ACResolution Magazine

As in litigation, parties and their counsel may seek to delay the process and impose unnecessary costs on their adversaries through lack of compliance with the rules and applicable arbitrator orders, or by attempting to add new or different claims at a late date. The newly revised rules clarify the authority of the arbitrator to control the filing of new claims and to sanction such conduct. Rule 58 now specifically provides for the availability of issue or claim preclusion after notice and hearing. This is especially significant in a process that does not provide for appeals. Similarly, the arbitrator is empowered to allocate administrative fees, witness and other expenses, and arbitrator compensation in the award.

USE OF MEDIATION TECHNIQUES

Short of using her authority, an arbitrator can use some mediation techniques to provide a process that is more customized to the needs and interests of the parties.1 Such techniques include:

1. As suggested above, during the preliminary hearing, inviting input from the parties in identifying various process issues to be decided under a “fair and efficient” standard by the arbitrator.

2. Asking clarifying questions to understand the parties’ positions and interests, which shows the arbitrator’s investment in and commitment to the process and thus increases the parties’ engagement in and commitment to the process, and their trust in the arbitrator.

3. Asking probing questions to reality test the parties’ positions in the hope of moving them off their positions, such as this one: “So, how long will it take if each side, as you have agreed, takes six depositions?”

4. Using paraphrasing or restatement to confirm not only the arbitrator’s but also the parties’ understanding of what has been said by another party. When parties are unable to hear what their adversary has to say, the arbitrator can paraphrase the statement in a way that will be heard by all the parties.

Once what the parties really want comes to the fore after skillful use of the foregoing techniques, the arbitrator can reframe the parties’ demands/interests as a mutual problem. For example:

“Counsel A, how can we meet your need to have Mr. Brown testify at the evidentiary hearing, while at the same time, Counsel B, recognize that Mr. Brown’s schedule will not permit him to attend the hearing on the days already scheduled?”

When a process issue is presented to parties and their counsel as a mutual problem, they tend to become problem solvers, leaving behind, momentarily at least, their roles as adversaries. If parties and their counsel are given the opportunity to successfully negotiate and come to an agreement with the help of the arbitrator on procedural issues, they may be more likely to settle their substantive dispute.

Lastly, arbitrators can check in with the parties and their counsel from to time to confirm what they have agreed upon. The more agreements reached, the more likely it is that the parties will feel optimism in and satisfaction with the process.

CONCLUSION

Although parties have the freedom to fashion their own arbitration process, there are a variety of reasons that the clauses they draft turn out to be less than optimal. The arbitrator can, and often should, intercede at the preliminary conference to focus the parties on how to structure the process to ensure that it is fair and economical.

1While we suggest the use of these mediation techniques with respect to procedural issues, arbitration remains distinct from mediation in that the parties are not final decision-makers, and ex parte communications (private caucuses) are not permitted.