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ADR: What If There Are No Rules?

In this day and age of Alternative Dispute Resolution (ADR), lawyers and their clients find themselves thrown, voluntarily by their agreements, or involuntarily by court order, into arbitration which becomes the forum for resolving the dispute.  Lawyers, trained and accustomed to the rules of civil procedure, rules of evidence, and rules of court are comfortable in advising their clients as to procedure, scheduling, and even the potential uses of depositions or other testimony taken outside the presence of the judge.  But those rules don’t necessarily apply with any rigid consistency in arbitration.  For example, the American Arbitration Association (AAA) provides rules for the commencement of arbitration, selection of arbitrators, payment of fees, and the decisions or awards, but not necessarily with respect to evidence or procedure, for example, R-31 provides:

(a)    The parties may offer such evidence as is relevant and material to the dispute and shall produce such evidence as the arbitrator may deem necessary to an understanding and determination of the dispute. Conformity to legal rules of evidence shall not be necessary. All evidence shall be taken in the presence of all of the arbitrators and all of the parties, except where any of the parties is absent, in default or has waived the right to be present.

(b)   The arbitrator shall determine the admissibility, relevance, and materiality of the evidence offered and may exclude evidence deemed by the arbitrator to be cumulative or irrelevant.

(c)    The arbitrator shall take into account applicable principles of legal privilege, such as those involving the confidentiality of communications between a lawyer and client.

(d)   An arbitrator or other person authorized by law to subpoena witnesses or documents may do so upon the request of any party or independently.

There are no proscribed rules for the taking of depositions or their permissible use at the arbitration hearing.  All of that is left up to the discretion of the arbitrators or agreement of the parties.

Given arbitrators’ apparent proclivity to admit virtually all tendered evidence “for what it’s worth,” even given obvious hearsay or foundational problems, there may not be much that a practitioner can do to control what is ultimately “heard” by the arbitrators.  But the practitioner can and should point out the weaknesses in the source of the offered testimony, perhaps eroding its impact and ultimate influence, by strategical requests that the panel “note for the record” the evidentiary objections, making cogent but “speaking” objections to the proffered evidence.  Moreover, by negotiation and agreement with opposing counsel, or requesting a preliminary ruling from the panel, the practitioner can develop and utilize, with a little more certainty, testimony taken outside the presence of the arbitrators.

William R. O'Bryan, Jr.