Practice Tips from Experienced Arbitrators

By Leslie King O’Neal

Plan Ahead

• Drafting the arbitration agreement to specify the applicable law, the hearing location, the parties included and appellate rights.
• Managing the hearing by:
  • Thoughtful evaluation of the hearing time needed
  • Summarizing & indexing voluminous exhibits.
  • Effective use of experts
• Understanding proof needed for liability and damages
• Exhibiting professional conduct at all times

Arbitration is Contractual—Sharpen Your Clauses

Noting that issues about applicable law or hearing location cause delays in resolving cases, the panel urged attorneys to consider these issues in drafting arbitration agreements.

Poorly drafted arbitration clauses often create litigation, thus defeating arbitration’s purpose as a quick, efficient and cost-effective dispute resolution method. Previous posts examined such cases.[vi]

What Law Applies?

In addition to the basic elements, arbitration clauses should address choice of law issues. Which law applies: the law of the jurisdiction where the project is located, the law where one of the parties is headquartered or some other jurisdiction’s law?

Where Will the Hearing Be Held?

 If the hearing is in person, where will it be held? Some contracts require hearings at the project location, but what if it’s in a remote area? Should one party decide location? Addressing these items in the arbitration agreement can prevent disputes later, saving the client time and money.

Can We Appeal?

Although the Federal Arbitration Act provides limited grounds for vacating arbitration awards, which do not include arbitrator mistakes of fact or law, parties can provide for appellate arbitration. Both JAMS and AAA have optional arbitration appeal rules[vii]. If parties want arbitration appellate rights, they should include these rules in their agreement.

Who’s Included in Arbitration?

Construction projects usually have many participants. It’s more challenging to include all potential parties in arbitration if their contracts don’t have arbitration clauses. Some arbitration clauses are drafted broadly to include non-signatories.[viii]  In certain circumstances non-signatories can compel arbitration or be compelled to arbitrate because of “equitable estoppel,” where the claims are intertwined and dependent on a contract with an arbitration clause. Also, arbitration agreements may cover “derivative claims.”[ix] Consider how to include potential parties in arbitration as early as possible so the case can proceed smoothly including all necessary parties.

Professionalism & Organization Matter

Arbitration may be less formal than state or federal court, but counsel should not consider this informality as a license for unprofessional behavior or sloppy work. Also, counsel should think carefully about the amount of hearing time needed. Scheduling additional arbitration time may result in a lengthy delay between hearings, causing additional expense. Attorneys should organize their cases to present all evidence efficiently within the allotted time.

Unprofessional Behavior Hurts Credibility

The panelists agreed that a lawyer’s unprofessional behavior, such as failing to cooperate with opposing counsel, attempting to “sandbag” opponents, or making derogatory remarks about opposing counsel or others, hurt the lawyer’s credibility with arbitrators. Similarly, failing to comply with deadlines, providing incomplete or inaccurate information and being unprepared are as unacceptable in arbitration as they would be in court.

Help the Arbitrators Understand Your Case

While arbitrators usually have subject matter expertise, they don’t know the facts of your case as well as you do.  Making the exhibits easier to review and understand saves valuable time helps the arbitrators focus on the key points.

Summarize & Index Voluminous Documents

Arbitrators have limited time to review documents and read expert reports. Consequently, they appreciate having summaries and indices of voluminous documents or reports. Spending arbitrator time paging through documents is inefficient and expensive.

Develop a Uniform Numbering System for Exhibits

Coordinating with opposing counsel to develop a uniform method for numbering and referencing exhibits is very helpful. “One of the most expensive parts of arbitration is the time arbitrators spend reviewing evidence, such as witness statements and exhibits. Making this task easier and less time-consuming with a uniform method for referencing exhibits can result in cost savings.”[x] Best practice is to ask the arbitrators how they prefer exhibits to be numbered and referenced before the final hearing.

Use Experts Effectively

Expert testimony is a critical part of many construction cases. The scheduling order should include the timeline for identifying experts and producing reports. Complying with these deadlines is important to maintaining fairness for all parties.

Arbitration allows experts more flexibility in presenting testimony than a trial does. Some arbitrators like to “hot tub” experts, having both sides’ experts testify on the same day, allowing the arbitrators to question them. Experts can also testify using a power point presentation to illustrate their testimony. Discuss different testimony options with the arbitrators before the hearing.

Understand Proof Required

Usually, civil procedure and evidence rules don’t apply in arbitration, but parties must prove their cases by competent evidence. [xi] Counsel should understand the proof needed for all elements of their claims. Reviewing applicable jury instructions can provide a guideline for necessary proof. Consider creating an “order of proof” listing each element and describing how it will be proved—through documents or witness testimony. Arbitrators don’t appreciate “document dumps” of exhibits without testimony to connect them to claims or issues.

Don’t Forget About Damages

Sometimes counsel focus so much on the liability aspect of the case that the damages portion is given short shrift. This is a mistake. Damages presentations require the same care and attention as liability claims need.  Presenting damages clearly requires organization and creativity. Fortunately, damages claims lend themselves to summaries, charts and graphs to support expert or fact witness testimony. This testimony should connect the dots between causation and damages, helping arbitrators understand the claims. Defendants are sometimes reluctant to provide alternative damages theories for fear it weakens their position. However, unlike juries, arbitrators understand that such proof doesn’t show lack of faith in defenses but rather gives arbitrators another approach to a damages award.

Takeaways

• Planning and professionalism are critical to success in arbitration.
• Have a uniform method for exhibit numbering; summarize and index voluminous documents
• Use experts effectively
• Understand proof needed for claims
• Don’t forget about damages

---

[i] The Miami-Dade Bar’s Florida Law Con is a virtual, annual CLE conference. JAMS was a sponsor of the event. The event was recorded and the presentations are available to registrants 24/7 for 4 months afterward. See https://www.floridalawcon.com/

[ii] Former 3d DCA Judge, now a JAMS arbitrator & mediator. He also serves as an appellate arbitrator.

[iii] Former Miami-Dade circuit court judge, now a JAMS arbitrator & mediator.

[iv] Former Miami-Dade circuit court judge, now a JAMS arbitrator & mediator.

[v] Former commercial & construction litigator, now a JAMS arbitrator & mediator.

[vi] See:  Getting the “Right Stuff” in Arbitration Agreements – The Construction ADR Toolbox;

[vii] JAMS Optional Arbitration Appeal Rules Optional Arbitration Appeal Procedure | JAMS Mediation, Arbitration, ADR Services; AAA Optional Appellate Arbitration Rules AAA-ICDR Optional Appellate Arbitration Rules | ADR.org

[viii] See: No Limits on Arbitration? – The Construction ADR Toolbox, discussing arbitration clauses that include non-signatories.

[ix]  See Who’s Coming to Arbitration? Arbitrating with Non-Signatories. – The Construction ADR Toolbox.

[x] See The Attorney’s Role in Preparing Witness Statements and Exhibits – The Construction ADR Toolbox.

[xi] See Rule 22(d) JAMS Construction Arbitration Rules & Procedures: “The Arbitrator shall consider evidence that he or she finds relevant and material to the dispute, giving the evidence such weight as is appropriate. The Arbitrator may be guided in that determination by principles contained in the Federal Rules of Evidence or any other applicable rules of evidence.”