This article was first published in the American Bar Association’s The Franchise Lawyer, Summer 2022.
You may recall Shakespeare’s line from Henry VI, Part 2, Act IV, Scene 2, spoken by the noted legal scholar Dick the Butcher, “the first thing we do, let’s kill all the lawyers.” If we’re talking about fixing arbitration, lawyers aren’t the problem. They’re the solution if they keep a few things in mind. So, to take another page from the Great Bard, here are the 10 Things an Arbitrator Hates About Arbitration, starting with No. 1.
- Efficiency, economy and finality are the keystones of a successful arbitration. Without each of these elements solidly in place, arbitration as a method of dispute resolution suffers. The more a lawyer tries to make arbitration into something it is not — a trial — the less likely it will be efficient, economical or final, and the result may unduly influence perception of arbitration as an experience. Too often, arbitrating lawyers see an award that did not go their way as a referendum on arbitration and not as a judgment of the merits of the legal positions asserted. So, I hate it when lawyers deny the weaknesses of their own cases and blame the system their client has chosen for the award they receive.
- Lawyers sometimes forget that they can change the arbitration clause that their transactional colleagues wrote/copied/did not really think about years ago when the contract was written. Yes, arbitration is a matter of agreement but that doesn’t require blind adherence to the clause that you’ve inherited. If it doesn’t suit your purposes when the dispute arises, reach out to your arbitration provider and opposing counsel and discuss what you need today to put your case on. Arbitration service providers are open and willing to help parties adjust their arbitration clauses upon joint request. If the clause is a problem to you, it is likely a problem to your opponent as well.
- While you are thinking about ways to improve how your client’s dispute gets resolved, consider talking with opposing counsel about agreeing on requirements for arbitrator qualifications, discovery, remote witnesses, venue, time frame, arbitral service provider and anything else you both agree upon. Memorialize your bespoke arbitration clause and go to work with the roadmap you’ve drawn, not the one your transactional colleagues (who, by the way, have never tried an arbitration or anything else for that matter) thought was exhaustive of all possible procedural and substantive routes, detours and scenic overlooks along the road to resolution. I hate it when lawyers accept the hand they have been dealt (for example, an arbitration clause that names an arbitration provider that’s been out of business for 20 years) and do not work to improve it.
- When I see an arbitration clause that seeks to recreate litigation by the importing of judicial procedural and evidentiary rules, including free-ranging discovery, I hate it. This clause shouts, “yes, we agree to arbitrate but only if we can do it according to the Federal Rules of Civil Procedure and Evidence.” This passive-aggressive approach to arbitration has two problems: 1) more likely than not, the arbitrator is not a potted plant and will not let counsel get away with undermining what is supposed to be an efficient and economical system and, 2) neither will your client when they realize that you have jettisoned their expectation of efficiency and economy in favor of your desire to earn your trial lawyer chops.
- As an arbitrating lawyer, unlike a courtroom lawyer, you get to choose the decision-maker, or at least be involved in their selection. At best, you and opposing counsel may cooperate in the selection of an arbitrator that you each respect and has industry experience. At worst, you may reflexively strike everyone on the list of prospective arbitrators you received from the provider except your choice out of fear that your opponent may like someone else on the list. If you follow this latter approach, you are making it more likely that you will not get anyone’s choice because counsels’ respective choices do not overlap. When that happens, you get an arbitrator that no one has selected. So, call counsel to talk over arbitrator qualities that you both want and come to an agreement if you can. You are not limited to potential arbitrators on any list you receive from the provider. You can augment the provider’s list with your own agreed-upon selection with the specialized industry knowledge and experience you want. So, when I hear complaints from a lawyer about an arbitrator who did not know anything about the specialized industry involved in their dispute, I ask the lawyer what they did to cooperate with their opponent to select an arbitrator. When they tell me they did nothing to expand the search or agree upon a selection and instead accepted whatever choice the provider made for them, I hate it.
- Unlike a juror, arbitrators (especially the ones you will select) have gone to law school; have a history of trying cases, both in court and in arbitration; and enjoy the respect of their peers. The panels of reputable dispute resolution providers are not open to everyone who applies. More to the point, not only do arbitrators know what hearsay is, they also know what, if any, weight to give it. Arbitrators also know that one of the few ways an award can be vacated under the Federal Arbitration Act is for a refusal to hear evidence. Please do not get exercised when your arbitrator overrules your hearsay objection — it’s for your own good. The arbitrator will give it the weight it deserves (perhaps, none), and in doing so, will insulate the award winner from having to defend a petition to vacate based on the arbitrator’s refusal to hear evidence. So, I hate it when a lawyer complains that an award did not go their way because the arbitrator allowed hearsay testimony.
- In court, motions to dismiss are de riguer — at a minimum, they slow the process and may even result in the trimming of claims or parties. Not so in arbitration, or at least not as automatically so as in litigation. Reread AAA Commercial Rule R-33 and JAMS Rule 18. Both permit dispositive/summary motions on request and approval of the arbitrator with adequate notice and opportunity to respond for the opposing party. But do not litter your arbitration with overly technical motions that would not abbreviate the proceedings if granted — remember, arbitration is all about economy and efficiency, and pretending that the same tactics that work in litigation will work in arbitration is a mistake that I hate to see lawyers make.
- If you need wide-ranging discovery to prove your case, arbitration is likely not for you — and I hate it when lawyers forget that by agreeing to arbitrate, their client did not empower them to turn over every rock in the discovery garden; the client’s goal was more modest — resolve the dispute with the least possible interruption to its business and in the fastest possible time. When you appear for a preliminary hearing, please do not tell the arbitrator you need five to six depositions when two will do. Limit your discovery requests to what is essential for the arbitrator to understand your case, but be prepared to prove your case from your own documents and from the mouths of your own witnesses.
- Remember that histrionics have no place in arbitration. Be the efficient and prepared professional that your client expects you to be. However extensive (or not) your jury trial experience is, there is no jury in the arbitration room. Your only audience is the one person who is going to decide your case. Appeal to the arbitrator by the correctness of your legal position, and not by groans, moans and stage whispers when things do not go your way. Think of your best self, and make sure that is who you are while trying your case. If you don’t, you’ll hate it.
- Do not forget that just because arbitration has started, it is not too late to settle. Keep the channels of communication open. Arbitration, like a trial, takes unexpected turns. Your service provider will facilitate mediation in the middle of an arbitration. Just ask. And your arbitrator should be happy to accommodate a short recess for you to participate in a settlement conference before another alternative dispute resolution professional. If you do not take advantage of a settlement opportunity, you’ll hate yourself and perhaps the results if the award does not go your way.
So, unlike Dick the Butcher, let’s not kill the lawyers. Instead, let’s help them recognize all the opportunities that arbitration gives them to improve their clients’ and their own experiences of dispute resolution. In the end, perhaps 10 Things I Love About Arbitration will result.
Arthur L. Pressman, FCIArb, is a former franchise litigator and partner at Nixon Peabody LLP, and a present full-time arbitrator, mediator and faculty member at Boston University School of Law. He can be reached at firstname.lastname@example.org.
Shakespeare’s “Taming of the Shrew” is considered the basis for the movie, “10 Things I Hate About You.”2.
Heath Ledger, R.I.P., was the star of said movie.