ARBITRATION ADVOCACY
PART TWO: THE ARBITRATION HEARING
Introduction
The first installment of this article, “Preparing the Case,”
discussed the procedures for setting an arbitration proceeding into motion
and creating a fair and efficient case management plan. That article illustrated
how the attorneys worked with the court to stay the judicial proceedings
pending the outcome of the arbitration, while at the same time having
the court retain jurisdiction over the case. Second, the article discussed
how the attorneys and the arbitrator created a system of rules and procedures
to govern the arbitration process. This article will focus on the attorney’s
role at the arbitration and will offer some suggestions concerning the
presentation of the case. The procedures involved with the judicial enforcement
of arbitration awards will also be discussed.
Arbitration and Baseball Revisited
Always keep the following mind: Arbitration, like baseball, has four
bases to touch in order to bring the client safe at home.
First: Treat the arbitrator, all deadlines and the
arbitration proceedings with the care and respect you give to the court.
The arbitrator does not have the sanction powers of trial judge but
has the power of rendering an award that will be final and subject to
limited review.
Second: Arbitrators do not like to engage in extensive
discovery, motion practice or arguments over what evidence is admissable.
Third: The arbitrator will be more familiar with the
technical issues, customs and standards of the industry that are relevant
to the dispute. Arbitrators will, and often do, use their experience
to evaluate the evidence and create a remedy for the parties.
Fourth: Arbitration awards are final. While there
are provisions for overturning an arbitration award, the likelihood
of doing so is remote. Arbitrators are expected to be rational and apply
basic principals of law, but they have the power to fashion equitable
remedies that may not follow the common law or technical legal requirements.
If you enter the arbitration arena, expect to try your case once.
Establishing the Ground Rules
The length, time and place of the arbitration hearing should be discussed
by the attorneys as part of their preparation for the Preliminary Hearing
Scheduling Conference with the arbitrator. If the arbitration will last
more than one day, the arbitrator and the parties usually schedule the
hearing for consecutive days so the case can be presented at one time.
However, you and the arbitrator are free to create a schedule that will
accommodate the needs of the parties and the witnesses. Be prepared to
address what times you would like the hearing to commence and end on each
day. Most arbitrators will be flexible in working longer hours in order
to accommodate the schedule of the parties, their counsel and their respective
witnesses.
As for the setting and the level of formality, it is best to approach
the arbitration hearing with the same level of formality that you would
a bench trial. However, most arbitrators prefer an informal setting. Take
your cue from the arbitrator. Make arrangements for reporters and any
equipment needed to present the evidence. Consider the need for easels,
writing pads, projectors, screens, video equipment and computer systems.
Opening Statements
Opening statements are optional. If you have furnished pre-hearing briefs,
a stipulated set of facts, or both, your opening can be waived or expedited
by using a more summary form of presentation. Arbitrators are anxious
to hear the facts from the witnesses. An opening statement should be designed
to educate the arbitrator on the general framework of the case. A brief
statement on your client’s position on the issues and damages will
most often suffice. I encourage you to refrain from the temptation of
arguing your case in your opening statement. Attorneys who argue their
case in the opening statement phase of the arbitration are doing a disservice
to their client. An opening statement is like a well orchestrated performance
by the Utah Symphony. Keep the introductions to a minimum. Be the conductor
and let the musicians (witnesses and documents) do their thing.
Witness Testimony
You and your fellow counsel should discuss who should go first. The party
bringing the claim will lead off and continue its presentation of the
evidence until all of its witnesses have been examined. If necessary,
the witnesses may be called out of order, or the testimony of one witness
may be interrupted by that of another under the appropriate circumstances.
Experts and third party witnesses should be given preference. The arbitrator
will be able to track witness testimony that is interrupted or presented
out of order.
Unless counsel require otherwise, the arbitrator will use a “relaxed”
standard of the rules of procedure and rules of evidence. The American
Arbitration Association’s Construction Industry and Commercial Rules
give the parties the right to “offer such evidence as is relevant
and material to the dispute” and give the arbitrator the authority
to be the “judge of the relevance and materiality of the evidence
offered.” Arbitrators are liberal in allowing evidence to be presented.
The “relaxed” approach to the admission of evidence saves
time in arguing over motions but can add time because of the amount of
evidence permitted to be entered. If you want a more strict standard to
apply, consider addressing that matter up front with the arbitrator in
the preliminary conference.
Experts are as frequent in arbitration as they are in the courtroom -
perhaps more. Arbitrators prefer a written report from each expert that
is exchanged before the expert’s scheduled deposition or the arbitration
hearing. You and you fellow counsel will want to discuss with each other
and the arbitrator whether the expert’s report is to be offered
into evidence, if there is a need for direct examination beyond what is
contained in the expert’s report and whether the expert will be
at the hearing and subject to cross examination.
Exhibits
The arbitrator will be liberal in admitting documents and will expect
counsel to have agreed on foundation matters in advance. Have confidence
that the arbitrator has the intelligence and skill to assess the weight
and materiality of documentary evidence. Although the arbitrator may admit
a document, the burden is on you to establish its relevance, materiality
and the importance that document should be given. There is nothing like
a good witness to bring the contents of a document to life in the mind
of an arbitrator.
Arbitration is designed to provide the parties with an efficient method
of resolving their dispute. Arbitrators are trained to consider and implement
procedures that will encourage this result. Consider using stipulations,
summaries, and testimony by telephone. Written affidavits that are not
subject to cross examination are given little, if any, weight by arbitrators,
absent stipulation by all counsel. Anything counsel can do to streamline
the arbitration process is valued. However, take care that you don’t
create efficiencies at the price of reliability and fairness. Reliability
and fairness will be the touchstone by which the arbitrator is guided
in considering expedited methods of presenting proof and accepting evidence.
Closing Arguments and Briefs
As to final argument, the same principals apply that would be pertinent
to a bench trial. The arbitrator, who may be an attorney or other professional,
will have a wealth of practical experience with the technical and substantive
issues involved in the arbitration. Those experiences should be considered
in shaping your argument. Arbitrators are also liberal in allowing rebuttal
and sur-rebuttal. It is important to the arbitrator that the parties receive
a fair opportunity to present the information in support of their respective
positions.
At the close of the evidence the arbitrator will meet with counsel to
discuss closing arguments, post hearing briefs and the form of the award.
Closing arguments that re-hash the evidence may be interesting to the
parties but do not help the arbitrator. Ask the arbitrator what issues
should be addressed and whether those issues could be best addressed through
closing argument, in written briefs or both. This is the time where counsel
will want to listen carefully to the arbitrator’s questions. Arbitrators
prefer that post hearing briefs be submitted and exchanged simultaneously
with the need for responsive briefs to be determined at the discretion
of the arbitrator.
Here is one “Did You Know” point I would like to highlight.
It is one of those “unmentionables” we arbitrators hate to
bring up. The arbitrator has extensive powers to determine the dispute.
The arbitrator you and your fellow counsel select sits as a judge, jury
and appellate court with relaxed rules of evidence. That arbitrator is
expected to apply basic legal principals but is not strictly bound by
the common law of any particular forum unless you agree otherwise. However,
that arbitrator may be dismissed, by stipulation of the parties, any time
before the award is issued. You and your fellow counsel empower the arbitrator
with jurisdiction and certain powers and, by stipulation, have the final
say as to the extent those powers may be modified. All you have to do
is agree.
Award
At the conclusion of closing arguments the arbitrator will set a time
for the closing of the arbitration hearing. The closing of the hearing
is declared when all the evidence has been presented and the closing arguments
and briefs have been submitted. The due date of the award is fixed from
the time the hearing is closed. That date can be fixed by the rules you
have adopted to govern the arbitration or by stipulation. Prior to the
rendering of the award, the arbitrator has the discretion to re-open the
hearings and request additional evidence or legal authorities. The award
can take many forms: (1) summary decision which gives a bottom line holding;
(2) breakout award consisting of each issue raised by the parties with
a corresponding damage value or other remedy; (3) summary decision or
breakout award with comments from the arbitrator; or (4) formal findings
of fact and conclusions of law. Counsel and the arbitrator should agree
in advance as to the timing and form the award will take. Discuss the
form of the award as early in the arbitration process. The preliminary
conference is an excellent opportunity to work on this matter.
Arbitrators are not bound by the common law of the jurisdiction in which
the hearing is held. That being said, you and your fellow counsel can
agree to have the arbitration held in accordance with the law of a particular
forum and further require the arbitrator to issue an award in accordance
with the established law of that forum. The choice is yours.
It is critical that the award cover all the issues submitted by the parties.
An oral stipulation made by counsel at the arbitration is not sufficient
to empower an arbitrator with the authority to arbitrate a dispute. The
agreement must be in writing and signed by the parties. The arbitrator’s
jurisdiction arises from the written contract of the parties. If there
is any doubt about the scope of the matters to be arbitrated, the matter
should be handled by written stipulation signed by the parties and counsel.
The award is private, but not confidential, unless agreed upon by the
parties in advance. The ruling has no precedential value and only applies
to the particular case.
Judicial Enforcement of Awards
Once the award has been published the arbitrator is discharged. Post
hearing motions are rare. The arbitrator may correct clerical mistakes
in the award or mistakes involving the description of a party or item
which is the subject of the arbitration, but may not reconsider the merits
of any of the issues decided.
If the parties wish to modify, confirm or vacate the arbitrator’s
award they must apply to the appropriate court in accordance with the
requirements of the Utah Uniform Arbitration Act or the Federal Arbitration
Act. Arbitration awards have the same effect as a final judgment. Most
awards are confirmed as final judgments and are difficult to attack on
appeal.
The award can be modified or vacated where the appellant or petitioner
can establish (1) the parties did not agree in writing to arbitrate the
subject matter of any item addressed in the award; (2) arbitrator bias
or prejudice; (3) the arbitrator exceeded the scope of his or her authority;
(4) the arbitrator abused his or her discretion in refusing to admit material
evidence, postpone a hearing or otherwise was unfair in conducting the
arbitration; or (5) corruption or fraud.
Conclusion
Arbitration is an alternate form of dispute resolution. The arbitration
process was not intended to replace the traditional method of resolving
disputes through the courts. In order for a dispute to be resolved through
arbitration, the parties must choose that form of resolution, select an
arbitrator, define the scope of the matter to be arbitrated and agree
upon a set of rules and procedures that will govern the proceedings.
I would like to express one final thought on arbitration. Operate from
the assumption that arbitrators want to be fair. They are human beings.
They come in all sizes and shapes and carry their own set of prejudices
and biases along with their better attributes of expertise, demeanor and
insight. Assume the arbitrator wants to do the right thing. Help the arbitrator
help your client by being a teacher instead of a salesperson. Remember:
it is everyone’s job to maintain the quality and integrity of the
arbitration process.
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