for arbitral punitive |
| awards and of the severe limitations on judicial review |
| arbitration awards. Recent data from the securities industry |
| provides some evidence that arbitrators do not abuse the power |
| to punish through excessive awards. See generally Thomas J. |
| Stipanowich, Punitive Damages and the Consumerization of |
| Arbitration, 92 Nw. L. Rev. 1 (1997); Richard Ryder, Punitive |
| Award Survey, 8 Sec. Arb. Commentator, Nov. 1996, at 4. Because |
| legitimate concerns remain, however, specific provisions have |
| been included in Section 21(e) that require arbitrators who |
| award a remedy of punitive damages to specify in the award the |
| basis in fact for justifying, in law for authorizing, and the |
| amount of the award attributable to the punitive damage remedy. |
| Again, it should be noted that parties can waive the |
| requirements set forth in Section 21(e) by agreement. |