The preliminary hearing presents the first and best opportunity
for the parties, their counsel and the arbitrator to design a
process for the arbitration that will effectively meet the needs of
the parties. I have had quite a diverse range of experiences with
preliminary hearings, both as counsel and as arbitrator. The best
of them have involved creative efforts to make use of the
flexibility of arbitration in order to achieve the objective of a
speedy, fair and just process. Here are some suggestions for
getting the most out of the critical preliminary hearing.
Prepare an agenda and stipulations with opposing
counsel. Arbitrators and arbitral institutions commonly
circulate checklists for the preliminary hearing, for instance,
Section P-1 of the AAA Commercial Arbitration Rules and Rule 16 of
JAMS Comprehensive Arbitration Rules and Procedures. Counsel should
confer on the items set forth on such lists and prepare
stipulations as to all uncontested matters, such as which
arbitration rules, procedural law and substantive law governs. Use
the process to identify areas of disagreement and special matters
that should be brought to the attention of the arbitrator at the
preliminary hearing. Finally, counsel should try to agree on a
proposed schedule for all events up to and including the merits
hearing. Get the joint filing to the arbitrator as soon as
possible, although it will surely be appreciated if it is received
any time before the preliminary hearing.
Have your client attend the preliminary
hearing. The parties, who are the stakeholders in the
arbitration, usually do not participate in the preliminary hearing.
This is a lost opportunity. The preliminary hearing gives parties
the chance to hear arguments, comments and questions directly from
opposing counsel and the arbitrator. It is likely to give them a
better understanding of the personalities involved, the true issues
in dispute, the potential range of costs and benefits of pursuing
the arbitration through to an award, the prospects for settlement
and what an acceptable settlement might involve.
Request that the preliminary hearing be conducted
in-person. Preliminary hearings are most commonly held in
a conference call. Conference calls are an efficient method of
communication; they minimize the participants' time commitments and
they are relatively easy to schedule. But a great deal may be
gained when all of the participants in an arbitration meet
together, face to face, at the outset of the process. Such meetings
may facilitate an informal, though in-depth, exchange to enable the
participants to learn about the personalities of all concerned, the
background of the dispute, the parties' respective positions on the
merits, and their vital interests in a resolution. A face-to-face
meeting may facilitate an early discussion regarding mediation or
settlement. Moreover, it is likely that the parties, and perhaps
counsel, have not had any prior dealings with the arbitrator. I
suggest that counsel should seize upon the opportunity to make a
persuasive first impression of her client's case - in person.
Focus on advocacy and educating the arbitrator.
The arbitrator will have read the papers but will still be new to
the facts and may not know what law is applicable. Be prepared to
give a very short, clear and persuasive précis of your case.
Include counsel presentations as an agenda item in the joint
filing.
Consider bifurcation of the proceedings. It is
often beneficial, particularly in complex disputes with multiple
theories of liability and large potential damages, to structure the
arbitration in liability and damages phases. The questions of
liability may involve discrete areas of limited discovery and a
focused merits hearing. A determination of liability will often
eliminate grave uncertainties and facilitate a mediation or
settlement on damages. If counsel believes that bifurcation is
appropriate, seek agreement with opposing counsel before the
preliminary hearing. If agreement cannot be reached, alert the
arbitrator to your client's interest in discussing bifurcation at
the preliminary hearing. In a complex case, the arbitrator may wish
to set a briefing schedule for a motion to bifurcate as the first
order of business.
Reserve a realistic number of days for the merits
hearing and empower the arbitrator to manage for completion in the
allotted time. One of the great comparative advantages of
arbitration is the ability to secure a firm date for the merits
hearing at the preliminary conference. Counsel should be able to
reach an agreement in advance of the preliminary hearing regarding
a realistic number of days for the merits hearing and also have a
mutual understanding about how firm those number of days should be.
If counsel shares an expectation that the arbitration should be
completed in a certain number of days, barring unexpected
developments, that expectation should be communicated to the
arbitrator with the request that the proceedings be managed
accordingly.
Plan for peace. A very large percentage of
cases settle, as every experienced lawyer has learned first-hand.
Mediation of the claims in arbitration should be on the table in
early discussions with opposing counsel and at the preliminary
hearing. It is important to identify the impediments, if any, to
immediate mediation and the avoidance of the expenses of
arbitration. If a party believes that more information is required
before it would be possible to conduct a successful mediation, the
parties should explore exchanging that information on an expedited
basis. The parties should explore whether it would be more
advantageous to stay the arbitration pending the conclusion of the
mediation or to proceed with both arbitration and mediation on
parallel tracks.