PART ONE: PREPARING THE CASE
Congratulations! Your favorite paying client, Ikenbuild Construction,
has just dropped by your office to pay its bill. Your client also drops
off a complaint for you to review. The complaint alleges that your client,
Ikenbuild, installed a defective roof on the Happy Valley Elementary School
that collapsed and caused property damage to several classrooms. A jury
trial has been requested in the Happy Valley District Court. A review
of the local court verdicts reveals that Happy Valley School District
has never lost a jury trial in the Happy Valley District Court.
What are you going to do to save the day for your client who thinks you
are a savvy and crafty attorney because you passed the bar exam and got
him out of a speeding ticket? A voice sounds from within: “Use the
force Luke and read the contract.” The contract contains the following
language: All disputes arising under or relating to the performance
of this contract shall be determined by arbitration.
You have attended all the CLE programs dealing with ADR and know immediately
what to do. Get a retainer. What’s next? File the appropriate responsive
pleadings together with a Demand for Arbitration and a Motion to Stay
the litigation. You and the opposing counsel work out a stipulation, with
the court’s approval, providing for a stay in the legal proceedings
and agree to arbitrate the dispute. You and your fellow counsel stipulate
to the following terms that are contained in a formal Stipulation which
is approved by the court:
The parties hereby stipulate to stay these proceedings pending
the outcome of arbitration. The parties further agree to submit all
matters arising under or relating to this dispute to arbitration administered
by the American Arbitration Association under its Construction Industry
Arbitration Rules. Judgement on the award rendered by the arbitrator
may be entered by this court in accordance with the terms and provisions
of the Utah Arbitration Act.
You and your fellow counsel have set the stage for resolving the dispute
by providing for an established ADR provider to oversee the arbitration
and designating a widely accepted set of rules to govern the process.
As an option, you may specify the use of the AAA’s Construction
Industry Rules and eliminate the requirement of having an independent
ADR provider administer the arbitration. You and your fellow counsel may
be able to agree upon a particular arbitrator to hear the case. You may
agree to use the Utah or Federal Rules of Procedure, Evidence or any rules
of your own making. In addition, you have also retained the jurisdiction
of the court to handle post arbitration enforcement proceedings and deal
with other matters that may need attention should the arbitration process
break down. You are the consummate ADR professional.
Arbitration and Baseball
It is the objective of this article to provide attorneys with some insight
on preparing the case for arbitration and offering some suggestions on
how to work with the arbitrator on case management matters. Arbitration,
like baseball, has four bases to touch in order to bring the client safe
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 a trial judge, but
does have 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.
Be reasonable in fashioning your case management plan as it pertains
to these items.
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, 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.
Arbitration is an “alternate” form of dispute resolution.
The rules of procedure and evidence are determined by the parties. Arbitration
also gives the parties an opportunity to give their input into who will
hear their case and the location of the hearing. The key to the integrity
of the arbitration process is the ability of counsel to cooperate with
one another in conjunction with the arbitrator in creating a system where
the parties are given a fair opportunity to present their case. Arbitrators
will expect and rely on counsel to be cooperative and pro-active in creating
the rules and procedure that will govern the arbitration.
Preliminary Scheduling Conference
After the matter has been submitted to arbitration and the arbitrator
has been appointed, you can expect the arbitrator to schedule a preliminary
scheduling conference, usually over the telephone, that will result in
the creation of a Preliminary Hearing Scheduling Order. The Preliminary
Hearing Scheduling Order is the equivalent of a combined Stipulated Discovery
Schedule and a Pre-Trial Order. It will include, among other items, (1)
the date, time and place of the arbitration; (2) cutoff dates for the
filing of additional claims, motions and discovery; (3) witness disclosures;
(4) the handling and exchange of exhibits; (5) the filing of briefs; (6)
the need for a reporter; and (7) the form of the award.
The Arbitrator will expect you, as legal counsel, to be prepared to address
each of the above listed items, together with other matters that affect
the management and presentation of your case. Generally, the arbitrator
will honor the procedures you and your fellow counsel agree upon, particularly
in matters that affect discovery. If you are not able to reach an agreement,
the arbitrator will “mediate” a solution. If counsel cannot
reach an agreement the arbitrator will impose a decision upon the parties.
The arbitrator has limited authority to enforce the terms of the Order
or impose immediate sanctions. However, counsel should keep in mind the
triple play power the arbitrator has at his or her disposal: (1) the arbitration
can be held in the absence of one or both of the parties and an award
will be rendered that has the legal effect of an enforceable judgement;
(2) the arbitrator is the sole judge of the relevance and materiality
of the evidence; and (3) the arbitrator’s award is final and subject
to limited review. Don’t detract from the merits of your case by
being unreasonable on case management matters. The attorney’s credibility
account with the arbitrator is a valued advocacy tool.
The arbitrator will encourage the attorneys to design and manage a fair
and efficient discovery plan. If you or your client feel the need to beat
the opposing party into senseless submission by conducting a campaign
of combat by discovery, arbitration may not be for you.
The Utah Uniform Arbitration Act and the Federal Arbitration Act give
the arbitrator the authority to order all forms of discovery requests.
Counsel may use the traditional discovery devices of depositions, written
interrogatories, requests for documents, requests for admissions and requests
for inspection and testing to prepare the case. However, all discovery
is ultimately subject to the arbitrator’s discretion to approve
or restrict. The arbitrator also has the power to issue subpoenas to produce
documents and third party witnesses.
The arbitrator is the final authority on all matters affecting the scope
of discovery. However, unless the parties empower the arbitrator with
sanction powers of the Utah and Federal Rules of Procedure, the arbitrator
is left with no direct means to enforce discovery rulings and the subpoenas
that are issued. You can expect that the arbitrator will work hard with
counsel to resolve discovery disputes. Your efforts in taking a reasonable
approach in crafting and implementing a discovery plan will develop credibility
with the arbitrator.
Arbitrators generally do not favor written discovery in the form of Interrogatories
and Requests for Admissions. They are less enthusiastic about permitting
too many depositions, but will allow a limited number where counsel have
agreed to conduct a certain number or can show a need.
You may be allowed to submit affidavits, but they are not favored. Absent
a stipulation from other counsel, affidavits will not receive much consideration
as to materiality or weight. Live testimony is preferred and most often
will be required for important testimony.
The arbitrator will work with you and other counsel to create a joint
set of exhibits that are indexed, tabbed and placed in three ring binders.
You will want to prepare enough sets of exhibits for each party, the witness
and the arbitrator. Take the time with other counsel to work out an efficient
system for handling the exhibits. The hearing will go faster and the arbitrator
will be able to better track the evidence you present.
Consider a couple of final thoughts in working with the arbitrator in
creating a discovery plan. Do you and opposing counsel want an inspection
of the physical premises? Will you need to address procedures and costs
for conducting any desired experiments and tests? What are the advantages
in using a video taped deposition in lieu of having the witness testify
at the arbitration hearing? What are the possibilities of taking testimony
via telephone or video conferencing? In addition, you and your fellow
counsel will also want to discuss the use of charts and other reliable
summaries in connection with the presentation of extensive documentary
evidence. Here is where you can be at your creative best in crafting an
acceptable and reliable discovery plan.
The arbitrator has authority to hear and rule on motions. The motions
may request injunctive relief, provisional remedies, dismissal or summary
judgment. You and the arbitrator will want to discuss motions the parties
anticipate filing, a motion cut-off date and a briefing schedule for each
Arbitrators have the authority to make either a partial award, an interim
award or an award involving injunctive or provisional relief. However,
you and your fellow counsel should keep in mind that arbitrators are reluctant
to grant dispositive motions, injunctive relief or provisional remedies
that change the status quo before an arbitration hearing.
Arbitrators will be inclined to want to hear live testimony and review
all relevant exhibits before rendering an award whether interim, partial
or final in scope.
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 by
arbitration, the parties must enter into a written agreement that specifies
the use of arbitration. The arbitration agreement should also provide
for a means to select the arbitrator, define the scope of the matter to
be arbitrated and designate a set of rules and procedures that will govern
The attorneys, working together with the arbitrator, have an opportunity
to determine the procedures that will be used in connection with the resolution
of the dispute between their clients. Take advantage of this opportunity
to create a process that is fair, efficient and reliable. The integrity
of the arbitration process is everyone’s responsibility.