As disputes become more complex and time consuming, there is increasing pressure to make the dispute resolution process more efficient. The potential expense of resolving a dispute is often the most serious threat to resolving it. Cost concerns often provide greater power to the party holding the money, who cannot be forced to pay an injured party unless the injured party is willing to incur the cost of an expensive arbitration. In international arbitration, where disparity in the culture of resolving disputes and the variation in jurisdictional process makes use of ADR techniques paramount, the chess clock has become an efficient tool in promoting quick, predictable, and economical ADR.
June 22, 2011 Articles
Chess Clock Arbitration
By Raymond A. Garcia, Nicole Liguori Micklich, and Michael V. Pepe
Chess clocks have been used for over a century to keep track of time to ensure that neither chess player delays the game. The simple technology, which simultaneously stops one player's clock and starts the other player's clock, has been adopted for use in many gaming tournaments. Its simplicity makes it a useful tool for tracking time in the arbitration of complex cases where time management and efficiency are paramount. Pierre A. Karrer, "Chess Clock Arbitration, Questions and Answers about time management in International Arbitration," International and Domestic Commercial Arbitration on the Threshold of the 21st Century (2008. The chess clock method promotes a focused and, consequently, cost-effective dispute resolution procedure by limiting and equalizing the parties' time to present their case. Mark E. Appel, "Chess Clock, A Time Management Technique For Complex Cases," Dispute Resolution Journal (May–July 2006).
Use of a chess clock to moderate consumption of time in an arbitration has moved arbitration away from the tenor and pace of court litigation. The chess clock method has to be implemented by agreement. A simple provision spelling out the use of the clock and allocation of a specific amount of time—measured in days, hours, or minutes—to the parties can define the parameters of the proceeding. The definition of time can be modified to include argument, direct examination, cross-examination, and redirect examination by a party as well as the argument time arising from any evidentiary objections. The chess clock method provides a solution to issues regarding the party's opportunity to be heard by literally equalizing the opportunity. The result is that each party has a limited amount of time over the course of the hearings.
Typically in a two-party case, the time will be split evenly, but that is not always the case. Joaquim Anguas, "Informatica Legal, Taking Evidence in International Arbitration: Considerations," Joaquim Anguas: Informatica Legal, (last accessed June 20, 2011). The parties track their time on a chess clock and keep a running tally throughout the hearings. A party is charged time for presenting evidence, cross examination, or argument on any evidentiary matters that arise during the hearings. Time used by the arbitrators in asking questions is typically charged to both parties or not charged at all. Pre-hearing processes can be used to dispose of some issues without any charge against the allocated time for hearings. For the most part, the chess clock is implemented to limit hearing time, which is perceived to be the most expensive part of any arbitration. Albert A. Moncihino, "Stop Clock Hearing Procedure in Arbitration," Asian Dispute Review, July 2009. By keeping track of actual time rather than the days to put on a case in chief, the party who uses its time with extensive cross-examination will not gain an unfair advantage, as it will have reduced the time to put on its case in chief.
The chess clock promotes efficiency. It necessarily offers predictability for costs, hearing time, decision time, and ultimate resolution of a matter. David Hacking, How to Be an Effective Arbitrator, International Construction Law, Ed. Susan Meek, (last accessed Jun. 20, 2011). It also, given the impact on both parties' time, encourages parties to raise any evidentiary issues prior to the actual hearing or "off the clock." It forces parties to think about the issues they will present ahead of time, making for a much more efficient hearing. Parties are wise to pare down their testimony and avoid duplication among witnesses and exhibits. By promoting an efficient hearing, and limited time, the chess clock also has the potential for cost savings
The arbitrators play an important role in making the chess clock method effective. They should ensure that the parties behave efficiently, and should encourage them to do so. The parties should take into account that arbitrators may have questions and should be encouraged to ask questions rather than be made afraid of consuming time.
The chess clock does not eliminate the possibility for gamesmanship, and arbitrators should be mindful of this fact. For example, a party may chose to forego cross-examination to force the other party to put on its entire case. A party may seek to raise dispositive issues of law during the hearing that could have been raised without regard to the evidence. If evidentiary depositions are permitted, a party defending the deposition might attempt to reserve objections to questions until the hearing, forcing the party taking the deposition to have uncertainty as to admissibility and consume time during the offer of the deposition with objections that could have been raised at the deposition. Depending on the rules in place, arbitrators can deal with such issues by charging time to a perceived offending party, offering to read the deposition "off the clock," or charging the objecting party with the time necessary to consider the objections.
The arbitrator must have authority under the applicable rules to render decision on pre-hearing motions to strike, motions in limine, or other evidentiary objections. Otherwise, there may be grounds to vacate an award based on the arbitrator's failure to admit evidence. Parties must balance the need for efficiency with the need for a full and fair hearing. Discussion of the applicable rules and jurisdiction-specific laws regarding the arbitrators' authority to deny admission of evidence and resolve pre-hearing disputes is beyond the scope of this article, but lawyers should fully consider the interplay of such rules when asking the arbitrator to make such determinations.
For litigators facing the chess clock, the key to success is devising a plan early that focuses on the essential elements of the case, the issues in dispute, and the critical documents and witnesses. Plan the order of testimony and witnesses ahead of time to reduce duplication as much as possible. Anticipate evidentiary disputes and deal with them "off the clock." Daubert issues can be raised before the hearing and briefed as a way of vetting or challenging expert testimony. If allowed, you can also hold a pretrial to vet potential exhibits and objections before the hearing.
Time management is critical and should be controlled by the consideration of the essential elements of proof through a hard budget. In establishing a budget for the hearings, the following example may be helpful. In a 12-day chess clock case, with a defined seven-and-a-half hour day (i.e., 9:30 a.m. to 5:00 p.m.), one might deduct an hour and a half for breaks and lunch, leaving six hours of actual hearing time. Then, participants must plan that the panel may have questions or that other administrative matters might consume an hour a day, leaving only five hours for the parties. Over the course of the hearing, that is 60 hours total, and, when split equally, 30 hours each. Then some allocation must be made between presenting the case-in-chief and defending. One might consider splitting time 50/50 at first, with due regard for cross examination, so 15 hours for each part for each party. Then, one has to budget between witnesses. At this point, summaries of voluminous records become a critical tool and should be used where the rules of evidence allow.
The budgets should be tracked each day by each witness. If the panel does not consume the allocated common time, then the parties recover that to their budgets. Time should be reconciled each day. The common method is for both sides to keep time on their own chess clock and compare them at the end of the day. Experience has shown that the time has been quite strangely balanced. Timekeepers tend to favor their own side, but only by very small amounts of time—often less than five minutes over the course of the day. These five minutes can be split by the parties.
As more and more pressure is placed on lawyers to offer efficient ADR practice, practitioners dealing with complex cases should consider methods that foster efficiency. The chess clock is an effective tool in doing so, and practitioners should consider implementing this method when drafting the arbitration clauses, negotiating scheduling orders, or in pre-hearing management conferences. The chess clock can be a valuable tool in promoting economic and efficient dispute resolution.
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