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March 06, 2013 Practice Points

Effective Advocacy and Efficiency in Commercial Arbitration

By Ruth V. Glick

Too often, advocates approach arbitration with the same practice techniques they use in courtroom litigation—an exercise that often results in high cost and inefficiency. They overlook the nuances and differences the arbitration forum provides and, in so doing, they miss the opportunity to present their case in a more advantageous and cost-efficient manner. To effectively and expeditiously achieve their clients’ goals, advocates should recognize and exploit the differences between litigation and arbitration.

First, advocates should recognize that in the business-to-business arena, arbitration is a dispute resolution process resulting from a negotiated agreement. In making that agreement, the parties were willing to trade off some procedural protections available in court such as full discovery, strict adherence to evidentiary exclusions, and opportunity for appeal in return for a faster, binding, and more efficient result.

<p>Arbitration allows the parties to tailor the process to the dispute in a setting that promotes flexibility and is less formal than court. They are able to choose arbitrators for their experience, knowledge, and case management ability. A complex dispute is not left in the hands of a jury, but rather is determined by decision makers with subject matter expertise. Parties can agree to the time, place, and length of the process as well as obtain expedited consideration of their dispute in a private forum. The process encourages the early identification and specification of issues. If counsel stipulate to certain facts and issues at the outset, the process can proceed on a more expedient basis. Because most arbitration is final and binding, there is also closure to the dispute once all sides have had a full and fair hearing and an award is rendered.</p>
<p>Attorneys should capitalize on some of the unique qualities and flexibility that arbitration offers. Here are some thoughts for effective advocacy in arbitration.         </p>
<blockquote><strong>Preliminary Hearing. </strong>Usually, the first contact the advocate has with the arbitrator is at a preliminary hearing, either by telephone or an in-person meeting. Based on this initial interaction, the arbitrator usually forms a first impression of both the case and the attorneys. Thus, this hearing is your opportunity to get off to a good start by setting the tone and style of your presentation, communicating the theory of your case, amplifying the claims or responses, and demonstrating your willingness to cooperate with opposing counsel. Pleadings are not required in arbitration. If the value of the case justifies it, however, a prehearing brief before the conference may be beneficial in educating the arbitrator regarding the parties, facts, and issues. But be sure to do so in a clear fashion. Detailed and tedious pleadings used in court are not the best way to present your case in arbitration. What are your legal theories and why should your client prevail? Do your homework, thoroughly organize and analyze the facts and legal theories, and effectively communicate them to the arbitrator at the prehearing opportunity, whether in writing or orally.</blockquote>
<blockquote><strong>Discovery. </strong>In addition to setting the date, time, and location of the arbitration, one of the primary functions of the prehearing conference is for the arbitrator to establish the scope of, and to set a schedule for, discovery. If counsel chooses to engage in overly adversarial behavior, the effort to make a good first impression can be doomed. The arbitrator is in charge of structuring the discovery process, but cooperation between advocates goes a long way in promoting the efficiency of the process and the goodwill of the arbitrator. My practice is to allow the attorneys as much leeway as they want in cooperating with each other for scheduling exchange of documents and witness lists, with my oversight, and as long as they stay within certain time restraints. I state in my hearing order that counsel shall continue to cooperate in the exchange of documents and information and shall confer to seek resolution of any discovery dispute. If they cannot agree, they are to notify me promptly so a conference call can be scheduled to address the problem. Usually, advocates try to impress the arbitrator with their willingness to cooperate and those calls occur only when real irreconcilable differences exist.</blockquote>
<blockquote><strong>Motions. </strong>Another function of the prehearing conference is to identify and schedule motions. Be selective in your motion practice. Certain motions related to jurisdiction, arbitrability, and provisional relief should be recognized and scheduled early. Certain dispositive motions such as valid statute of limitation defenses also fall into this category. Arbitrators, however, rarely grant other less productive dispositive motions because they wish to avoid the risk of having the award vacated for refusal to hear evidence. The Federal Arbitration Act, Section 10, provides for vacatur of an award when the arbitrators were &ldquo;guilty of misconduct . . . in refusing to hear evidence pertinent and material to the controversy. . . .&rdquo; Arbitrators want to have an enforceable award, so don&rsquo;t waste time and energy on a prediscovery summary judgment motion that is unlikely to be granted and will not advance the process.</blockquote>
<blockquote><strong>Developments Before the Hearing. </strong>Keep the arbitrator informed of developments that may occur between the preliminary conference and the hearing. Many arbitrators schedule status update conference calls with counsel. If problems arise between conferences that cannot be resolved between the parties themselves, you should contact the arbitrator to resolve them. In arbitrations with three panel members, agreeing to use the chair for procedural orders and discovery rulings is also efficient and less costly.</blockquote>
<p><strong>At the Hearing</strong></p>
<p>Because some time inevitably passes between prehearing conferences and the actual hearing, the opening statement at the hearing offers another opportunity for the advocate to communicate effectively. Tell the story of the dispute so it is clear in the arbitrator&rsquo;s mind. Don&rsquo;t assume the arbitrator remembers all the facts and players in the dispute from the prehearing brief. Arbitrators should be told what they are supposed to understand from the evidence and how you will present it to them. Arbitrators like to follow the law, so craft the story in such a way that they can apply the law when they reconstruct the facts and timeline of the case.</p>
<p>Manage your time effectively at the hearing. The process benefits from counsel making estimates of how long direct and cross-examination of witnesses will take; confer with your opponent about those estimates and share them with the arbitrator to expedite the hearing. Know when to stop examining a witness once the testimony becomes repetitive or the point has already been made. To be sure your point has been made, ask the arbitrators if they would like to hear more about the topic or if you should move on to something else. Use stipulations when possible and ask the arbitrator to set time limits when necessary.</p>
<p>Adapt your performance to the agreed upon setting and rules. Because this is arbitration and not a jury trial, showing off and grandstanding are inappropriate. On the other hand, being too timid and soft-spoken is not conducive to effective advocacy. Find your own natural and confident demeanor that allows you to communicate with clarity and credibility.</p>
<p>Make your evidentiary objections count. Too many objections interfere with the flow of the hearing. Some arbitrators tend to let in more evidence than a judge, but they temper it with the admonition that it is unlikely to be considered with the same weight as other properly admitted evidence. Although not bound to follow the rules of evidence unless specified in the agreement, arbitrators generally do so; therefore, make your objections effective ones that put the arbitrator on notice of legitimate issues of trustworthiness and relevance.</p>
<p>During closing argument or in post-hearing briefing, help the arbitrators organize their thoughts while the evidence is still fresh in their minds. Like the opening brief or statement, it is another opportunity to tell the story and select evidence to prove it. Persuade the arbitrator that you have the facts and law on your side by effective use of exhibits, testimony, or visual aids. Present your claim or defense with logical and factual evidence. Do not throw in the kitchen sink. Tell the arbitrator explicitly what relief you are seeking and why it is realistic for this case. Increasingly, arbitrators are writing comprehensive, well-reasoned awards; and any roadmap of facts and evidence you have presented may benefit your client in the outcome.</p>
<p>Most arbitrators are cognizant of the failed expectations of commercial arbitration, which has become more like litigation with extensive discovery, widespread motion practice, and contentious advocacy resulting in high cost and inefficiency. In 2010, the College of Commercial Arbitrators, in conjunction with in-house counsel, litigators, and arbitrators, produced the <a href="" _rte_href="" target="_blank">Protocols for Expeditious, Cost-Effective Commercial Arbitration</a> [PDF]. The Protocols offer additional guidance to counsel to effectively and economically navigate the arbitration process.</p>
<p>Awareness of the trend for efficient and cost-effective arbitration and appreciation for the flexibility of the process are essential for successful arbitration advocacy. Effectively organizing and analyzing the case, communicating it with confidence and authority, and cooperating and facilitating the procedural aspects may well tip the scales in your favor in arbitration.</p>
<p><strong>Keywords:</strong> woman advocate, litigation, commercial arbitration, arbitrator, hearing, discovery</p>