Human judgment is inherently fallible, and professionals may naturally make errors, including those arising from bias and noise. Noise refers to a flaw that leads to unpredictable and random deviations in judgment. These deviations occur due to the idiosyncrasies of individual evaluators or external factors influencing the decision-making process. Noise explains the variations in decisions rendered on a warm day compared to those made by the same judge on a cold day, or the discrepancy between sentencing a defendant to ten years in prison for heroin trafficking and the revision of that sentence by another evaluator. Arbitral awards, like the decisions of any other professional evaluator, are susceptible to noise. Reducing noise in arbitral awards requires a thorough assessment of the decision-making process, which involves evaluating the reasoning underpinning arbitral decisions. The more robust the reasoning, the lower the noise. Implementing strategies to enhance both the formal and substantive aspects of arbitral awards mitigates potential judgment deviations caused by noise, ultimately contributing to the issuance of fairer decisions.
Iurgium [previously Spain Arbitration Review]