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Articles: Arbitration Advocacy Part One

ARBITRATION ADVOCACY
PART ONE: PREPARING THE CASE

Introduction

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 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 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.

Discovery

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.

Motions

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 motion.
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.

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 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 proceedings.

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.

 

 


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