October 09, 2020 Dispute Resolution Magazine

Hot-tubbing Makes a Splash in Arbitration Proceedings

The water’s warm. Come on in?

Richard P. Flake
Hot-tubbing Makes a Splash in Arbitration Proceedings

Hot-tubbing Makes a Splash in Arbitration Proceedings

The water’s warm. Come on in?

It’s called hot-tubbing – or sometimes concurrent expert evidence. It has not yet gained a foothold in US courts, but it’s being increasingly employed in arbitration cases, especially those involving large construction disputes.

Hot-tubbing, a procedure in which competing experts provide evidence concurrently in a conversational format, originated in Australia’s court system and has now gravitated to parts of the United Kingdom. Although it has not gotten significant traction in domestic US courts, it has been used in arbitration and has found at least one fan in the federal judiciary. US District Judge Jack Zouhary used the process (although he was unaware of its name) in a complex antitrust class-action case in Ohio and was pleased with the result. “The procedure requires the dueling experts to focus on the same point at the same time,’’ he noted. “And the “point/counterpoint” dialogue – as opposed to the traditional appellate type monologue – is a better way of evaluating the accuracy of an expert’s opinion.” To further paraphrase Judge Zouhary, throwing everybody in the hot tub at the same time allows the triers of fact(s), counsel, and experts to confront (or splash) each other directly, boosting their chances of reaching a correct conclusion.

Statement of the problem

The appearance of a new product or new procedure is usually prompted by flaws in existing products or procedures, and this is no exception to that rule. For decades, if not centuries, attorneys for plaintiffs and defendants have called their own expert witness or witnesses, which has almost always resulted in complex presentations, voluminous documentation, days of court time, and competing claims that leave many (often including jurors and judges) frustrated or confused – or both.

It is the rare construction case, regardless of size, that does not involve expert testimony. Indeed, most cases rely heavily on experts, compounded by the reality that many, if not most, cases involve multiple claims and issues. Hence, in the context of expert testimony in construction arbitrations, the concept of hot-tubbing is gaining momentum. It’s too soon to label this a trend, especially given the confidential nature of arbitration proceedings, a corresponding paucity of meaningful data, and the fact that the age-old procedures used in the hallowed process known as the “trial” in American jurisprudence do not readily lend themselves to use of new-fangled techniques, but the idea is here. Practitioners of domestic construction arbitration in the United States are seeing (and in many instances demanding or at least suggesting) the use of some form of hot-tubbing of expert witnesses. As Sena Gbedemah and Toshi Dezaki address in their article in this issue of Dispute Resolution Magazine, this trend is more established in international practice.

A closer look

In keeping with the general flexibility of arbitral proceedings, there does not appear to be a “one-size-fits-all” hot-tubbing process in domestic arbitration matters. One configuration, for example, requires the experts to meet and confer well ahead of the merits hearing to identify and memorialize points of agreement and disagreement, thereby narrowing the need for competing testimony at the hearing. This method is used extensively in the United Kingdom and internationally.

This approach presupposes the likelihood of achieving consensus, but it will come as no surprise to those familiar with domestic expert witness practice that many times they do not agree on any disputed matter. As a result, some users elect not to have the experts confer before the merits hearing but to exchange expert reports in advance, aiming to get all the cards on the table for everyone, including the opposing side and the members of the arbitration panel, to see.

Whether or not the experts are required to do a “meet and confer,” one common (some would say hallmark) characteristic of the process is that the experts testify simultaneously on the issues. Such a process can include multiple experts on either side, each potentially addressing a discrete issue requiring discrete expertise. This method highlights the main purpose behind hot-tubbing. The testimony is often elicited in conversational fashion, as opposed to the more stilted and controlled direct and cross examination techniques. Depending upon the procedural agreement in place, competing experts might literally have a discussion about the issue at hand in front of the arbitration panel.

Why is hot-tubbing helpful?

Hot-tubbing is gaining momentum for several reasons. As anyone familiar with dueling expert witnesses in a complicated case knows:

  • The standard Q&A approach has frequently revealed itself to be not the best way to articulate, deliver, and coalesce essential information;
  • The rise of the “professional testifying expert” with total allegiance to a client has in many cases tainted the effectiveness of the process, frequently rendering testimony less persuasive; and
  • Following a procedure simply because “it has always been done this way” has in some cases hindered the ability of highly intelligent and effective trial lawyers and arbitrators to grasp critical and nuanced issues that constitute the needed areas of testimony – i.e., the right questions are not posed to the expert.

The purpose of expert testimony (any testimony, really) is to effectively impart critical information in the most persuasive manner possible to the trier of fact. A deep dive into the subject is beyond the scope of this article, but consider one question: outside the courtroom, where else in life is information gathered in a pure question-and-answer format? Don’t people in every setting communicate better by simply “talking it out?” Are not people (e.g., witnesses) more comfortable and effective with a conversational, reasoned discussion?

Use of hot-tubbing does not mean elimination of counsel from the process of presenting expert testimony to an arbitration tribunal. Indeed, in most hot-tubbing methodologies, the lawyers are allowed to ask questions at the end of the discussion, either of their own expert or the opposition’s, to clarify or emphasize an issue (or perhaps raise an issue that has not been covered in the hot-tub discussion). This “back-end coverage” allows lawyer participation and helps ensure that the experts discuss all the relevant issues, with a nod to due process. The lawyers are not banned from the process; they just assume a different role. Remember also that in nearly all construction arbitrations, as well as other arbitrations involving sophisticated legal or factual questions (and unlike in a jury trial), the arbitrator has some level of construction industry knowledge from which to absorb the experts’ reports, which diminishes the need for extensive direct or cross-examination. Hot-tubbing focuses on the main thrust of the expert opinions. It also allows the arbitrator(s) to join in the discussion to address issues on which the arbitrator(s) might need more information – something every advocate usually wants.

Time and efficiency

In addition to fostering a better communication, hot-tubbing usually shortens the length of an arbitration hearing and enhances efficiency, at least from the arbitrator’s standpoint. In the author’s own experience, hot-tubbing reduced a complicated six-week hearing to three weeks. While not every case will experience such dramatic time savings, by teeing up the discussion to focus on the areas of most interest and dispute, hot-tubbing will almost always save time in any construction arbitration. And because in nearly all cases experienced arbitrator(s) will have advance publication of expert reports, lawyers and arbitrators don’t have to waste time on preparatory and routine questioning. Further, because it allows construction arbitrators to engage the experts in real time to promote a better understanding of an issue or opinion, hut-tubbing can eliminate the need for such discussions after expert witnesses conclude their testimony, as often happens in traditional cases.

Many construction disputes involve separate and discrete project issues, and discussion of these issues, usually separated by many days, if not weeks, works against the effective coalescing of opposing arguments. Experience shows that spreading significant issues out over days or weeks is an invitation to generating a compromise award or one that misses a key element of an issue. (Because of this time challenge, many arbitrators now suggest adopting issue-by-issue evidentiary presentations, which allows the arbitrator or panel of arbitrators to discuss and deliberate those discrete issues during the pendency of the case. Many an issue has been decided, at least initially, over arbitrator meals.) Hot-tubbing lends itself nicely to issue-by-issue presentation in arbitration. Opposing experts discuss their opinions on the discrete issues presented, basically wrapping up the issue in a bow for the arbitrator(s) to decide or at least begin initial deliberations.

Can hot-tubbing be forced on participants?

Most of the major domestic arbitration service providers have codified procedures for hearings held under their auspices. Importantly, they all have rules affording arbitrators considerable discretion on how best to receive testimony. This is not surprising, given that an articulated hallmark of arbitration is emphasizing efficiency, flexibility, and due process. Even so, whether or not an arbitrator has the authority to demand expert hot-tubbing, most arbitrators would prefer achieving a consensus about the process than unilaterally imposing it.

Because most black-letter arbitration law regarding grounds for vacatur requires an arbitrator(s) to hear all evidence, obtaining agreement from all sides as to the use of hot-tubbing and the memorialization of the specific procedures and ground rules would likely constitute a best practice. Since use of the procedure affects both advocate and expert, determining and memorializing the propriety of its use should be established well in advance of the final hearing – indeed, even before the experts are retained. The chart on the following page details items that might weigh for or against using hot-tubbing for the expert testimony. (See the PDF version of this article for the chart).

Unlike its use in international practice, where rules and procedures are often codified, the hot-tubbing process as it is being used in the United States has grown organically and as a result takes on different shapes, on a case-by-case basis. Although the process does not appear close to being adopted as a rule of procedure in US trial courts, domestic arbitrators and counsel who have seen the benefits of the process will no doubt continue its use. The promise of the hot-tubbing process is to show disputed issues in the best and clearest light, for the triers of fact to decide. All constituents to the dispute process should want that to occur.

The author thanks Lionel M. Schooler of Houston for his helpful comments and suggestions on this article.

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    Richard P. Flake

    Richard P. Flake has a solo practice in Houston, Texas, and is a mediator and arbitrator of construction and commercial disputes. He is a past Chair of the State Bar of Texas Construction Law Section, is Board Certified in construction law by the Texas Board of Legal Specialization, and is a Fellow in the American College of Construction Lawyers. He can be reached at www.flakeADR.com. rflake@flakeadr.com