July 06, 2020 Articles

Tips from an Arbitrator: Getting Off to a Good Start

Arbitration requires strategic planning to manage the process—and the arbitrators.

By Patricia A. Nolan
An agreement to arbitrate can be empowering—but only if lawyers are willing to take advantage of the opportunities that arbitration affords.

An agreement to arbitrate can be empowering—but only if lawyers are willing to take advantage of the opportunities that arbitration affords.

Healthcare lawyers routinely represent hospitals, medical practices, and doctors when they face breaches of contracts and other business torts. Often, the governing contract will include an agreement that any dispute arising from the parties’ relationship must be arbitrated. Occasionally, parties will have negotiated a post-dispute arbitration agreement.

What now? An agreement to arbitrate can be empowering—but only if lawyers are willing to take advantage of the opportunities that arbitration affords. Doing so requires working with clients to formulate the business goals of the arbitration, not just the litigation goals. It also requires strategic planning to manage the process—and the arbitrators—in order to achieve a successful outcome while ensuring an efficient proceeding. 

Early Considerations: Arbitrator Pool

Predispute arbitration agreements usually specify an available arbitral body, if any, that will administer the dispute and the choice of law. This will determine the rules that will govern. But from the moment a party begins to consider filing its case, opportunities to take control of the process are available.

The American Arbitration Association (AAA), for example, utilizes a case submission form that states: “Please Describe Appropriate Qualifications for Arbitrator(s) to be appointed to hear this Dispute.” Rule 3.2(b) of the current American Health Law Association (AHLA) Dispute Resolution Service’s rules for commercial cases states that “[t]he Administrator will provide a list of candidates based on information provided by the Claimant in the Demand for Arbitration and any additional information a responding party may choose to provide.” The case submission form for JAMS, Inc. (JAMS) advises that once the case is filed, “a JAMS professional will contact all parties to commence and coordinate the arbitration process, including the appointment of an arbitrator and scheduling a hearing date.” Strategic use of these forms—or direct communication with the case manager—enhances the administrator’s ability to put together a list of potential arbitrators with specific expertise, a specified level of experience with a particular issue, and availability to accommodate preferred scheduling. 

Other items that can be addressed at this early stage include arbitrator candidates’ rates, whether expertise or availability might be important enough to justify the added expense of an out-of-town arbitrator, and the exclusion of any arbitrators with onerous cancellation policies if a last-minute settlement is likely. 

Another example of a critical early consideration surrounding arbitrator selection is whether a former judge would be a good choice for an arbitrator. How likely is it that this case will actually have a final hearing? If a final hearing is likely, would your client or the other side benefit more from an arbitrator who had been a trial court judge adept at ruling on hearing surprises? 

Keep in mind, however, that the more restrictive your definition of an ideal arbitrator, the fewer candidates there will be.

Narrowing the List to One

Once you have the list of potential arbitrators, really study their resumes and websites—with your clients. Pay particular attention to the types of cases that the arbitrators have handled as advocates as well as while serving as arbitrators. Reach out to colleagues about potential arbitrators and their temperament, and encourage your client to do so as well. Is one arbitrator likely to be a bit dictatorial during discovery and hearings, or will she be more receptive to counsel seeking flexibility on procedural matters? Which type of personality would be more useful given (1) the strengths and weaknesses of your case and (2) the personalities of counsel and the client representatives? Consider, again, how booked a particular arbitrator tends to be: this could impact the likelihood of a continuance being granted or the duration of any delay in the final hearing if a party seeks a continuance.

In rare instances, the list of potential arbitrators is problematic. If you have concerns based on obvious conflicts, lack of qualifications, or other legitimate issues, talk to the case manager. Arbitration organizations are businesses; they want satisfied customers.

Once the arbitrator has been confirmed, take time again to review that person’s experience and expertise. Don’t be the advocate who, at the first hearing, explains to a 30-year healthcare lawyer the role of a third-party administrator. (Yes, I have witnessed that.)

Initial Scheduling Conference: Covering the Bases

Extensive preparation for the initial scheduling conference is critically important as well because the conference is the point at which discovery procedures and key deadlines are established. 

Advance consultation between the lawyer and the client is essential to ensure that the client’s business goals are considered. These may or may not be evident or consonant with the client’s litigation goals, especially when the parties to the dispute are contemplating a continuing business relationship.

This also is the time for the lawyer and the client to set expectations—particularly when business-side personnel rather than a corporate law department are supervising the dispute. Set expectations and ensure that everyone understands the differences between judicial litigation and contractual arbitration. 

In addition, this is the time to discuss with the client the availability of key witnesses, including experts, to appear for discovery and the final hearing. Failure to involve a client before the scheduling conference may result in a key witness being unavailable for the final hearing, or the selection of hearing dates that conflict with the client’s deadline for closing its books or finalizing time-sensitive items such as an annual report or a securities filing.

Discovering Arbitration Discovery Rules

Consider what discovery is necessary for you to prove your case and for your adversary to prove its case. Does it make sense to push for strict limits on discovery? Rules of the arbitration service provide an opportunity to do exactly that.

For claims of at least $500,000, the AAA Commercial Arbitration Rules provide only for the exchange of documents. Commercial Arbitration Rules for Large, Complex Disputes r. 22 (2013). Absent an agreement of the parties to conduct additional discovery—interrogatories, depositions, admissions—parties need the arbitrator’s approval for it. Similarly, the AAA Healthcare Payor Provider Arbitration Rules and Mediation Procedures provide, in Rule 22, that “[t]he parties shall each be limited to one deposition unless otherwise agreed to by the parties or ordered by the Arbitrator for good cause shown.” Rule 22(a) of the AAA Commercial Arbitration Rules states: “The arbitrator shall manage any necessary exchange of information among the parties with a view to achieving an efficient and economical resolution of the dispute, while at the same time promoting equality of treatment and safeguarding each party’s opportunity to fairly present its claim and defenses.”

The AHLA rules state, in Rule 5.5, that

[t]o promote speed and efficiency, the arbitrator, in his or her discretion, should permit discovery that is relevant to the claims and defenses at issue and is necessary for the fair resolution of a claim. Expert discovery shall be specifically addressed and the disclosure of expert witnesses shall be sequenced in a fashion that will allow fair discovery to proceed. 

The JAMS rules provide for “voluntary and informal exchange” of all nonprivileged documents and other information, including electronically stored information relevant to the dispute “immediately after commencement” of the arbitration. JAMS Comprehensive Arbitration Rules and Procedures r. 17 (2014). JAMS rules also permit each party to take one deposition of an opposing party or of one individual under the control of the opposing party. Rule 17(b) states that the “necessity of additional depositions shall be determined by the Arbitrator based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing Parties and the witness.”

In practice, these rules can mean limits on the number of depositions, interrogatories, or hours of depositions per side and on the rules for discovery from experts. Unless an agreement can be negotiated with opposing counsel on expanding discovery, you may be left to plead your case to the arbitrator, who is charged with running a fair and efficient arbitration.

Communication with Opposing Counsel

When you are familiar with the rules and have outlined an effective arbitration strategy for your client, communicate with opposing counsel. Run through the scheduling order form, if any, that the case administrator sent. Try to work out agreements on how the case will proceed and the deadlines that make sense. Discuss whether dispositive motions are appropriate and, if so, under what briefing schedule. If you have (wisely) encouraged your client to listen in on the scheduling conference, let opposing counsel know that your client will be on the call.

Conclusion

In short, be proactive. And be strategic in all aspects of selecting an arbitrator and planning for the preliminary scheduling conference. Your clients, and your arbitrators, will thank you.

Patricia A. Nolan is a arbitrator and mediator based in Dallas, Texas. She is on the roster of American Arbitration Association neutrals for healthcare, complex commercial, and employment cases; she is also on the roster of the American Health Law Association’s Dispute Resolution Service. She is the current chair of the American Bar Association’s Committee on Women in Dispute Resolution.


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