Arbitrations are meant to be cost efficient, quick and more informal than courtroom litigation. However, many litigators seem to forget that. Arbitration pre-hearing conference orders often include phrases such as “the rules of evidence will be liberally applied in light of the nature of the arbitral process.” This means some hearsay testimony and/or leading questioning will be tolerated. That does not mean the rules of evidence should be abandoned, but it does set the tone. Arbitrations also may not follow the traditional court format of plaintiff puts on their case with their witnesses and then the defendant’s case is put on with their witnesses. In arbitrations, the witness testimony is flexible and the schedule is often based upon the availability of the witness. Many times, the testimony can be taken by phone or video conferencing. In the case of expert testimony, the expert report can constitute the direct exam of the expert, and then the expert is presented for cross exam at the time of the in-person hearings. Arbitrators may also allow testimony by affidavit. The actual process an arbitration takes can be crafted by the parties and their counsel in coordination with the arbitrator(s).
This liberalization of the process will always be balanced with the desire to conduct a fair and impartial process, and to render a good faith and binding decision. Surprisingly, that type of balancing is not hard to do for experienced arbitrators. It is harder for the advocates. What advocates need to understand is that this process is not supposed to be like a courtroom proceeding. The advocates should prepare their clients as to what the arbitral atmosphere will be like. The advocates need to plan their case presentation to be informal, clear, concise, well prepared, yet flexible. Often times, an advocate forgets his or her place and incorporates theatrics that might work well before a jury. The opposite occurs in arbitration. Advocates in a jury or even in a bench trial, tend to introduce cumulative testimony going over the same facts or legal principles multiple times. In a courtroom setting, that may be necessary, but not in an arbitration.
In the traditional courtroom setting, advocates want to learn everything possible about the opposition’s case, evidence, and documents. So the discovery process is heavily relied upon. Numerous depositions are taken. Interrogatories and document production requests are sent out ad nauseum. Generally speaking, most of these actions add little or nothing material to the case. In arbitration, discovery is limited. Often times no interrogatories are allowed, depositions are limited in number, time, and/or scope. If advocates know this going into arbitration they can tailor the process to efficiently get the information needed, but without overusing it. Discovery costs are generally the most expensive part of any case. Use the limitations of the process to set early disclosures between the parties similar to those under the federal rules of civil procedure. If this is done right, not much else will be required. While current statutory and American Arbitration Association rules permit discovery, it also gives the arbitrator the ability to limit it or not allow it at all.
In many cases, dispositive motions are filed by either or both sides almost as a matter of course. Again the AAA rules and the Michigan Uniform Arbitration Act permit the consideration of dispositive motions. However, most arbitrators require the moving party to submit a short letter detailing the nature of the motion, whether or not it will increase the efficiency and cost-effectiveness of the proceeding, and to discuss the likelihood of success on the merits. The arbitrator will then determine whether or not to even allow the filing of the motion. This is basically because most dispositive motions are denied. This process allows the arbitrator to screen these motions before it gets to the point of delaying the process and adding additional cost layers to the parties. Generally, motions dealing with a statute of limitation or statute of fraud defenses will be considered. Dispositive motions that have a factual basis will, generally, not be granted. Therefore, advocates should focus on preparing their case in chief as if they will be going to hearing and not waste time, effort and cost on a motion that will not be granted. If you think you have a legal basis for such a motion, craft the letter carefully and make sure you describe why this will help the integrity of the process.
One of the most common grounds raised when challenging an arbitral award is that the arbitrator failed to allow the presentation of relevant or potentially relevant evidence and therefore the process was not fair and a full hearing was not afforded them. To prevent this, arbitrators will deny dispositive motions and chose to decide the case after hearing all the evidence. They will usually allow most evidence to be submitted even though in a courtroom that same evidence may not be admissible. The results, however, may be the same as if the dispositive motion was granted or the objected to evidence not received, but the chances of a successful appeal are greatly diminished.
When presenting your case, keep the number of your witnesses down to the bare minimum. If multiple witnesses are presented and they present, generally, the same testimony or evidence, it may cause the arbitrator to stop listening. Thus, if the witness has something of impact to testify about, the important testimony may not be heard. The old adage “kiss” applies here, meaning “keep it simple stupid.” Because you select your arbitrators, they often will have topic-specific expertise, and therefore there will be even less need to be repetitive. The same is true with your exhibits. If you submit binders and binders of emails, memos, etc. the arbitrator will not read them nor refer to them. Just make sure you have the key documents in your exhibit books which are provided to the arbitrator(s) in advance or at the start of the hearings
If you are submitting pre-hearing or post-hearing briefs. Make sure you refer to the exhibits by number or the testimony by page and line if there is a transcript. You do not have to quote the entire exhibit or transcript you are referring to, just the point you are trying to make and what is supporting that point. The arbitrator will review that exhibit or testimony if your brief is clear and concise. The longer the brief the harder it will be for the arbitrator.
These are just a few of the suggestions when presenting in an arbitration proceeding. Keep in mind that arbitrations are supposed to be more efficient, quicker, and cheaper than court proceedings. Make sure your client understands the process. Prepare for the pre-hearing scheduling conference since that is when the shape of the process will be crafted. And finally, select your arbitrator(s) with care.
Martin C. Weisman is recognized as a Michigan “Super Lawyer” and Michigan “dBusiness Top Lawyer” and has served as a neutral, court or party appointed arbitrator and mediator, has written and lectured on numerous alternative dispute resolution and other topics. Mr. Weisman is the immediate Past Chair of the State Bar ADR Section, a member of PREMI, a member of the AAA Panels of Complex Commercial Neutral Arbitrators and Mediators, and the National Academy of Distinguished Neutrals.
This article originally appeared in the family of Detroit Legal News publications on January 5, 2017, and is being reprinted with permission from the publisher.
* Member Emeritus