SEVEN STEPS TO DEFEND AN ARBITRATION by J. S. “Chris” Christie, Jr.

Your client, the defendant, had its motion to compel arbitration granted. Rather than going away, opposing counsel is pushing forward with arbitration. How is defending an arbitration different from defending a case before a trial court? For arbitration, a defense attorney should consider the following seven steps: I. Identify the Applicable Rules First A defense attorney should identify the applicable rules first. Rather than familiar federal or state rules of civil procedure, the possible versions or sets of arbitration rules are numerous. Arbitration rules vary significantly on discovery and other issues. The Federal Arbitration Act, 9 U.S.C. §§ 1-16, the Uniform Arbitration Act (adopted by most states), and the Revised Uniform Arbitration Act do not provide procedural rules for arbitration. The parties can agree pre-dispute or post-dispute to applicable rules. Ideally, the applicable arbitration rules are identified in the arbitration agreement. Failing agreement, a court can decide on the arbitrator and the rules or the arbitrator can decide on the rules. Some sets of arbitration rules are specific to an area of law (e.g., employment, patent, international) and some to an industry (e.g., securities, real estate, employee benefits). While the American Arbitration Association (“AAA”) is widely known, many other organizations offer comprehensive rules (e.g., JAMS Comprehensive Arbitration Rules and Procedures, www.jams.adr.com). II. Identify Witnesses and Evidence Early Early, a defense attorney should investigate witnesses and other evidence. This information is needed for arbitrator selection and for decisions as to how much discovery might be negotiated. Arbitrators are selected at the beginning of arbitral proceedings, rather than at the end, when a jury is selected. Before arbitrator selection, a defense attorney should know what type of person the client would want to serve as both judge and jury deciding the dispute. Therefore, enough investigation is needed to know how the claims will probably be defended so decisions can be made when selecting an arbitrator. For defending a particular arbitration, almost no discovery might be best or extensive discovery might be best. Investigate early to have better information as to how much and what discovery may be needed. Before the arbitrator is appointed, a discovery agreement might be negotiated. See AAA Comm. Arb. R-1 (“The parties, by written agreement, may vary the procedures set forth in these rules. After appointment of the arbitrator, such modifications may be made only with the consent of the arbitrator.”). If no party agreement is reached before the arbitrator is appointed, the amount of discovery can be negotiated and presented to the arbitrator in a proposed draft of the arbitrator’s first order, at times called a Scheduling and Procedures Order.

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1/1701460.1 2 . During an initial AAA administrative conference. but more information is better. Some of these individuals are career arbitrators and mediators. the attorneys can tell the case manager the type of person preferred: A lawyer? If not a lawyer. The defense attorney should assess the client’s need for discovery and.III. The arbitrator (absent specific applicable rules to the contrary) has substantial discretion as to the scope of discovery. Westlaw and whatever other sources are available. having one arbitrator is a risk that a defense attorney might want to avoid. attempt to persuade the arbitrator to accept the discovery wanted by the defendant. an engineer or an industry expert? A retired judge? An experienced full-time arbitrator? An arbitrator with a flexible schedule? AAA case managers usually will attempt to include the types of persons requested on the list of potential arbitrators. open-mined and would do equity? Or does the defendant want an arbitrator who is strict. Often. Other lawyers who have had a candidate as an arbitrator can be a great source of information. if the parties disagree. IV. If the size of the dispute warrants the expense. the arbitration agreement provides for the number of arbitrators. Because arbitration awards usually cannot be appealed. Before an arbitrator is appointed is the best time to negotiate discovery parameters. If deposition discovery is needed. Select the Right Arbitrator(s) Selecting an arbitrator can be more important than selecting a jury. a defense attorney may want to hire a private investigator to gather information. the parties can agree to a different number of arbitrators than provided in an arbitration agreement or in applicable rules. but also might make the result expected more predictable. rule-oriented and would apply the law? Just as psychologists at times help select a jury. an accountant. if different from what is provided in the applicable arbitration rules. At times. a defense attorney might consider using a jury consultant during arbitrator selection. Plan Early for Discovery A defense attorney should plan early for discovery. because arbitrators serve as judge and jury. Before the preliminary hearing is the next best time to negotiate discovery parameters. Having three arbitrators is more expensive. AAA panel biographies are helpful. including deposition discovery. AAA panels normally include a number of full-time neutrals. if the size of the dispute warrants the expense. a defense attorney at the first conference should be prepared to identify prospective deponents by name or position and be prepared to explain how their deposition testimony will aid fair. Usually. The most important characteristic of potential arbitrators may be psychological: Does the defendant want an arbitrator who is fair. the applicable rules do so. Whether to have one arbitrator or a panel of three arbitrators may arise. either attempt to persuade the opposing party or. Search the web. efficient and economical resolution.

so too may they specify by contract the rules under which that arbitration may be conducted” (citation omitted)). for such communications. a defense attorney would want to send the proposed order to opposing counsel and negotiate whatever provisions might be negotiated. Board of Trustees. 468. Even if no agreement is reached. providing arbitrators and opposing parties with a draft Scheduling and Procedures Order will likely make the issues the defendant wants addressed at the preliminary hearing become part of the agenda for the preliminary hearing. An advantage to an agreed Scheduling and Procedure Order is that the arbitrator’s role should be to implement whatever the parties agree upon. If all issues are not agreed upon. before the hearing. 489 U. Inc.1 3 . in fact. the Order might provide that one of a panel of arbitrators can rule on preliminary matters and can sign subpoenas. which at times might be called a Case Management Order or called Pre-arbitration and Arbitration Guidelines. Additionally. The AAA almost always conducts these conferences by telephone. Some suggested topics to consider are the following: • Pre-hearing Communications –The Order might provide for how the parties are to communicate with each other and with the arbitrator for pre-hearing procedures such as scheduling.V. It is an opportunity to make a good first impression by demonstrating familiarity with the facts and legal issues. this preliminary hearing may be the defense attorney’s only contact with the arbitrator prior to the hearing. discovery disputes. VI. Typical subject matter includes the issues to be resolved. a defense attorney should consider drafting a proposed Scheduling and Procedures Order. What should be in the Scheduling and Procedures Order? The answer depends on what arbitration rules apply and on defendant’s desire to avoid discovery. only ruling when there is not agreement. Prepare for the Preliminary Hearing A defense attorney in arbitration should prepare for the first and perhaps only preliminary hearing. The third arbitrator might have the discretion to involve all arbitrators. Start knowing the default (usually what is in the applicable rules) and negotiate appropriate changes. v. An objective of this preliminary hearing usually is to determine those issues that will. See Volt Information Sciences.S. 479 (1989) (“Just as [the parties] may limit by contract the issues which they will arbitrate. with copies to the AAA. discovery and scheduling. which is often called a scheduling and procedures conference. The Order might provide for using direct email. If the parties each chose one arbitrator and those two chose the third arbitrator. need for discovery. the parties’ positions can be stated as to remaining issues. Presiding Panel Member Decisions – For arbitrations with a three arbitrator panel. the third arbitrator would seem to be the natural choice. Before the preliminary hearing. Draft the Right Scheduling and Procedures Order A defense attorney usually should draft a proposed Scheduling and Procedures Order designed for that particular dispute. The AAA normally expects parties to communicate with the arbitrator through the AAA. and subpoenas. Often. and other litigation strategy. • 1/1701460. be arbitrated.

referencing the Federal Rules of Civil Procedure. expert discovery such as document requests and a deposition. Expert Discovery – The Order might provide for expert reports and. If there is to be discovery. when appropriate. R-4(b) & (c) & R-6 (implying that affirmative defenses do not need to be pled).1 4 . Cf. one should not move for summary judgment.g. AAA Comm. Whether and how affirmative defenses might need to be pled might need to be clarified. Reasoned Award –The Order might call for a reasoned award or for an award with findings of fact and conclusions of law like a bench trial. effective advocacy in a courtroom is effective advocacy for arbitration. Handle the Arbitration Hearing Effectively • • • • • • • • • A defense attorney should adjust what he or she normally does to fit the forum – arbitration. a claim plainly barred by the applicable statute of limitations). Generally. It might simply provide that the Federal Rules of Civil Procedure apply. The following additional considerations apply to an arbitration hearing: • Do Not Rely on Summary Judgment – In most arbitration. absent a clear factual situation (e. Hearing Exhibits – The Order might require a notebook of joint exhibits for a hearing with each party’s having separate exhibits as appropriate. Normally. Pre-hearing and Post-hearing Briefs – The Order might provide for the length and service dates for pre-hearing and post-hearing briefs. Court Reporter – The Order might provide whether the hearing will be transcribed by a court reporter. For some disputes. Appeals – The Order might provide for an agreed upon arbitral appeal. the Order might require initial witness lists and exchanges of documents weeks after entry of the order and final witness and exhibit lists weeks before the hearing. Deadlines should be included for providing the exhibits. or otherwise move for judgment as a matter of law. Generally. VII. In large part due to the rare circumstances in which an arbitrator’s 1/1701460. a reasoned award would seem to favor a defendant. Witness and Exhibit Lists – The Order might require pre-hearing witness lists and exchanges of documents. adequate expert discovery can be essential. Another option is to provide that the parties may serve certain types and amounts of discovery. Pre-hearing Discovery – The Order might provide for discovery. one cannot appeal an arbitration award to a court.• Affirmative Defenses and Amendments to Pleadings – The Order might provide deadlines for amendments to pleadings. Because a claimant must usually establish numerous elements to prevail.. The Arbitration Hearing Schedule – The Order might provide when and where the arbitration hearing will be held and how long the arbitration hearing might take. Not referencing procedural rules for discovery probably makes disputes about whether a party has complied harder to resolve. arbitration awards are simple like a jury verdict.

The response is that the arbitrator may allow such argument. just like juries. if the arbitrator suggests waiving opening. Remember the Rules of Evidence – The rules of evidence exclude evidence based on its being unreliable. Counsel’s reading portions of depositions at an arbitration hearing usually is not appropriate. arbitrators are people. Submit Affidavits or Deposition Excerpts – Affidavits or deposition excerpts can be used for evidentiary foundations or other secondary matters. the witnesses and the parties’ positions.” Mr. a pre-hearing brief probably should focus on facts. who is the fact-finder. Be prepared to give a one or two minute version and.decision may be reviewed. and establish your themes. Submit an Effective Pre-hearing Brief – Pre-hearing briefs are normally the first chance to persuade an arbitrator to rule for your client. with a table listing the exhibits with places to mark when an exhibit is introduced and is admitted. turn to the arbitrator and explain why the evidence proves the point in question. Argue Persuasively – Make the arbitrator want to rule for your client. The other side will probably object. Organize Exhibits into Notebooks – Arbitrators do not have courtroom staff. too. since the proceeding seeks to reveal the truth. Prepare Witnesses – Witnesses need to be prepared just as for a trial. Ideally. Prepare a Closing Argument – Do not waive closing argument unless the arbitrator insists. usually follow evidentiary rules when presenting evidence. So. Arbitrator Smith is another. Prepare an Opening Argument – Prepare a short. After a crucial factual development. provide pre-marked exhibits in notebooks. A pre-hearing brief should introduce the arbitrator to the parties. In addition. tell a story. The witness should talk to the arbitrator. • Do Not Call the Arbitrator “Judge” – The arbitrator is not a judge and should not be addressed as “your honor” or “judge. Rules of Evidence Rarely Enforced – An arbitrator’s common evidentiary ruling is “I’ll let it in for what it’s worth. simple and convincing opening argument (five to twenty minutes. Arbitrator is one appropriate salutation. one should summarize and synthesize the case in closing./Ms.1 5 . • • • • • • • • • • 1/1701460. Mr. On the other hand. Remember. do not rely on the rules of evidence as a means to keep out evidence. but stop for a mini-closing argument. Keep it short (less than one minute)./Ms. While some law is likely to be appropriate. tell the arbitrator you have that ready. Emotional jury speeches are likely to be counter-productive.” So. arbitrators rarely summarily dismiss any claims or otherwise rule as a matter of law. depending on the dispute and the arbitrator). Especially if post-hearing briefs are not expected. use evidentiary objections strategically to convince the arbitrator that the opposing parties’ evidence deserves little weight. Stop and Argue – Do not overdo it. Smith might be best. in the middle of the hearing. The witness should be prepared for the arbitrator to ask the witness questions directly.

In addition. a transcript should protect a party from overt bias by an arbitrator at the hearing. Failing to make appropriate objections might waive these limitations.1 6 . it may be almost impossible. opposing counsel will then regret having pushed forward with arbitration. 1/1701460. Having a court vacate an adverse arbitration award is difficult in any circumstances. Without a transcript.• Submit an Effective Post-Hearing Brief – Post-hearing briefs are a last chance to persuade an arbitrator to rule for your client. Conclusion • • A defense attorney can adjust his litigation skills for the arbitral forum by following the above seven steps. Hopefully. Copies of the primary cases are useful. Do Not Waive Limitations on Arbitrator’s Authority – The arbitration agreement or the applicable arbitration rules may limit the arbitrator’s authority. Arrange for a Transcript – A court reporter’s transcript is useful in drafting posthearing briefs. The arbitrator probably does not have a law clerk. A brief on a disk with hyperlinks to the exhibits and cases on the same disk is better.

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