14 Tips on Using Arbitration to Resolve Legal Disputes
Arbitration is a time-honored vehicle that can offer parties a speedy and economic resolution to their disputes. Here are 15 tips developed over 40 years of arbitration both as a litigator and arbitrator which can help expedite and streamline the process.
A good place to start:
What is Arbitration?
Arbitration is a form of alternative dispute resolution where a neutral third party, known as an arbitrator, makes a decision about a dispute. This decision is typically binding and final. It’s a private process, akin to a court proceeding, but less formal. It’s used as an alternative to litigation, which can be costly, time-consuming, and unpredictable.
When is Arbitration most frequently used?
Arbitration is often employed in commercial disputes, where the parties prefer a quicker, more cost-effective solution. Businesses, in particular, appreciate the confidentiality that arbitration provides, protecting their reputational interests. Moreover, arbitration allows for a specialist arbitrator, who has in-depth knowledge of the specific area of law or industry involved in the dispute. This expertise can lead to better-informed decisions.
To Arbitrate or not to Arbitrate?
That is the popular question…
First and foremost, you need to decide whether you want to use arbitration as your dispute resolution method. Some parties are reluctant to arbitrate, particularly public entities. If you elect to arbitrate, generally, the decision needs to be made at the time of contracting with a valid and enforceable arbitration clause in the contract that is the subject of the dispute. However, if you have no arbitration clause, the parties can still participate in arbitration if they negotiate a clause either before litigation, or even during litigation, provided both parties mutually agree. Whenever you have a complex case that involves specialized knowledge — factual or legal — arbitration is highly recommend because you can often select decision makers uniquely qualified by their deep experience with the substantive issues at hand. This is certainly no criticism of judges, who are generally well equipped to handle complex matters, but when you are dealing with highly complex factual and legal issues, it helps to have someone in the decision-making chair with experience in the area.
14 Best Practices for Arbitration
1. USE THE CORRECT LANGUAGE IN YOUR ARBITRATION AGREEMENT
In most states, there is specific language that must be included in an arbitration agreement to make it enforceable. For example, arbitration must be agreed upon, final, binding, and enforceable in a court of competent jurisdiction. Without that language, you may have difficulty enforcing the arbitration process and, more importantly, the arbitration award.
2. SELECT APPROPRIATE AND QUALIFIED ARBITRATORS
Most arbitration rules allow you to select panelists from a pool of qualified candidates. Usually, you are not bound by that list: the parties can also designate, by mutual agreement, someone who is not on any of the designated lists. Finding the right person is immeasurably important. You want someone who is qualified and has the requisite knowledge both from years of experience and a demonstrated career performance so she or he will handle, manage, and decide the case expeditiously and proficiently.
3. USE OF DISCOVERY
Make sure discovery options are included in your arbitration agreement. Discovery is not automatic under most arbitration rules. There is typically an exchange of documents but nothing quite like the rules of civil procedure. If you are anticipating an exchange and enforcement of documentation similar to the rules of civil procedure, you need to make sure that is spelled out in the arbitration agreement. Further, bear in mind that arbitrators generally do not like dealing with discovery disputes and view them as a nuisance. If you have a discovery dispute, it is much better to attempt to work it out before you get the arbitrators involved.
4. USE OF MOTIONS FOR SUMMARY DISPOSITION
Most rules of arbitration do not permit the type of motion practices typical in state or federal courts regarding summary disposition. While arbitrators generally are empowered to deal with claims in a summary fashion, there is no consistency of rules across the board. Accordingly, it is very difficult to succeed in getting a summary disposition order. Nevertheless, a summary disposition motion can be a good strategic move if you have a sound basis under the rules of civil procedure and need to educate the arbitration panel on a complex or difficult issue it will face. Motion practicegives you an opportunity to pre-argue the merits of your case — or at least portions of it. Just bear in mind that granting summary disposition in an arbitration proceeding is very difficult and, if you clearly have no basis in that there are multiple issues of fact, filing a motion could reduce your credibility.
5. BE PREPARED!
This cannot be emphasized enough. Walking into arbitration with an expandable folder stuffed with all the documents and meandering through direct and cross-examination in a matter that makes it look like you are taking a deposition will not endear you to the arbitrators.
6. DON’T REINVENT THE WHEEL
Understand that you have retained arbitrators who are knowledgeable in a certain area of the law or industry. It is not necessary to re-educate them in every detail regarding your case. And if an arbitrator indicates to you that they have the knowledge, move on with your direct examination. In essence, get to the point. Along the same lines, do not be repetitive. You do not need 12 witnesses to say the same thing. Take the ones that are most credible and utilize their testimony. Using multiple witnesses will hurt you more than it will help you. With multiple witnesses on the same topic, there is a greater opportunity for the testimony not to be properly aligned.
7. AVOID MULTIPLE INCONSISTENT ARGUMENTS
We are all taught in law school to make every argument, even in the alternative. However, when dealing with a sophisticated arbitrator familiar with the law and industry of the case, making multiple inconsistent arguments can reduce your overall credibility. Pick the best arguments and pursue them. Avoid the temptation to turn over every stone.
8. ABSOLUTELY NO BICKERING!
One of the worst things you can do in an arbitration is bicker or be petty with an adverse lawyer. Arbitrators do not want to hear it, they are not tied up with all the emotions, and it reduces your overall credibility. Avoid it like the plague. Demonstrate civility.
9. USE A CHESS CLOCK
Figure out how much time you have in the arbitration and divide it among the parties. Use a chess clock or keep time on a yellow pad and make sure the time is evenly allocated between the parties in accordance with the agreements set out at the beginning of the arbitration. This will ensure that the arbitration completes on time, which is otherwise rarely the case, and forces parties to carefully consider and refine their direct and cross examinations.
10. USE OF SUBPOENAS
Be careful how you use subpoenas and understand the law regarding the use of subpoenas in arbitration proceedings. An arbitratormay issue a subpoena, but it may not be worth the paper it is written on. Arbitrators in most jurisdictions do not have power to enforce subpoenas. Generally, subpoenas on parties are considerably more effective than subpoenas on non-parties. If an arbitrator issues a subpoena to a party and that party refuses to comply, the arbitrator has the power to deal with that in terms of analyzing the evidence presented or suppressed.
11. USE OF DEPOSITION TRANSCRIPTS
Deposition transcripts, which are merely handed to an arbitrator, are basically ineffective. You are asking the arbitrator to read a discovery deposition which involves a scope far greater than what you want to establish at the proceeding and relying on the arbitrator to pick up all the nuances you believe are important. You are better off taking the deposition transcript and highlighting specific references. In addition, when an arbitrator reads a deposition transcript, she or he needs to review side-by-side the documents that are discussed with the witness. This is a cumbersome process. Using depositions also deprives arbitrators of making credibility decisions or evaluating testimony, which likely will default to not credible. Depositions should only be used as a last resort or as a manner of simply authenticating other evidence. You cannot expect to win a case by putting a deposition in front of an arbitration panel.
12. USE OF AFFIDAVITS
Like depositions, affidavits are basically ineffective to establish important facts. Affidavits can be used to authenticate evidence but beyond that, their use is very limited. Remember, arbitrators are required to make credibility determinations. Affidavits do not give the arbitrator that opportunity.
13. EXPERTS
Many complex cases involve using experts. Experts are very expensive and prepare detailed reports. On many occasions, however, you hired arbitrators with a specialized area of knowledge who are probably as familiar or more familiar with many of the theories experts discuss. Therefore, make sure that if you elect to use experts, you specifically refine and define how you were going to use them, whether the reports could be utilized, how you were going to provide direct and cross examination, whether you will use a panel approach, how you will conduct rebuttal, what demonstratives you will use to illustrate testimony, and all the other considerations. Streamlining the use of experts in arbitration will definitely be to your benefit.
14. FINAL BRIEFING
At the close of most complex arbitrations, the panel will ask the parties to present post-hearing briefs along with findings of fact and conclusions of law. Many times in the final briefing, arbitrators will ask for comment on specific issues with page limitations. By allmeans, confine your brief to those issues. The arbitrators are signaling that they understand the rest of the case. Avoid the temptation to reinvent the pre-arbitration brief and cover all the ground in the case. The arbitrators want specific information; provide that information. If you need to go into detail, you can do so in the findings of fact and conclusions of law. However, when preparing findings of fact and conclusions of law, be certain to cite or quote specific evidence to the greatest possible extent. Otherwise, findings of fact turn into he said/she said scenarios.
CONCLUSION
Following these 14 tips makes you more likely to present a better case at arbitration and obtain a more meaningful result. You will certainly increase the credibility of you and your client with the arbitrators. The key is finding competent, qualified arbitrators; delivering to those arbitrators a case in a neat, concise, and understandable package; being professional while doing it; and giving the arbitrators a post-arbitration brief with findings of fact they can analyze in accordance with their own notes.
Questions about Using Arbitration?
With over 40 years of experience serving clients as both as a litigator and arbitrator, Steve Hilger has a proven record of achieving successful outcomes for mediation & arbitration clients.
If you find yourself in a legal situation where you’re considering arbitration, don’t hesitate to reach out to him for personalized counsel on your specific business needs.
Author: Stephen Hilger
Hilger Hammond, Of Counsel
