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Articles: Arbitration Advocacy Part Two

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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