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Arbitration Procedures

Dear Parties:  Thank you for selecting me (or considering me) to serve as your arbitra­tor. When consistent with the agreed arbitration rules or with the par­ties’ con­sent, I prefer to manage arbitration proceedings along generally the fol­low­ing lines.  I am always open to the parties’ suggestions about ways to stream­line the case and reduce costs while giving each side a full and fair op­por­tu­nity to present its case.

1. ARBITRATOR’S EARLY DRAFT OF A “PARTY POSITIONS” STATEMENT

Parties to arbitration cases often submit detailed written pleadings. In such cases, I’ve found it useful, before the initial sched­ul­ing conference call, for me to:

i) consolidate the parties’ as­ser­tions, along with my initial ques­tions, into a skeleton draft of a statement of the parties’ positions (the “Party Posi­tions”); and

ii) send that draft to the parties’ counsel for their review and comment.

This early organizing effort has proved to be well worth the minimal additional cost. The idea of doing so is informed in part by the following:

• AAA Commercial Rule R-32(b) provides that: “The arbitrator, exercising his or her discretion, shall conduct the proceedings with a view to expediting the resolution of the dispute and may … direct the parties to focus their pres­en­ta­tions on issues the decision of which could dispose of all or part of the case” (emphasis added).

• Canon IV of the AAA’s arbitrator code of ethics states: “An arbitrator should con­duct the proceedings fairly and diligently. … E. When the arbitrator de­ter­mines that more information than has been presented by the parties is required to decide the case, it is not improper for the arbitrator to ask ques­tions, call wit­nesses, and request documents or other evidence, including expert test­i­mony.” Am­erican Arbitration Association, The Code of Ethics for Arbitra­tors in Com­mer­cial Disputes, at 6 (2004), available at https://goo.gl/kbAmoX (ADR.org) (emphasis added).

• The AAA code of ethics also contemplates that arbitrators will “engage in dis­course with the parties or their counsel, draw out arguments or con­ten­tions [and] comment on the law or evidence …. These activities are int­eg­ral parts of an arbitration.” Id., commentary to Canon I (emphasis added).

• By analogy, the federal courts’ Manual for Complex Litigation (“MCL”) rec­ommends that at the initial pretrial conference in complex cases:

The attorneys should confer and submit a tentative statement of dis­pu­ted issues in advance, agreed on to the extent possible (see sec­tion 11.11). The conference is an opportunity for the judge to learn about the mat­er­i­al facts and legal issues and for counsel to learn about the op­po­nent’s case and gain a better perspective on their own.

[The judge’s questions at the initial pretrial conference] should probe into the parties’ claims and de­fen­ses and seek specific in­for­ma­tion. … [T]he judge should require the attorneys to describe the mat­erial facts they intend to prove and how they intend to prove them. 

… The defense should identify the specific allegations and claims it disputes, the specific defenses it will raise, and the proof it will offer. This process helps identify the genuine disputes and may facilitate admissions and stip­u­la­tions between the parties.

Federal Judicial Center, Manual for Complex Litigation § 11.33 at 44 (4th ed. 2004) (italics in original, boldfaced emphasis added, paragraphing edited).

The MCL also suggests that judges consider “directing counsel to submit a ten­t­a­tive statement, joint if possible, identifying disputed issues as spe­ci­fic­al­ly as possible,” id. at 33 (emphasis added), and “requiring, with respect to one or more issues, that the parties present a detailed statement of their con­ten­tions, with supporting facts and evidence ….” Id. at 46 (emphasis added).

2. DISCLOSURES

As soon as practicable after the (brief) initial sched­ul­ing-conference call, the par­ties should ex­change the fol­low­ing, to the extent known to them at the time:

i) specific, detailed, written contentions concerning “what hap­pened” and what I should do about it (and why), to the extent not already stated in the pleadings.  Ideally, those contentions will be consolidated into a joint revision of the ­Party Positions;

ii) all exhibits that the parties might use at the hearing, to the best of their present knowledge; and

iii) preliminary “will say” statements, i.e., initial outlines of writ­ten witness statements to be used at the hearing as set forth in part 6(b) below.

All of these initial disclosures should be sea­s­on­­a­bly revised and/or sup­ple­ment­ed as the case progresses.

After these initial disclosures, the parties and I would have a second conference call to firm up the overall schedule and to look for op­por­tu­nities for stipulation and/or summary disposition.

In aid of this effort, I likely would question the parties about their specific fact­u­al contentions and how they intend to prove them, as recommended in sec­tion 11.33 of the Manual for Com­plex Litigation, published by the U.S. Federal Ju­di­cial Center (cites).

3. DISCOVERY

(a) At the first scheduling call, I typically out­line some less-expensive alterna­tive discovery methods that the parties could consider.

(b) As a general rule, the costly, “let’s allow counsel to look under every rock” ap­­proach to discovery should not be used in arb­i­tra­tion unless expressly auth­or­ized by the agreed arb­i­tra­tion rules or expressly agreed to by the parties.

(c) If targeted discovery requests are permitted, they should pref­er­a­bly be turned around quickly, e.g., in five to ten business days if possible.

(d) Any third-party discovery subpoena that a party wishes me to sign is to in­clude a prominent citation of my legal authority to do so, mainly to help edu­cate the third party and its counsel. For a survey of relevant case law, see gen­er­ally Liz Kramer, Docu­ment subpoenas to third parties (Arb­i­tra­tionNation.com 2012).

4. MOTION PRACTICE

Where practicable, I strongly prefer to address interim disputes informally, e.g., by email and/or conference call, so that we can determine whe­ther an ex­pen­sive formal motion will be needed. I make myself available for such conf­er­ence calls on rea­son­ably-short notice.

5. DISPOSITIVE MOTIONS

In traditional dispositive-motion practice, counsel will normally spend con­sid­er­able time and money in writing an opening brief, a response, a reply, etc. Before that expense is incurred, I prefer holding an informal telephone con­fer­ence call where counsel and I can review the updated ­Party Positions and ex­plore whether an early disposition can realistically be expected.  (Note that this is in essence required by AAA Commercial Rule R-33.)

6. HEARING

(a) If a statement of ­Party Positions has not been prepared and updated, then in all but the simplest cases, it likely would be preferable for coun­­­­sel, before the hearing, to bring me up to speed about the basic chronology and disputed issues of the case. Among other benefits, such an approach:

i) helps me, at the hearing, to rule more quickly on evid­entiary objec­tions, with a better sense for how the proffered evidence fits into the context of the case; and

ii) might allow counsel to shorten their opening statements.

(b) Direct testimony should preferably be presented mainly by writ­ten witness statement — orally adopted and briefly summarized by the witness, followed by oral cross-examination.  This is a common prac­tice in international arb­i­tra­tion and in many U.S. federal-court bench trials (cites); it can save con­sid­er­able time overall as well reducing the cost of a court reporter.

(c) To the extent practicable, testimony of multiple witnesses on a com­­mon sub­ject should preferably be conducted in a witness-panel form­at. This is esp­eci­ally true in the case of expert witnesses, which is some­times referred to as “hot-tubbing” the experts (cites).

(d) Where possible, exhibits and written witness statements should be sub­mit­ted in the form of a joint appendix or joint “bundle” for easy reference. (Exhibits used solely for impeachment might require dif­fer­ent treatment, of course.)

Within the appendix or bundle, it’s often useful for exhibits to be ar­ranged in chronological order so that they help to “tell the story.”

Except for exhibits used solely for impeach­ment, to save hearing time:

  • exhibits should normally be pre-marked; and
  • exhibits not objected to in advance should normally be admitted; see also subparagraph (f) below.

(f) As to evidentiary objections:  Absent a controlling rule or agree­ment other­wise, the most cost-effective approach to eviden­tiary issues will often be for me:

i) to be relative­ly liberal in admitting arguably-relevant, noncum­u­lative evidence, but then

ii) later, to carefully assess how much weight to give to any par­ticular item of evidence based on its ap­par­ent probative value and reliability.

(g) Early in the case, the parties and I should discuss whe­ther it might be appropriate (with the parties’ consent) for me to en­gage a neutral expert, in ad­di­tion to — or if so agreed, in lieu of — party-appointed experts.

(h) Third-party subpoenas for the hearing should clearly state the authority by which the subpoena is issued, again to help educate the person(s) being served and their counsel.

For U.S. cases in which the Federal Arbitra­tion Act applies, consider whether the subpoena should be de­nom­i­na­ted as a “witness sum­mons.”  See generally A Model Federal Arb­i­tra­tion Summons to Test­i­fy and Present Documentary Evidence at an Arb­itration Hearing, by the International Commercial Disputes Com­mit­tee and the Arbitration Committee of the New York City Bar As­so­ci­ation (NYCBar.org 2015).

7. POST-HEARING

At the close of the evidence, before adjourning the hearing, I typic­al­ly offer to do the following, subject to each party’s agreement:

i) summarize, then and there, my tent­a­tive im­pres­sions of the evidence and how the law applies to it, so as to help the parties prepare their post-hearing briefs; and

ii) later, circulate a draft award (possibly in outline form) and give the par­ties a reasonable period of time to review and com­ment on the draft, before issuing the final award.

 

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