Lawyer’s Advocacy in Arbitrations - Top 10 Horrible, Terrible, No Good Mistakes Lawyers Make: No. 10 through No. 6
There’s a great argument that lawyer advocacy in an arbitration is more essential than at a trial in court. This is the last post of the 10 most horrible, terrible, no good, “bang your head against the door” mistakes that I have seen lawyers make in arbitrations, both when I served as counsel and as an arbitrator. Agreeing to arbitrate a dispute, whether in a contract or by agreement, is a serious decision for any business. There are pros and cons to binding arbitration versus trial in a court that go beyond a series of blog posts, but the fact is that when a dispute is arbitrated, finality is the rule. It is very difficult to appeal an arbitration award. In many instances, representing a party in an arbitration requires more due diligence and work than a trial. Great “arbitration” lawyering is therefore essential but… sometimes does not happen.
No. 10: Not Looking for Ways to Make Your Arbitrator Happy at the End of a Hearing
Prior to the time that the proof in an arbitration is formally “closed” and you pack up your bankers boxes and thank the arbitrator (and are gracious to your adversary), think through how you can help the arbitrator make a well-informed award. Especially with an arbitration where there are scores of claims (such as change orders, each of which may be factually complicated) and defenses, remember that while you may have lived with the dispute for years, the arbitrator only has her notes and the (many times) voluminous exhibit books. Depending on your working relationship with opposing counsel, they have the same general goal when the hearing ends: Make sure the arbitrator understands each sides’ claims and defenses.
Therefore, be creative. Would post-hearing “summaries” that link up specific issues or claims to witnesses and exhibits be helpful, even if you work with opposing counsel to do so? If there are claims for the recovery of legal fees (such as who is the “prevailing party”) and allocation of arbitration costs (which can be significant and include the arbitrator’s compensation), while you should have determined prior to the hearing how the arbitrator wants to handle such claims, ask for direction. Are your damages clear and unambiguous and have they remained unchanged from when the hearing began? Many times, during the hearing, claims and defenses are modified/revised/withdrawn. What about proposing the submittal of a Word document or Excel spreadsheet that lists the claims and amounts sought with a blank space for what will be awarded on that claim? Most arbitrators want to and will address every “claim” in the written award and want to be 100% clear on the relief sought.
While most arbitrators do not want formal post-hearing briefs that address every single issue, it may help to offer to submit a short and to-the-point summary of your damages. Sometimes there are pure legal (such as contract clause interpretation) issues that were raised for the first time in the hearing. If you are unclear or unsure that the arbitrator understands your position on such issues, offer to submit a short memorandum or even an email. Do remember that whatever is submitted (under most arbitration rules) the time frame for the issuance of an award (typically 30 days from the close of the hearing) does not formally begin until all “post-hearing” filings have been submitted.
The bottom line is this: If you were the arbitrator, what would you want from counsel to make your final decisions and the award easier to write? Especially in a dispute where there may be scores of issues and claims, any post-hearing efforts or offers to the arbitrator to make her job easier will win you brownie points; hopefully increase your and your client’s credibility; and will pay off in the final result.
Finally, since this is the last of the top 10 posts, thank you for all of the great feedback I have received from readers all over the country, including a number of suggestions and recommendations from full-time arbitrators. One suggestion I recently implemented in an arbitration where I served as counsel was well received by the arbitration panel. For the 10 jointly created exhibit books, instead of putting them all in typical black binders, we used different color binders for each book. It saved time for all involved by being able to ask a witness or the panel arbitrator to turn to the “green” binder.
No. 9: Not Being Creative with Proof and Witnesses
In a typical trial, the plaintiff goes first with witnesses followed by the defendant’s witnesses. There may be multiple parties and claims, and the trial can stretch out over many days. Key witnesses or experts could testify on day one, and the witnesses (including experts) who rebut that testimony on those issues may not testify until days later. The judge’s schedule may also dictate trial time and scheduling. Witnesses will not normally be taken “out of turn” regardless of their circumstances. The result may be testimony on claims one, three, and five on the first day of trial, while the rebuttal witnesses may not provide testimony until days later. Whether in front of a judge or jury, this lack of continuity of witnesses can cause confusion, especially when there is no trial transcript for a judge or jury to review. They have to rely on notes (if allowed to a jury) and/or pure memory.
While in arbitration hearings arbitrators face some of these same continuity issues, this is where the more informal nature of arbitration can be a real advantage. It may be harder for the arbitrators to review the testimony than a judge. Keeping this in mind, be intentional about the order of presentation of your witnesses. In arbitration, you are likely to have more flexibility with the order of witnesses and the hours made available for the presentation of evidence. Always remember that the arbitrator is being fed facts and arguments through a fire hose and is relying only on notes taken while a witness is testifying, as well as (typically) volumes of exhibit books chock full of exhibits. Therefore, put on your thinking hat. Arrange the exhibit books and include separate “claims/issues” sections for easy access, not just for the arbitrator but for you and your witnesses’ preparation. Arbitrators appreciate any effort or suggestion to narrow down issues and claims and present all evidence on a specific claim at the same time. Creativity with how issues, witnesses, and claims are presented is the key. Zoom and telephone testimony can be arranged (remember the rules of evidence do not apply). You can suggest what’s called “hot boxing” and propose having key witnesses from both sides testify back to back on key issues. For experts, consider having them present their opinions one at a time, or even at the same time, by going back and forth answering questions from all counsel and the arbitrator. Especially in a dispute where there may be scores of issues and claims, your efforts to make sure the arbitrator’s job is easier will pay off in the final result.
No. 8: Get the Hearing Exhibits Right
While arbitrations are less formal than trials, and the rules of evidence normally do not apply, there are still “paper” exhibits to be introduced through sworn testimony. There can be arbitrations where all exhibits are electronically scanned and pulled up via laptops by all involved, but most of the time exhibits are copied and placed into multiple exhibit books prepared by counsel. Typically, the scheduling order issued by the arbitrator has pre-hearing deadlines for the exchange of all proposed hearing exhibits. Exhibit books are then created, and on the day of the hearing both sides show up with their own set of exhibit books. But this process of each side bringing their own exhibit books is a mistake. It can cause confusion at the hearing because many times there are identical material exhibits that have different exhibit “numbers,” and counsel, the witness and especially the arbitrator are looking around to find the right exhibit book. Why does the “contract” at issue or key letters or emails have to be Exhibit 24 in one side’s exhibit book, but Exhibit 43 in the other side’s exhibit book?
The best way to handle this (and many arbitrators mandate this in the scheduling order) is to have counsel first exchange a “list” of proposed exhibits and then work together (in good faith) to create a “joint” set of exhibit books. There should be an index that can include not just exhibits, but tabs for pre-hearing briefs, summaries of damages, and pictures. A joint exhibit set allows everyone to “sing from the same song sheet” and save time. It is also extremely helpful for counsel to know all of the exhibit numbers in advance to prepare for direct and cross-examination, as well as preparing witnesses.
Other mistakes to avoid in exhibit book preparation and presentation include:
If the arbitration is document-intensive and there will be multiple exhibit books, use “binders” that are easy to open and close and try not have so many exhibits jammed into one binder, which can make a binder unwieldy. Err on the side of making more exhibit books.
Include an index and exhibit list by exhibit number for easy reference, and especially include the dates for emails and letters. This can include exhibits separated by issues, years or even months.
If there are not “bates” numbers on each page of each exhibit, for exhibits that have multiple pages, such as pictures (which should always be dated), number each page. There is nothing more frustrating to an arbitrator (and witness) than the questioning lawyer asking about a specific document that is “about ¼ of the way in” or around “18 pages from the back,” and delays ensue while everyone scrambles to find that specific document.
Include some blank exhibit tabs that are numbered, since many times there can be exhibits added during the hearing, such as summaries, demonstrative exhibits, or even post-hearing added exhibits.
Be sure that at the end of any hearing, when all of the proof has been presented, that all parties, and especially the arbitrator, are on the same page about all exhibits, especially if exhibits have been added. Sometimes there are proposed exhibits that ended up not being used by either side. Consider if those unused exhibits should be removed altogether from the arbitrator’s set.
No. 7: HEY! Pay Attention to Your Arbitrator.
All “trial” lawyers are taught early in their career to pay attention during a trial to the judge and the jury during witness testimony. How are they reacting to a witness or lawyer? Are they shaking their heads yes or no, nodding off (it can happen), suppressing a laugh or scowl, paying attention, or even rolling their eyes? These reactions can be invaluable to lawyers. It is difficult to gain such insight while you are questioning a witness. Many times, the questioning lawyer will ask a client or co-counsel to watch for any tell-tale reactions. This in-trial strategy is also helped immensely by the way a typical courtroom is set up: separate counsel tables facing a judge who is sitting up high; a jury on one side of the courtroom; and a witness “box” to the side of the judge. In a very large courtroom, counsel tables may be five or even 10 yards away from the bench and witness. Lawyers sometimes are also tied to a podium. A lawyer can then, pretty easily, without being too obvious, observe any reactions, whispers to co-counsel, or notes that are passed.
But an arbitration is different — mainly because of the hearing location and setup. Most hearings take place in a conference room, which can be of varying sizes. There can be a panel of three arbitrators with counsel for the parties facing each other. There may not be more than a few feet between the lawyers and the arbitrator and witness. Witnesses may not be facing the arbitrator but may be sitting on one side of the conference room table. It is therefore not as easy as being in “court” to gauge how a witness is doing or what impact, good or bad, a witness is having on the arbitrator. While most arbitrators attempt to remain stoic even during the worst of witnesses (and lawyers), they (we) are in fact human. All too often, while serving as counsel in an arbitration, I have seen significant reactions or “tells” from an arbitrator indicating whether the arbitrator is really paying attention. Is the arbitrator furiously taking notes, plugging away on a laptop, or looking at a thick exhibit book reading an exhibit that is not even being discussed by the witness? I have also, as an arbitrator, been amazed when lawyers plow through testimony and often move on to new exhibits when it is obvious that I am writing notes, not looking at the referenced exhibit, or even trying to get to the referenced exhibit. I may then tell the lawyer to “hold up” and let me “catch up,” but that should not happen.
In a word, when an arbitration award is binding and almost impossible to appeal, PAY ATTENTION TO YOUR ARBITRATOR!
What are some tips you can follow as a lawyer to make sure that you have the best “vantage point” to observe both the arbitrator and any witness?
If at all possible, early on (in the initial conference call when the hearings are set) offer to “host” the hearing at your office (if that’s the city where the hearings will take place). Many times, arbitrators do not have large offices with comfortable conference rooms with amenities. That allows you to control what room to use, how it is set up, and provides ease of convenience for you and your clients to hold the hearings on your home base.
If the hearing is in not in a city where the lawyers/clients/arbitrators live, be the first to offer to find a hearing location.
If you are not hosting, visit the conference room days before the hearings begin and see what makes sense for the set-up.
Most importantly, find out when the hearing location opens and get there as early as you can on the first day: Beat the other side there. You can choose the best side of the table (plunk down your exhibit books) and try to designate where the witnesses and the arbitrator will sit (again, plunk down the witness and arbitrator set of exhibits where you want them).
Finally, just like you would do in court ‑‑ without trying to be too obvious — observe the arbitrator or have one of your colleagues do so, especially during testimony. You may very well pick up valuable tips that may change or alter your strategy and enhance your ability to come out with a favorable ruling.
No. 6: Not Treating Your Arbitrator Like Santa
It is the time of the year for ALL good lawyers to clean up their act because Santa is coming. This same type of thought that goes into “being good” should factor into how you treat the arbitrator who will issue an award that either results in coal or a lip-smacking candy cane being placed in your law firm stocking hung snugly by your desk. Should Santa’s cookies and milk be put on the mantle near the fireplace for easy access (or maybe for a hungry elf) or out of his immediate reach? Of course not, says Rudolf the partner. A serious mistake I see, while both acting as an arbitrator or counsel, is when lawyers do not treat the arbitrator like a judge and do not think through how they can make things “easier” for the arbitrator. All those nuances we were taught as young “trial lawyers,” by our mentors, on treating judges with kid snow mittens, for some reason, go out of the decorated and frosted office window in an arbitration.
On the front end of an arbitration, try to find out from colleagues how the arbitrator likes to handle pre-hearing conferences and plan accordingly. Can you get your hands on a scheduling order previously issues by the arbitrator, revise it, and present it prior to the conference in a nicely wrapped package? On discovery disputes, arbitrators hate those as much (or even more) than judges (like Santa hates narrow chimneys). Go out of your way, just like you do in court, to resolve such disputes in good faith before taking them to the arbitrator. Do NOT think that somehow presenting a discovery dispute months before the hearing will somehow “educate” the arbitrator; it will not. Most arbitrators go into a hearing with a clean slate and base decisions on what’s presented, just like even bad girls and boys start out on the nice list with Santa on December 26th of each year.
Prior to the hearing, work with the other side as much as possible to put together a joint set of exhibit books that can be used by counsel, all witnesses, and the arbitrator so everyone has the same caroler song sheet. Bates or number the pages of exhibits that have multiple pages for easy reference. Needless time is wasted when lawyers have to say “well, this picture of the failed retaining wall near Santa’s workshop is about three-fourths of the way” in a 100-page exhibit full of pictures. Arbitrators also hate it when both sides come in with their own set of exhibit books when 80% of the exhibits in both sets are exactly the same. Along that same vein, create multiple volumes. Don’t use 12-inch-deep volumes with scores of exhibits that are hard to open and close. Again, Santa likes to have his milk and cookies close by and easy to access with no fuss. Would you wrap up his cookies in hard to open bags? Mrs. Claus would say no.
Before the hearings close, think about how to best make the arbitrator’s post-hearing analysis easier. Santa does not want to read through a long letter about what all went wrong with you in 2020. He wants to know what’s on your award “wish list” to be left under the “award tree,” which is hopefully decorated with paid client 2020 invoices. What the arbitrator wants is a short and concise summary of what relief you are seeking. Propose to submit a damages or key issue summary with a list of the exhibits that support your positions and claims. If legal fees are being considered, ask what process works best for the arbitrator. While most arbitrators do not need or want extensive post-hearing briefs, there may be one or two issues upon which the arbitrator may want a short and concise brief. And you can provide that additional, steaming cup of “hot claim chocolate” when your Santa sits down before ascending into the air to decide how he has to make someone happy and someone sad.
What you and your client do not want is to — as the Grammy winning song goes — “get run over by a reindeer” in any final award. All these holiday nuggets of wisdom cannot change your facts or make your witnesses more credible. But, you don’t want to mess around with Santa or give your arbitrator a reason to hesitate when she opens up and reaches into her big red “award bag” and provides you with an award treat that will hopefully be delicious and go down easy with you and your client.