The ABC's of Arbitration-Part B (Arbitration Proceedings)

The subject of the preceding Brief was the formulation of an agreement for the binding arbitration of disputes. This Brief will consider the arbitration proceedings themselves.

Unless the agreement for arbitration between the parties provides other wise, arbitration proceedings are typically informal. This means the absence of the usual trappings of court proceedings such as voluminous papers, depositions, pretrial motions and hearings, and adherence to formal rules of procedure governing the admissibility of evidence.

Instead, the paperwork usually involves only brief statements of the claims between the parties and possibly of the defenses. Under the "Construction Industry Arbitration Rules" of the American Arbitration Association, an answering statement is permitted but not required. If an answer is not filed, the claim is deemed to be denied by the other party.

Ordinarily, the arbitrator or arbitrators have no contact with the parties or their attorneys until the actual arbitration hearings. Occasionally, how ever, pre-hearing conferences may be held for the purpose of simplifying the issues or attempting to shorten the hearings by advance identification and exchange of proposed exhibits, designations of witnesses and adoption of more specific rules for management of the hearings.

Discovery, such as the taking of depositions and submission of written questions (interrogatories), which are now commonplace in court proceedings, are rare in arbitrations. It is usually only in the event that a witness cannot be available for the arbitration hearings that depositions may be available. The parties may agree to exchange or identify exhibits or witness lists. Without discovery proceedings, the burden is placed on the parties to concentrate efforts on preparing their best case, without fully knowing what their opposition may offer.

Naturally, parties are free to adopt different rules concerning discovery. Some attorneys modify the American Institute of Architects arbitration language by specifically providing for an avenue to compel the production of relevant papers, documents and other things through the utilization of a specific provision of the state rules governing discovery in court proceedings.

Arbitration hearings are generally informal. Rules concerning the admissibility of evidence followed in court proceedings are inapplicable, although arbitrators are not expected to give great weight to hearsay or other evidence which would not be admissible in court. The reason is obvious: court procedures are the result of centuries of legal analysis into what particular kinds of evidence are credible and what types of evidence may not be worthy of consideration.

Hearings are scheduled upon notice to all parties at times mutually convenient to the parties, their attorneys and to the arbitrator(s).

The parties are entitled to be represented by attorneys at arbitration hearings, but need not be. The parties may, in their agreements to arbitrate, contract that neither party will be represented by an attorney in any arbitration proceedings.

The essential ingredient of the arbitration hearing is that all parties be afforded an opportunity to be heard-to have his claims and contentions seriously considered-by a fair and impartial arbitration panel. The arbitrators should adopt an orderly method of proceeding which allows each of the parties to present all of the witnesses, exhibits and arguments they believe necessary to support their positions.

The parties may agree or the arbitrator(s) may, at the conclusion of the hearings, request written position statements or even legal briefs on particular issues involved. The arbitration agreement should provide that the arbitration award is to be rendered within a certain number of days following the closing of the hearing. Imposing deadlines for making decisions is a distinct advantage available in arbitration that is not available in court proceedings-generally because arbitrators do not have over-crowded dockets as do most judges.

Arbitration awards are required to be written but not elaborate. If they sufficiently delineate the award and the resulting obligations of the parties, they are legally sufficient according to most courts. This columnist believes that awards 1n cases involving multiple claims should rule separately with respect to each of the claims presented and, in fairness to the parties, awards should also give a very brief reason for the awards as well.


1 However, in some states those restrictions prohibiting the involvement of attorneys are unenforceable

The arbitration award does not necessarily end the battle. The unsuccessful party may recognize his obligation to obey the award and does. There are isolated instances, however, when unsuccessful parties challenge arbitration awards against them by attempting to prevent court enforcement.

However, the grounds for challenge of arbitration awards are strictly limited to circumstances where, because of corruption, fraud or other serious cause, a party was denied a fair hearing by impartial arbitration.

The next Brief in this trilogy on arbitration will deal with the third phase of arbitration-enforcement and collection.