Streamlining the Arbitration Process


by Norm Brand

Reprinted with permission from How ADR Works, Editor in Chief Norman Brand, published by BNA Books, Washington, D.C. Copyright © 2002 by the American Bar Association, Chicago, IL.

January 2007

Norm Brand

INTRODUCTION

Arbitrators sell curable ignorance. You know why your client should win; we do not. Indeed, we begin by not knowing anything about the case. Your job is to educate us. The process of educating an arbitrator is different from educating a jury or judge. Three aspects of educating an arbitrator are unique. First, because you have chosen an arbitrator who knows a lot about employment law and the workplace, you can assume the arbitrator has a framework for understanding your dispute. Second, arbitrators are active participants in their own education. They pride themselves on not leaving the hearing until they understand all the facts and your theory of the case. If a witness (even an expert witness) is unclear in his answers, the arbitrator may well ask for clarification. Third, we want to learn efficiently. We try to shape the process so that we do not need to listen to cumulative or repetitive testimony and we try to make evidentiary rulings that help the parties shape their case. You begin educating the arbitrator through the prehearing conferences, continue during discovery, prehearing briefs, and the hearing. You complete the process in your posthearing brief. Not every case requires all of these steps, but we will examine them to ensure that you are prepared for the case that does.

PREHEARING CONFERENCES

You only get one chance to make a first impression. If the arbitrator is not someone you have worked with before, the prehearing conference will be the first time she gets to learn about your case. [1] Before we have our prehearing conference call, I have my secretary ask the parties to send me relevant documents, such as the arbitration agreement, any employment agreement, and any filings that made in connection with this case in a court. I read the material before the conference call, so that I know what the parties have agreed to as a process and what they have argued, if anything, before a court. I generally begin by asking the plaintiff what the case is about and what legal steps, if any, have brought us to this prehearing conference. [2]

What I need to hear first is the big picture, stated as neutrally as possible. The prehearing conference is not the time for advocacy. That time comes later, when the clients are involved. For example:

This is a sexual harassment case involving a nurse and a doctor who worked together in his plastic surgery practice. Plaintiff alleges Doctor X improperly touched her, made sexual comments, and conditioned her job advancement on sexual favors. He did this in the presence of other employees and during times when plaintiff had to work alone with him. Plaintiff told him to stop, told the office manager about the problem, and when nothing improved, she quit. Since that time, she has been under medical care and unable to work.

Notice three things about that statement. First, there is an attempt at neutral phrasing in the first sentence. Compare that with an advocacy statement: “Doctor X engaged in egregious sexual harassment of Nurse Y, who begged him to stop, but he kept it up until her own doctor advised her to leave to preserve her health.” The latter statement is likely to evoke a strong reaction from Doctor X’s counsel, who feels she must prevent the arbitrator from viewing her client in a bad light, and who then begins to argue her case. Second, by using “alleges,” counsel acknowledges that nothing is yet proved and opposing counsel may well agree that this is what the case is about, and this is what plaintiff, indeed, alleges. There is still an opportunity for defendant’s counsel, when her turn comes, to state neutrally what the defendant contends. Third, by giving general information about the alleged course of events, counsel gives the arbitrator some basis for understanding what discovery might be required. In this case, it is inevitable that someone will want to depose the office manager.

On the defense side, one of the least successful tactics in the prehearing conference call is to be dismissive. Counsel professes embarrassment at having to waste the arbitrator’s time with so patently baseless a complaint. He acts put upon by every statement and request that plaintiff makes. He invokes the expediency of arbitration to enlist the arbitrator in “getting this over with quickly.” At the end of the day, it may turn out that plaintiff’s case is all smoke and mirrors, as defendant suggests. But no sensible arbitrator is going to make that sort of judgment—implicitly or explicitly—based on defense counsel’s opinion. The better strategy is to support the education of the arbitrator in the facts of the dispute. You can express a willingness to provide everything that is needed to resolve the dispute, so that the arbitrator can rapidly reach a reasoned conclusion.

After the plaintiff’s general statement, I ask opposing counsel if that sounds like what the allegations are, ask for any clarifications, and ask for a bit more detail. Again, I want that detail so I can determine what discovery is likely to produce relevant evidence. If counsel is inflammatory or argumentative, it will result in a lot of wasted time and money. Counsel choose an arbitrator who can be trusted to act as a professional. They must trust her to not be swayed by emotionally charged, non-evidentiary arguments. At the conference, I also ask about any motions to stay or compel arbitration. I want to know if there is an outstanding court order. If so, I will need to coordinate what we do with what the court has required.

Your challenge in the prehearing conference is to give the arbitrator both a big picture and enough detail so that he can make sensible tentative rulings on discovery. Although arbitrators pride themselves on being quick studies, even the quickest arbitrator is unlikely to have your grasp of the case. Feel free to correct the arbitrator if he gets a fact wrong, answer his questions neutrally, and watch for signs of misunderstanding. Most of us are grateful when counsel ensure we have a good understanding of the case. The better you educate the arbitrator, the more likely he is to make discovery efficient.

DISCOVERY

One of the most difficult challenges for an arbitrator is to make discovery rulings that preserve both the efficiency of arbitration and essential due process. Sometimes the parties are themselves intent on replicating the civil justice system. That is, of course, their right. As arbitrators, however, we feel obliged to offer parties some options that can make the process more efficient. Here are three options I sometimes suggest.

First, is it necessary to have a dispute over document production? The employee’s personnel file, the employer’s rules, handbook, memos interpreting the handbook, written responses to plaintiff’s complaints, if any, and documentary evidence relating to other employees (for instance, the qualifications of the employee who got the promotion) are all likely to be relevant and should be produced without objection. Because technical standards for admissibility are relaxed in arbitration, the likelihood a document will lead to admissible evidence is greater. On the other hand, a legitimate request can become onerous or burdensome because of its unlimited scope. If the arbitrator does not understand the scope of the request (because she does not know, for instance, the size of the company), or if she does not recognize the difficulty of meeting the request, educate her.

Arbitrators are most sensitive to arguments that documents are subject to some cognizable claim of privacy or privilege. Rather than argue about what might turn up and might be privileged, set a date for making those arguments at another prehearing conference call—after the documents have been located and reviewed by counsel. A confidentiality agreement issued as an interim order of the arbitrator can be immediately confirmed and thus become enforceable with court sanctions. A privilege log, with documents that can be reviewed turned over to the arbitrator on a date certain so that he can make rulings, keeps discovery from stagnating.

A basic principle to keep in mind is that you can always schedule a conference call with the arbitrator on short notice. You should try to work out discovery issues with opposing counsel, but knowing that a decision maker is readily available may be an aid. Consequently, you do not need to decide every discovery issue at the first prehearing conference.

Second, to what can you stipulate? There are always foundational facts (periods of employment, wages, etc.) that are not disputable. Often, there are many other facts that, upon reflection, can be stipulated without undermining your theory of the case. Keep in mind that an experienced arbitrator has heard evidence of many strange occurrences in the workplace. What might make a vivid impression on a jury may be nothing more than datum for the arbitrator. If so, a stipulation may educate the arbitrator about that fact, save time in discovery and hearing, and still allow you to make the arguments you contend are supported by that fact. As the case progresses, you may decide to stipulate facts that you had seen in a different light earlier in the process. To this end, I generally ask parties to attempt to add to the factual stipulations shortly before the hearing.

Third, does everybody really need to be deposed? It is usually clear that depositions of certain key witnesses are appropriate and needed. The only question, usually, is how long their deposition will take. But frequently there is a list of 40 or 50 witnesses, all of whom one side or the other wants to depose. Sometimes, this daunting list of witnesses is an artifact of prehearing negotiations, where the parties tried to make their settlement proposals seem reasonable in light of the alternative. Sometimes the parties are inexperienced in arbitration and are simply bringing their normal litigation posture to arbitration. In order to offer the parties the advantages of arbitration, I suggest a tiered approach to promote efficiency. In the first tier of depositions the major players are deposed—for example, the plaintiff, the alleged harasser, the person to whom a complaint was allegedly directed, and the person who investigated. Sometimes there is a chief corroborating witness, as well. While defendants sometimes complain that they are not asking for nearly the same number of depositions as plaintiff, equal numbers of depositions do not amount to an equitable process. Defendants generally have access to far more people and evidence – without depositions – than plaintiffs.

Depending on the length of time and number of incidents alleged, a single-day deposition is likely to be sufficient, even for key witnesses. If the parties do not agree to a longer time, instead of hearing arguments about why that additional time is needed, I am inclined to allow the shorter time and invite a showing that it was insufficient. In one case, a one-day deposition appeared to have been futile because of a language barrier. A second day of deposition, with a translator, demonstrated that mendacity, rather than misunderstanding, underlay confusing and unresponsive answers. If you know that you can get additional deposition time, based on what occurred, you might not initially want to argue about the length of the deposition.

Second, after the first tier of depositions, you know what the major players say. This may give you a different view of how critical the testimony of some of the other witnesses will be. It may be possible to stipulate to some facts that would be proved by the testimony of minor witnesses. Alternatively, you may already have deposition testimony that is sufficient to undercut that minor witness’ testimony. Some parties stipulate that depositions can be entered instead of live testimony. This can save time, but you should recognize that this will change the character of the deposition and require the arbitrator to rule on the objections made during the deposition. If your style is to object for tactical reasons, that may not serve you well because many of the objections will be overruled. Moreover, before you can rely on the evidence, the arbitrator will have to rule on the objections so you know what is actually in evidence.

BEFORE THE HEARING

When we set a date for the hearing, we also set dates for exchanging witness lists, stipulations of uncontested facts, disclosure of experts, and exchange of expert reports. These exchanges can lead the parties to a different view of what they need to do at the hearing. I encourage parties to have a conference call with me if they are close to making stipulations that could limit the hearing and need some help in reaching closure. If I have been sufficiently educated by the parties, I can sometimes express a view on why some evidence would not appear convincing to me. In those cases, the parties can agree to a stipulation that effectively eliminates that line of argument. Similarly, two weeks before a hearing there may be motions that could shorten the hearing. Again, you must remember that an arbitrator’s ability to decide a motion limiting the evidence is based on how well you have educated her. If she has any doubt, she is likely to allow the evidence to ensure the finality of the award.

AT THE HEARING

Arbitrators tend to be activists when it comes to expediting the hearing and ensuring that they have the information they need to decide the case. We ask questions if we are unclear on what a witness said, or if we are missing a piece of the argument. This is especially true with expert witnesses. Most arbitrators feel they are smart enough to understand a good layperson’s explanation by an expert and will ask direct questions if they do not understand the explanation. Similarly, the arbitrator may ask a clarifying question of counsel to understand where a line of questioning is going. While it is sometimes necessary to have the discussion outside the hearing of the witness, the question may help the advocate understand how the arbitrator perceives what has come in so far. All of this questioning gives counsel an opportunity to know what the arbitrator is thinking, to see where the arbitrator perceives vulnerabilities in the case, and to adjust her strategy to ensure the arbitrator is properly educated. In addition, at times, the arbitrator’s questions show a sufficient understanding of the topic so that no further testimony is necessary.

The arbitrator’s rulings on evidence can often guide your presentation of the case. If the arbitrator rules some piece of evidence irrelevant, you can ask for an explanation of why it is irrelevant. You may want to explain that your purpose is not to argue with the ruling, but to understand its basis. Most arbitrators are quite willing to explain a ruling. Once you understand the reason you may need to ask if there was a misunderstanding of your argument, or adjust your case presentation. Alternatively, as you consider that ruling, you may find that some witnesses will not be necessary. As the case develops, particularly if it is a multi-day case, we may ask whether all of the following day’s witnesses are necessary, encourage offers of proof, and ask for stipulations. In each instance, our goal is to shorten the hearing, making the arbitration process more efficient.

Remember that arbitrators, unlike judges, are busy entrepreneurs. Many of us are scheduled to hear multiple cases during a week or month. Professional arbitrators want to enjoy a reputation for expeditiously hearing and deciding cases. Knowing this, shrewd counsel sharpens the focus of his case, shapes the introduction of evidence to prove (but not over prove) necessary legal theories, and judiciously seeks to streamline the process. This not only makes for a more effective presentation, but helps the arbitrator maintain her reputation for administering an efficient process. Winning ultimately depends on the strength of your case, but assisting the arbitrator in efficiently moving the case toward conclusion can help your chance of prevailing by underscoring your confidence in the case.

THE POSTHEARING BRIEF

Your first question should be: “Is this brief necessary?” If you have provided a thorough opening brief setting out the law, and if the evidence has come in as you expected, it might not be necessary to write a brief. Oral arguments may satisfy you, your client, and the arbitrator. If you are in doubt, ask. Let the arbitrator tell you if he feels a need to have the case briefed. You should be aware, however, that an arbitrator is unlikely to refuse counsel’s request to file a brief. Unless the case was so simple that filing a brief would be a manifest waste of time and expense—or an abuse of the process—an arbitrator is unlikely to forbid briefs. You should be aware that briefing the case inevitably means a delay in receiving the award and opinion, particularly where counsel give each other generous continuances.

By the time you write your posthearing brief you have already done most of what you can to educate the arbitrator. This brief is not a place to rehash everything that was said before. Nor is it a place to try out every new theory you can think of to make the evidence support your legal conclusion. Three major principles should guide your brief. First, assume you have educated the arbitrator about the facts of the case. Feel free to use them copiously to strengthen your arguments, but do not simply repeat them. Second, consider how people try to convince you to buy their product or service. They do not use stilted, formal language, legalisms, or passive constructions. You are asking the arbitrator to buy your argument about how this case should be decided. Capture her imagination with your similes; convince her with your logic. Use language as a tool, not a bludgeon. Third, give the arbitrator the arguments that justify rejecting your opponent’s position, as well as selecting your position. Why should you win? Why should they lose? Make sure the arbitrator knows precisely.

From the first prehearing conference call to the last day of the hearing, most arbitrators make a diligent effort to streamline the case. As I noted earlier, you should give careful thought to whether you want to arbitrate at all. If you choose arbitration, you should expect your arbitrator to be committed to promoting an efficient process that provides due process at the most reasonable transaction cost. If you make a similar commitment to efficiency and due process, you will enhance your chance of success at arbitration.

End Notes

1 In the American Arbitration Association process, the arbitrator receives the demand for arbitration, together with witness lists, which generally contain little information about the case. The arbitrator reviews these documents before formal appointment in order to make appropriate disclosures.

2 For simplicity I use “plaintiff” and “defendant” throughout, meaning to cover “claimants” and “respon¬dents,” and “Employer” and “Employee,” as well.



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Biography




Since 1983, Mr. Norm Brand has been engaged full time in dispute resolution. A former negotiator and law professor, he has a varied national practice, ranging from arbitrating high profile individual disputes – such as hockey player Petr Nedved’s eligibility to play in the IHL, to mediating high stakes public disputes – such as the nation’s first “pay for performance” contract in the Denver City School District.

Mr. Brand has arbitrated and mediated cases involving complex issues of law and large dollar amounts. His largest arbitration award resulted in payments of approximately $40 million.

He has served as sole arbitrator in a $50 million biotech case, and in many multi-million dollar pension cases. He mediated the model annual maintenance agreement between Sacramento Delta Reclamation Districts and the California Department of Fish and Game and a dispute over remediation of 9 Superfund sites involving 19 parties. He mediates discrimination claims for the EEOC and has mediated and arbitrated executive compensation, discrimination, and wrongful termination disputes involving Fortune 500 companies.

Mr. Brand has engaged in med-arb under statutory procedures involving state and federal entities, as well as in trust fund and trade secret cases. His primary practice has been in labor and employment law, but he has also served on specialized panels requiring scientific literacy in biochemistry, medicine, and psychiatry, as well as an understanding of research and laboratory procedures.

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Website: www.normbrand.com

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