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ARBITRATION TIPS FOR LAWYERS

 
PRIVATE ARBITRATION VS. COURT ARBITRATION
Arbitration called for by the parties’ agreement is known as “private arbitration.” Arbitration pursuant to ORS 36.400-.425, mandated for circuit court cases for $50,000 and under, is known as “court arbitration.” A decision in private arbitration is, practically speaking, binding and final, unlike an award in court arbitration, which can be appealed to circuit court for a trial de novo. For that reason, and because of the greater sums often involved in private arbitration, the discovery, hearing preparation and hearing presentation in private arbitration is usually more extensive than in court arbitration. The following topic headings indicate the type of arbitration to which the corresponding discussion usually applies.

These observations touch on only select issues. Even an introductory overview of private arbitration requires a review of the parties’ agreement to arbitrate, the rules of the entity administering the arbitration and Oregon’s Uniform Arbitration Act, ORS 36.600-.740. The authorities for court arbitration are ORS 36.400-.425, UTCR Chapter 13 and any applicable supplementary local rules of the circuit court where the case was filed.

ONE VS. THREE ARBITRATORS (PRIVATE)
The bigger the case, and the trickier the legal issues, the more likely the expense of three arbitrators will be justified. Three arbitrators mulling the issues reduces the risk of an aberrant (and unappealable) decision.

ARBITRATORS' FEES (PRIVATE)
Initial deposits. The initial arbitrator's fee deposit often turns out to be insufficient. You and your client should anticipate the arbitrator later calling for additional fee deposits.

If one side does not pay. If your client is more interested than the opposing party in seeing the case through to conclusion, your client might end up having to advance the opponent's arbitrator's fees. Advanced fees can be included in the arbitration award, but when the award is confirmed as a judgment, that judgment is as collectible, or uncollectible, as any other.

STATEMENT OF CLAIM (PRIVATE)
Drafting. In drafting the statement of claim, consider how the arbitration award that you're hoping for will read. The remedies portion of the statement should not necessarily be as specific as the hoped-for award, but it should be drafted so that it encompasses all sought-after relief. If you may end up asking for equitable relief as well as damages, say so. If you are not yet sure if or how to allocate damages among several potential respondents, and you have a good faith basis for doing so, name them all and ask for maximum damages against each. The requested relief can be tailored as discovery proceeds, either by agreement with opposing counsel or a formal amendment of the statement of claim (with arbitrator approval, if required).

Amendments. As the case progresses, be as mindful of amending the statement of claim as you would be of amending a complaint. In most cases, that can be done by stipulation, but make sure the rules do not require the arbitrator’s permission as well. File a motion if you cannot get opposing counsel’s agreement. Do not assume that because arbitration is generally less formal than litigation that you will be allowed to expand or re-state your initial statement of claim on the eve of the hearing.

Note: In court arbitration, the issues are framed by the pleadings. If what is in, or is missing from, the pleadings, is important to your case, make sure to comply with UTCR 13.170 by providing the arbitrator copies of the pleadings. The arbitrator does not get the court file.

THE ANSWER (PRIVATE)
The rules in private arbitration often do not require the respondent to file an answer. Some practitioners prefer to delay identifying their affirmative defenses until submitting the respondent's hearing memorandum on the eve of the hearing.

A claimant faced with the lack of an answer might explain to the respondent that the applicable rules should be read to allow the respondent to forego the filing of a denial only, not affirmative defenses, and that if not filed timely claimant will argue at the hearing that any affirmative defenses have been waived.

Hiding the ball is antithetical to a basic premise of arbitration. Most arbitrators, if asked, will be inclined to require that the issues be framed by the parties earlier rather than later.

THE ARBITRATOR'S PRE-HEARING INVOLVEMENT (BOTH)
Depending on the applicable rules, in some cases there is no need for the arbitrator to be involved, after establishing the hearing date, until the morning of the hearing. But in both private and court arbitration, counsel should not be shy about seeking the arbitrator's assistance. Try to anticipate scheduling issues, possible discovery disputes, etc. If counsel cannot readily reach agreement, a quick email exchange or phone conference with the arbitrator can often keep pre-hearing proceedings on track.

Stipulations limiting discovery, e.g., the number and length of depositions, are an excellent idea. If opposing counsel rejects a proposed stipulation, consider asking the arbitrator to establish limits. But as with all pre-hearing matters, do not make the issue into a case within a case. Keep your requests short and to the point, accept the ruling and move on. Subject to the arbitrator’s direction, the more expeditious the communications/submissions the better- e.g., email vs. paper.

Note: In cases where the prevailing party is entitled to an award of attorney fees, maintain a record of a rejected stipulation to limit discovery. If your client prevails, one factor for the arbitrator to consider in calculating the fee award will be the additional time that was spent, and thus the additional fees incurred, because the stipulation was rejected.

WITNESS AND EXHIBIT LISTS (BOTH)
Witnesses who will not appear in person. If a witness might not appear in person at the hearing, make that clear in your pre-hearing witness list (in court arbitration, the prehearing statement of proof). Although most arbitrators would allow a motion made the morning of hearing to present a witness by telephone or Skype, it is better to flush out any objections via the pre-hearing witness list than to take a chance that an objection made the morning of hearing might be sustained.

Expert witnesses and their reports. Keeping an expert witness’s identity or an expert’s report confidential until the hearing is authorized only if allowed by the applicable rules, Oregon’s civil practice and procedure notwithstanding. Any rule subject to interpretation will likely be read by the arbitrator to mandate full and timely disclosure.

Declarations. Consider presenting witnesses by affidavit or declaration, consistent with the applicable rules. Doing so is a good time and money saver, and does not reduce the effectiveness of a presentation if the declaration is used to present non-controversial evidence. (It’s best to have the signed declaration in hand when you identify it in your witness list, just like it’s a good idea to have the witnesses pinned down before you put their name on the witness list.)

Perpetuation depositions. An option to consider.

SITE VIEW (PRIVATE)
Where physical conditions or spatial relationships are an issue, consider requesting a site view. A brief visit to the site with the arbitrator can make the presentation of evidence much more understandable and efficient.

HEARING MEMORANDUMS (PRIVATE, SOMETIMES COURT)
Arbitrators rely on hearing memorandums in preparing for and navigating through the arbitration hearing, and in preparing the arbitration award. If an exhibit is uniquely important, consider including it with the memorandum. If you’ve prepared a time line for the hearing, incorporate it into the memorandum. If you want to make sure that the arbitrator reads key cases or statutes, attach them. (Underlining important language in the authorities can be helpful, but be careful that your choice of passages isn’t misleading, and that any markings on the arbitrator’s copy appear identically on opposing counsel’s copy.)

The accepted arbitration ethic is that once everyone is gathered for the hearing, it is time to get underway. The arbitrator's working assumption is likely to be that all exhibits submitted in advance of the hearing are admitted unless objected to. If you plan on raising any pre-hearing issues regarding the exhibits or other matters, the arbitrator will likely be more receptive if you have signaled your intentions in the hearing memorandum.

Explain how the arbitration award should read, if that is not evident. If there are multiple respondents, explain how liability should be allocated and damages apportioned among them.

Many cases in court arbitration are not complex enough to warrant a hearing memo.

EXHIBITS (PRIVATE)
Typically, a significant difference between the case presentation in private arbitration and court arbitration is in the organization and use of exhibits. In the former, the documents are usually individually numbered, organized and presented much as they would be in a trial (other than being individually offered into evidence, in that they typically have been pre-admitted at the start of the hearing, subject to objections being raised during the hearing). In court arbitrations large collections of documents, e.g., credit card billing records or medical records, are not usually examined in detail during the hearing, and are marked as a single exhibit.

In private arbitrations involving more than a few documents, put your exhibits in a three-ring binder with an index and numbered tabs. Claimant’s exhibits start with Ex. No. 1, respondent’s with 101. Multiple respondents should coordinate their exhibit numbers to avoid using the same numbers. Make an exhibit notebook for yourself, one for each opposing lawyer, one for the arbitrator and one for the witness. If you want your client to follow the evidence closely, make one for him or her too.

Unless there is some reason that using the original of an exhibit is important, copies are acceptable. If you do use the original, it goes in the witness notebook.Whether copies or original, do not add markings to the exhibits, except that underlining key passages in deposition transcripts is the norm. If you want to emphasize a specific portion of a document, blow the document up and put the underlining/highlighting on the blow up.

If a visual aid is evidence, e.g., a video, as opposed to pre-existing evidence presented in a different form, e.g., a blow up of a photo, which photo is already included in your exhibit list, it should be numbered and included in the pre-hearing exhibit list. Err on the side of pre-hearing disclosure.

Delivering the entire set of exhibits to the arbitrator before the hearing is usually not helpful. The arbitrator probably won’t review them before the hearing in any event, and might quietly resent having to lug the exhibit notebooks to the hearing. And, arguably, as the fact finder the arbitrator should not review an exhibit until it is admitted into evidence.

While opposing lawyers are always encouraged to coordinate their exhibits so as to avoid duplication, that suggestion sounds better in theory than it works in practice. If it turns out that claimant and respondent have the same exhibit in their notebooks, once the hearing is underway respondent should not be reluctant to use claimant's exhibit, rather than having the same exhibit with two different numbers in play.

FORMALITIES (BOTH)
Don't be shy about asking the arbitrator if she would like to be called "Ms. Arbitrator," or "Ms. [last name]."

Don’t hesitate to try interacting with the arbitrator as the hearing proceeds. Invite questions. Ask if a point has been sufficiently made. If you don’t invite input you might be losing a key opportunity to find out how you are doing. If the arbitrator doesn’t entertain such interaction, he’ll let you know.

EXCLUDING WITNESSES (BOTH)
Most arbitrators will exclude witnesses on a party’s motion. (Some rules give no discretion.) Consider whether protecting your client's interests requires that witnesses be excluded. Some hearings can be considerably shortened if basic groundwork does not need to be laid anew with each witness.

OPENING STATEMENT (BOTH)
It’s the rare arbitration where an opening statement of more than 10 or15 minutes is warranted. Five minutes is often enough.

Claimant should not waive opening argument without getting an agreement that respondent will do the same. Beginning the presentation of evidence after the arbitrator has heard only respondent’s opening statement can start claimant out in a little bit of a hole. And it can cause some tension between claimant’s lawyer and his client, who might be wondering why only respondent’s case was laid out for the arbitrator.

If you have visual aids (see Presentation of Evidence, below), consider using them. If not already disclosed pre-hearing as exhibits, show them to opposing counsel before the hearing begins.

OBJECTIONS (BOTH)
Objections are properly directed to the arbitrator, not opposing counsel. Dialogue between counsel should be no more extensive, and no more confrontational, than would be acceptable in the courtroom. Do not treat the arbitration hearing like you are in a deposition.

While the rules of evidence are relaxed, if existent, during an arbitration hearing, that does not mean all objections are futile. Those arbitrators who are reluctant to interrupt the presentation of evidence are sometimes grateful for, and gladly sustain, objections to sloppy or improper questioning. The arbitrator's reaction to such objections should be sufficient to indicate if they are appreciated.

PRESENTATION OF EVIDENCE (BOTH)
An arbitration hearing is basically a court trial held in a conference room. Most trial practice tips and “how to” guides are equally applicable.

The arbitrator is new to the facts that you’ve been internalizing for months. Without shortcutting what you need to prove, simplify, summarize and show (as opposed to tell). In addition to photographs, consider supplementing the testimony with a time line, an organizational chart, blow ups with key language highlighted, videos of the scene, summaries (with supporting back up at hand), and whatever else helps transport the key information from your banker’s box of documents and the witnesses’ testimony into the arbitrator’s mind and memory.

REMEDIES (PRIVATE)
In fashioning and presenting the claimant's requested remedies, be it in the statement of claim, as flushed out in the pre-hearing memorandum, or at the hearing itself, claimant's counsel should be mindful that remedies available in private arbitration are not limited to those available in the trial court:

- Rule 30 of the Arbitration Service of Portland Arbitration Rules provides that "the arbitrator(s) may grant any relief or remedy deemed by the arbitrator(s) to be just and equitable and which is within the scope of the agreement of the parties, …."

-American Arbitration Association Commercial Arbitration Rule R-43(a) provides "The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of the agreement of the parties, …"

-The Uniform Arbitration Act provides that "As to all remedies [other than punitive damages and attorney fees], an arbitrator may order such remedies as the arbitrator considers just and appropriate under the circumstances of the arbitration proceeding. The fact that such a remedy could not or would not be granted by the court is not a ground for refusing to confirm an award … or for vacating an award …." ORS 36.695(3).

Point: Be careful how you go about suggesting that the arbitrator need not abide by authorities that would be binding on a trial judge. That might be interpreted as a concession as to the merits of your case.

Counter point: Whatever the theory of the case, don’t be reluctant to put some (justified) emotion into it. Arbitrators approach cases more like jurors than many think.

CLOSING ARGUMENT (PRIVATE)
As the hearing progresses, get a reading as best you can from the arbitrator as to whether closing arguments will be presented orally or in writing, and make your preference known. Unless you sense that the arbitrator needs to be turned around on a make or break issue, and you can accomplish that only in writing, oral arguments bring the arbitration presentation to conclusion more efficiently, economically and timely.

FORM OF AWARD (PRIVATE)
A simple case might not call for an award that sets out the arbitrator's reasoning. In most cases, counsel and their clients seem to be willing to absorb the increased cost associated with a written (also known as a “reasoned”) award, in which the arbitrator explains the bases for his or her conclusions. One school of thought is that the arbitrator is more apt to reach the correct conclusion if he or she has to work through the evidence and law in the process of writing a reasoned decision.

If you have a preference, make it known.

ATTORNEY FEES (BOTH)
As has long been the case in federal court, and is now seen more frequently in circuit court, parties objecting to attorney fee applications in arbitration are sometimes challenging fee petitions that are supported by time sheets that use "block billing," i.e., one time entry ascribed to multiple tasks collected into one “block” on the time sheet. The argument is that the arbitrator cannot tell if the time spent on a specific task was reasonable if that task is lumped together with others, all of which are assigned just one amount of time. The solution is to write down the amount of time devoted to each task.

APPEAL (PRIVATE)
In private arbitration, practically speaking, there is no appeal. Make sure your client appreciates that going in.

© Law Office of Charles E. Corrigan, P.C.

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