Dear Parties: Thank you for selecting me (or considering me) to serve as your arbitrator. When authorized by the agreed arbitration rules or with the parties’ consent, I prefer to manage arbitration proceedings along generally the following lines; I am always open, of course, 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.
If the parties have submitted detailed pleadings, then before the initial scheduling conference call, I will often consolidate the parties’ pleaded assertions, along with my initial questions about the case, into a skeleton draft of a “Position Statement” — which the parties will presumably update as the case progresses — for use as a guide to disclosures, discovery, and the hearing proceeding. (This early organizing of the case will sometimes help facilitate settlement discussions.)
The idea of preparing a Position Statement 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).
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 Position Statement;
(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).
(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.
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 Position Statement and explore whether an early disposition can realistically be expected. (Note that this is in essence required by AAA Commercial Rule R-33.)
(a) If a Position Statement 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 — especially 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. 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).
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.