Advice for Smooth Arbitration Process

Many litigators mistakenly assume that their “tried and true” courtroom tactics will be equally successful in an arbitration proceeding. However, trial techniques and strategies that yield results in a jury trial, may be off putting to an arbitrator.

Rather than assume that your approach to litigation will succeed in arbitration, following these practical rules will ensure a smoother arbitration experience for you and the arbitrator.

Before the Hearing

1. Be aware of the rules and procedures promulgated by the governing body

Be aware that there are differences in rules relating to jurisdiction, arbitrability, discovery, etc. depending on what tribunal your case is proceeding under. For example, do not assume that a consumer dispute will have the same rules as an employment dispute. Do not assume that AAA discovery rules are the same as FINRA discovery rules.

Keep in mind that these rules are frequently updated or changed. For example, just in June of 2021, JAMS made significant changes to their rules and procedures.

2. Limit how much discovery you propound and stick to one round of discovery objections

Carefully pare back your standard discovery. Tailor your discovery to the size and complexity of the case. If possible, refrain from sending out a second or third set of discovery. Wait until all discovery is received and, if the discovery is deficient, make multiple attempts, through every medium to resolve the dispute and document your efforts. Only file your motion to compel after all efforts to resolve have failed.

Keep in mind that the throwing the kitchen sink technique in discovery can be looked on with disfavor. See, e.g., Jeremy A. Rowles v. Curators of the University of Missouri, et al., (No. 29-2946 December 18, 2020).

Your motion to compel should address each deficiency in the same order as how the discovery was propounded and have the actual requests for information and requests for production of documents attached to the motion. Do not group your objections by categories.

3. Avoid motions to reconsider in the context of discovery except under narrowly defined circumstances

As a general rule, arbitrators have a duty to “insure that relevant documentary evidence of one party is fully and timely made available to the other side….a failure to discharge this simple duty would constitute a violation of FAA Setion10)(a)(3) where a party can show prejudice as a result.” Chevron Transp. Corp. v. Astro Vencedor Compania Naviera, S.A., 300 F. Supp. 179 181 (S.D.N.Y. 1969). “An alleged evidentiary decision alleged to be made in violation of the FAA must have “so affected [the party’s] rights…that it may be said he was deprived of a fair hearing.” La. Dep’t of Nat. Res. Ex rel. Coastal Prot. & Restoration Auth. V. Fed. Emergency Mgmt. Agency (Civil Action No.: 16-00586 – BAJEWD January 31, 2017).

Thus, if after an arbitrator has ruled on your discovery motion and you feel that the ruling does not work to ensure that relevant documentary evidence is being produced then, and only then would a Motion for Reconsideration be appropriate. If you raise a motion for reconsideration of a trivial matter, you are wasting you client’s money and the arbitrator’s time.

4. Be mindful of the types of sanctions permitted for failure to comply with discovery orders

The American Arbitration Association’s Commercial Arbitration Rules confer some discretion on the arbitrator to award sanctions. R-23 (d) states:

In the case of willful non-compliance with any order issued by the arbitrator, drawing adverse inferences, excluding evidence and other submissions, and/or making special allocation of costs or an interim award of costs arising from such costs; and

(e) issuing any other enforcement orders which the arbitrator is empowered to issue under applicable law.

FINRA rule 12511 provides greater latitude for the arbitrator. It provides:

(a) Failure to cooperate in the exchange of documents and information as required under the Code may result in sanctions. The panel may issue sanctions against any party in accordance with Rule 12212(a) for:

Failing to comply with the discovery provisions of the Code, unless the panel determines there is a substantial justification for the failure to comply; or

Frivolously objecting to the production of requested information.

(b) The panel may dismiss a claim, defense or proceeding with prejudice for intentional and material failure to comply with a discovery order of the panel if prior warnings or sanctions have proven ineffective.*

JAMS has a catch-all sanctions provision under Rule 29 which provides:

(a) The Arbitrator may order appropriate sanctions for the failure of a Party to comply with its obligations under any of these Rules or with an order of the Arbitrator. These sanctions may Include, but are not limited to, assessment of Arbitration fees and arbitrator compensation and expenses; assessment of any other costs occasioned by the actionable conduct, including reasonable attorneys’ fees; exclusion of certain evidence; drawing adverse inferences; or in extreme cases, determining an issue or issues submitted to Arbitration adversely to the Party that failed to comply.

Even an arbitration proceeding simply through the creation of arbitral rights under contract can confer the right to impose sanctions, including attorney’s fees and costs. See, for example, ReliaStar Life Insurance Company of New York v. EMC National Life Company, (Docket No. 07-0828cv, 2009 WL 941173 (2d Cir. April 9, 2009. )

5. Interlocutory review of an arbitrator’s discovery ruling is not available

See, generally Did the Arbitrator “Sneeze”? –Do Federal Courts have Jurisdiction over “Interlocutory” Awards in Class Action Arbitrations?, 34 Vermont. Law Review. 493 (2010). See also, Mary E. Marlowe and Leslie R. Marlowe, v. IDS Property Casualty, (2011AP2067 April 5, 2013)

6. Consult with opposing counsel on a schedule for the calling of witnesses before the hearing
starts

Strive to set up a schedule for the calling of witnesses before the hearing. If you wait until the hearing, then witnesses in the control of your opponent may not be available and, on some occasions, this can lead to adjournments for lack of an available witness.

7. Strive to accommodate scheduling concerns before the hearing starts.

8. Consult with opposing counsel on anticipated length of time needed

If more dates are needed, get some dates lined up before the hearing starts so there are dates to present to the arbitrator.

If you intuit that the allotted days for the hearing are inadequate, reach out to opposing counsel and get some back-up dates ahead of the hearing If you wait until the hearing, then you will not be able to provide firm dates to the arbitrator because you will have to circle back to your witnesses to check on their availability. So doing delays setting up additional dates and prevents the arbitrator from scheduling other matters.

9. Strive to be as specific as possible in your Statement of Claim

While a tribunal’s rules set forth the bare minimum for what should be included in a statement of claim, you are doing the arbitrator a disservice if you do not include enough information for the arbitrator to determine whether a potential conflict of interest exists.

Setting forth a statement of claim with specificity also helps the arbitrator make informed decisions in discovery disputes.

10. Comply with all deadlines set forth in the initial scheduling order

11. Promptly file your witness list and update as needed so that the arbitrator can ensure there are no conflicts of interest

12. Limit the size of your exhibit binders

Exhibit books should not weigh more than a pound or two. Practitioners forget that they often ask arbitrators to toggle back and forth through several exhibit books. This is challenging if the books are heavy and hard to lift.

13. If settlement is in the offing, try to wrap up loose ends as soon as possible

Delaying notifying the arbitration tribunal that a settlement has been achieved until the last minute is discourteous to the arbitrator. Many arbitrators attempt to discourage last-minute settlements by including a flat fee if the matter is settled within one week of the hearing.

During the Hearing

1. Avoid gamesmanship

It may not be technically obligatory, but coordinating the calling of witnesses with opposing counsel will result in a smoother hearing.

Be sure that the exhibit books you provide to the arbitrators are the same exact exhibit books you provide to opposing counsel.

If an arbitrator limits a brief or document to a certain length, do not use a font smaller than 12-point type or excessive footnotes to cram in additional argument. In fact, courteously ask the arbitrator if he has a preference as to font and size.

2. Behave courteously to opposing counsel.

Address objections to the arbitrator. Do not argue with opposing counsel.
Avoid insulting your opponent.
Avoid casting aspersions on your opponent.
Avoid baseless accusations of perfidy.

3. Leave the theatrics to the courtroom

Refrain from eye-rolling or snickering when opposing counsel is speaking
1. This is a frequent occurrence in Zoom arbitrations. Counsel who is not examining a witness may have the mute button on, but the arbitrators can still observe their demeanor. Frequent jeering and eye-rolling is being watched by the arbitrator and such conduct is not looked upon with favor.
Use a softer tone of voice than you would use in a courtroom. Stentorian orations are over-kill.
Do not point towards or interrupt the arbitrator. Ever.
Avoid overdramatic gestures such as throwing your arms up in frustration when your opponent is cross examining your witness.
Limit evidentiary objections
1. While it is commonly known that the rules of evidence are not applied in arbitration, this has not stopped many from interrupting testimony for evidentiary based objections.** Remember that your arbitrator is experienced and will automatically discount testimony that is based on hearsay, lacks foundation or is otherwise impeachable or suspect. Repeated evidentiary objections can be unwelcome.
2. Avoid surprise evidence
3. Make eye contact with all three arbitrators, not just the chairperson
  1. When you only make eye contact with the chairperson you are sending a message to the other arbitrators that you discount their role in the arbitration process. The chairperson only has one vote, even if he or she is conducting the arbitration.
Resist the urge to coach your witnesses
Arbitrators can very quickly tell when a witness has been coached. The coached witness is less effective and his testimony will be discounted.

Conclusion

The way to achieve the best outcome in arbitration is to follow the rules, be courteous to your opponent, avoid gamesmanship and theatricality and embrace the overarching philosophy of arbitration, justice pursued with speed and economy.

Leah has over 30 years of experience in arbitration and mediation. Leah has been involved with the American Arbitration Association since 2000 and the National Arbitration Forum since 2009.

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