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Rules of Engagement: Arbitration Success Depends on Specialized Skills

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Rules of Engagement: Arbitration Success Depends on Specialized Skills

Source: Los Angeles Daily Journal (Dicta)
Date: July 16, 2002
Although the skills and strategies needed and utilized in litigation are similar to those required for obtaining the desired result in arbitration, they need to be modified to meet the purposes of the arbitration arena. Because the desire for expedition and economy underlies the basic reason for the arbitration process, the skills required and the strategies used must be tailored to accommodate those requirements. Here are some examples of skills and strategies that will both promote the goals of arbitration and produce a result favorable to the client.

At the start of the arbitration process, it is imperative to determine the rules of engagement. Because the majority of arbitrations arise out of contractual provisions requiring it, the place to begin in determining the rules is the contract itself. Often a review of the contract will disclose that the provision for arbitration is quite general, such as, "Any dispute arising under this agreement shall be subject to binding arbitration." Obviously, such a provision leaves a plethora of choices for rules to govern an arbitration.

When faced with an agreement that does not specify the rules to be applied, the lawyer should select rules that benefit the dispute and needs of the parties. As a general rule, institutional providers of alternate dispute resolution services--recognizing that disputes of different types and complexities require different arbitration rules--have a series of rules from which the parties can select. These rules generally provide relief from the more stringent discovery requirements of the Arbitration Act in more complex matters and provide a detailed schematic for conducting the process. Whatever rules are selected, however, the lawyers should have them in place at the start of the arbitration process.

One of the major aspects of arbitration is the omission and limitation of the formal discovery process that is available in the litigation process. These omissions and limitations are somewhat ameliorated, however, by agreeing to informal exchanges of requisite evidentiary materials.

The limitation on discovery in arbitration is offset by the fact that parties in arbitrations can select the decision-maker for the dispute. The selection process permits lawyers to obtain an arbitrator with qualifications matched to the issues involved in the arbitration. Lawyers, therefore, need not educate the decision-maker on the issues nor present educational evidence, which will save time and money.

A common mistake that counsel make is to ignore the fact that they are dealing with a person who is familiar with the subject matter. As a result, they inundate the arbitrator with unnecessary information. Information that is required to assist jurors or a judge who lacks expertise in an area is superfluous when dealing with an arbitrator selected largely because of his or her qualifications in a particular area. Lawyers should, therefore, appreciate their audience and focus on making their presentation informative and interesting.

Virtually all arbitrations involve the submission of arbitration briefs. The most effective briefs present only important and relevant material in a succinct and cogent manner. This is also the time to present to the arbitrator or panel the theme of the presentation. Arbitration briefs are critical. A rambling, disjointed, voluminous brief sends a message of confusion and uncertainty. A concise, focused brief sends the message that the party is prepared and organized.

When it is time to present the case to the arbitrator, it is a good idea to prepare summaries and charts explaining and detailing important events in order to direct the attention of the arbitrators to key points. Since arbitration rules generally encourage the use of documents and reports as a means of presenting evidence, the strategy is to make that presentation as "user friendly" for the arbitrator as possible while ensuring that everything necessary to preserve and promote the interest of the client is included.

Just like in a regular trial, establish a theme for the arbitration. Drawing on analogies to literature such as "Great Expectations" or "Alice in Wonderland," where right and wrong is clearly drawn, brings the matter to life. Once a theme is created, focus on that theme throughout the presentation. This will result in a concise, well-reasoned presentation that has continuity and will capture the interest of the arbitrator.

Just like litigation, arbitrations are ushered in with an opening statement. Lawyers often make the mistake of using the opening statement to reiterate every point presented in the brief. This approach is neither consistent with the goals of arbitration nor representative of either professional skill nor a wise strategy. When this occurs, at least two messages are sent to the arbitrator: you believe that he did not read the brief or that, if he read it, he did not understand it.

Both of these messages are somewhat insulting and will make an unfavorable impression on the arbitrator. A much more effective strategy is to inquire if the brief was received and if there are any questions concerning its contents. If there are questions, you will have an opportunity to respond and educate the arbitrator. If there are no questions, make a brief opening statement that simply highlights and emphasizes key points. Many times, however, an effective strategy is to waive opening statement, which can be done when you know and accept the arbitrator's level of sophistication.

Presenting evidence through testimony is not substantially different from doing so in a court setting, except with regard to expert witnesses. In a trial, vast quantities of time are spent educating the jury on the qualifications of expert witnesses. This can be significantly curtailed in arbitration through the submission of a current curriculum vitae of the expert and a minimal examination of his or her present job description and duties.

Utilization of demonstrative evidence is very effective in the presentation of the matter and helps to assist the arbitrator by visually clarifying issues. Demonstrative evidence does not require state-of-the-art electronics. The basics - photographs, charts, summaries - have proved quite effective.

As in trial, the judicious use of objections is always an effective strategy. Frequent technical objections tell the decision-maker that he or she is not capable of sifting the relevant wheat from the immaterial chaff. Objections should be reserved for truly critical matters, such as qualification and privilege.

In an arbitration, closing argument is the time to confirm the validity of the opening statement offer of proof by emphasizing the actual proof established during the arbitration hearing. Effective closing arguments result when the lawyer was successful in supporting the promises made in opening statement. Try to make it difficult for the decision-maker not to support the desired result.

The closing argument should be as focused and concise as the arbitration brief and statement. It should not be a tedious reiteration of all the testimony and documentary evidence. It should be a presentation of salient points supporting the desired result and rebutting the opposing position. It also should follow the theme established at the outset of the arbitration. As with the presentation of evidence, the use of exhibits, such as charts and summaries, can be a very persuasive strategy.

Before the dispute is submitted to the arbitrator for a decision, there are strategies that can be utilized to set floors and ceilings on the arbitration award. For instance, the parties can agree to a "high-low," whereby the claimant agrees not to require any payment above the agreed upon high award and the respondent agrees upon a minimum to be paid even if the arbitration award is below that amount. Although such an agreement can be utilized in judicial litigation, it is rarely done.

Success in arbitration, as success in litigation, is largely dependent upon thorough preparation. It is also the result of utilizing skills and strategies that suit the forum of arbitration and are designed to support its goals and exploit its advantages.




Hon. Kevin W. Midlam (Ret.), an arbitrator and mediator with JAMS, was a San Diego County Superior Court judge.

© 2002 Daily Journal Corporation. Reprinted with Permission