While there are several ways to resolve disputes outside of court, arbitration is the most commonly used alternative, with a significant number of cases (somewhere between 60–90% depending on the type of case) being settled through an arbitrator instead of a judge.
The arbitration process is largely considered less formal than a trial, with liberalized rules concerning discovery and evidence. These relaxed requirements present a unique opportunity for expert witnesses. When presenting an arbitration case, experts can be utilized in various ways to ensure a swift and favorable outcome.
What Exactly is Arbitration?
Arbitration is a specific type of alternative dispute resolution during which a non-judicial third party listens to the case presented by both parties and renders a decision. Arbitrations can be either binding—meaning that the judgment can be enforced in a court of law—or non-binding, which enables the parties to still proceed to trial after the arbitrator’s ruling. Likewise, arbitrations may commence electively by the choice of the parties, or be ordered contractually (i.e., an arbitration clause in a contract).
Arbitration may be preferential to trial as a cost- and time-saving measure. It is also actively promoted by judges, who tend to encourage settlements in lieu of trial as a means of decreasing their often clogged dockets. Although specific settlement techniques vary widely throughout the United States, since 1983, Congress has enacted several laws that “explicitly authorize settlement participation by the judiciary,” thereby motivating, if not outright mandating, the judicial promotion of dispute resolutions. In 1998, Congress passed the Alternative Dispute Resolution Act, which mandated that federal courts implement ADR programs and appoint judicial officers to supervise such procedures in court.
The Pros and Cons of Arbitration
There are both benefits and drawbacks to using arbitration. First and foremost, arbitration can save money, time, and resources of the litigants and the attorneys by facilitating an outcome more expeditiously and cost-effectively than trial. However, the arbitration is not without its critics. Some forced arbitration clauses can place a plaintiff at a disadvantage in that they lose their right to litigate in court. Aimed at protecting consumers, employees, and small businesses, the Forced Arbitration Injustice Repeal Act (FAIR Act) seeks to nullify mandatory arbitration agreements and class-action waivers for employment, consumer protection, antitrust, and civil rights matters. Proponents of the bill, which was passed in the House and is pending before the Senate, argues that such agreements deny individuals their Constitutional right to a trial. Without the bill’s passage, mandatory arbitration clauses will likely continue—with over half of non-union employees required to go through arbitration with their employer instead of proceeding to trial. The prevalence of mandatory arbitration clauses—regardless of their merits or disadvantages—is another factor that will contribute to the importance of arbitration proceedings. If arbitrations continue to remain a pertinent part of the judicial system, it is all the more important to present one’s case as thoroughly as possible. And like any complex case, sometimes an expert is needed to succeed.
Consulting with Experts Before Arbitration
Regardless of whether an expert will be called as a testimonial witness, consulting with an expert witness prior to arbitration is a prudent practice. Experts can evaluate a claim’s strengths and weaknesses and forecast any issues that could potentially arise. Although an expert consultant’s work product is generally not discoverable at trial, the anonymity experts once enjoyed has been chipped away by certain courts that have allowed the discovery of consultants’ identities. During the arbitration process, however, consultants may remain anonymous, assisting with any and all aspects of the pre-arbitration process.
Relaxed Disclosure Obligations
Generally, each jurisdiction has its own disclosure requirements concerning expert testimony. Specifically, for example, Rule 26 of the Federal Rules of Civil Procedure and Rule 16 of the Federal Rules of Criminal Procedure require that experts provide a written report of their anticipated testimony, including the basis on which the opinion relies. Experts must also disclose facts or data considered by the witness, any exhibits they intend to use, the witness’s qualifications, a list of other cases in which they testified, and a statement regarding their compensation for testifying. In essence, most communications and work products between the expert and attorney can be discoverable. Overall, the disclosure requirements can be quite onerous, however, arbitration is not bound by these procedural rules. When utilizing an expert during arbitration, communications can be made more freely, and work products can be disseminated more liberally, without concern that the opposing party can view it.
Using Evidence to Form an Expert Opinion
Likewise, arbitration permits experts to rely on an array of evidence to form their opinions. This is because experts are typically not constrained by the same procedural rules limiting materials on which their opinions can and cannot rely. For example, Rule 703 of the Federal Rules of Evidence governs the types of evidence on which an expert’s opinion may rely. Although it allows consideration of any facts or data that an expert in that particular field would rely upon, Rule 703 typically prohibits the admissibility of facts that would otherwise be inadmissible under other evidentiary rules, unless “their probative value in helping the jury evaluate the opinion substantially outweighs their prejudicial effect.” This rule tends to circumscribe the amount and type of information that an expert can use.
At arbitration, however, experts may rely upon any evidence that can help them render an opinion, even if it constitutes hearsay or another form of inadmissible evidence. Overall, the inapplicability of evidentiary rules at arbitration permits a broader inspection of the facts at issue.
Freedom From Daubert and Frye Requirements
When admitting expert testimony at trial, the expert must meet certain evidentiary requirements set forth in the jurisdiction’s applicable statutes and case law. Most jurisdictions follow the standards (or some variation thereof) set forth in either of the two seminal cases, Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) or Frye v. United States, 293 F. 1013 (D.C. Cir. 1923). These standards, while different, both set forth relatively strict requirements for admissible expert testimony. During arbitration, however, these evidentiary standards do not apply. As a result, the admission of expert testimony is quite flexible. Particularly, it allows the presentation of expert opinion that might be considered novel or not yet accepted within the scientific community, since such testimony runs the risk of being excluded on such a basis under both Daubert and Frye.
Using an Expert to Effectively Present Your Arbitration Case
Lastly, one of the biggest benefits of presenting expert testimony at arbitration is that the arbiter is likely an expert in their own rights. Unlike judges, who are responsible for handling an array of subject matter in their caseloads, arbiters are typically assigned to cases within their field of expertise. For example, a former intellectual property attorney may hear trademark infringement cases, or a personal injury attorney may hear car accident cases. This enables the expert to speak their own “language” and gives them a step up in presenting their opinions.
Unlike presenting testimony to a judge or jury, an expert during arbitration may not need to translate their opinions in layman’s terms. Also, because of its less formal procedure, an arbiter may freely ask questions of the expert. This creates an environment where both the expert and arbiter can communicate freely without consideration for the typical comprehension issues that arise when presenting a case to a jury.
Overall, arbitration is a prevalent part of alternative dispute resolution, and it is a far more likely litigation setting than a court. Although its procedures may be different, arbitration and trial share the same objective—to utilize witnesses and testimony that will increase the likelihood of a favorable outcome.