Drafting an Arbitration Clause that Works
Transcript of Drafting an Arbitration Clause that Works
Drafting an Arbitration Clause that Works
Josh M. LeavittMuch ShelistChicago, [email protected]
W. Alexander MoseleyMonteagle, [email protected]
Allison J. SnyderPorter Hedges, LLPHouston, [email protected]
WHY DO CLIENTS COMPLAINABOUT ARBITRATION?
• Lack of Understanding / Information• Common Complaints
– Expensive & Time Consuming– Arbitration is “Litigation-Like”– Arbitrators are Not Qualified– Arbitration is Arbitrary
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WHAT ABOUT STANDARD RULES?
• Default Position - Adopt Standard Rules• Why this is problematic?
– Lawyers and clients are unfamiliar with the rules– Lawyers have not evaluated client’s concerns– Lawyers have not educated clients
• What are your alternatives?• Why should you “customize”?
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WHAT CAN THE LAWYER DO TO HELP?
• Use a knowledgeable construction lawyer• Don’t specify standard rules you don’t know• Understand your client’s business• Educate your client about its options• Customize an appropriate clause
– Modify a “standard” clause– Evaluate pros and cons of standard rules
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INITIAL DRAFTING CONSIDERATIONS
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DRAFTING ISSUES RELATING TOORGANIZATIONAL MATTERS
1. Arbitrability Considerations2. Rules and Administration 3. Locale of Arbitration4. Panel Composition
– Number of Arbitrators (1 or 3)– Qualifications
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PARTIES – WHO WILL BE AT THE TABLE?
JOINDER AND CONSOLIDATION
• Practical Considerations• Does your client want complete joinder?• Drafting Considerations for Joinder and/or
Consolidation
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FLOW-DOWN ISSUES
• Pros and Cons of Flow-downs• Practical Aspects of Flow-down Clauses• Drafting Considerations for Flow-downs
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Pre-Arbitration Procedures
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DISCOVERY
• Impact of Standard Rules on Discovery • Factors Impacting Choice on Discovery Limits
– Likely claim sizes/types– Need for information controlled by others– Balancing efficiency: how much is “just right”?
• Drafting Options
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EXPERTS
• Importance of Experts– Not matched by treatment in arbitral rules
• Key to Efficiency in Arbitration– Require expert reports and depositions
• Dangers of Incorporating Federal Rules– Daubert challenges
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E-DISCOVERY
• The Pendulum is Swinging– New AAA and JAMS rules
• Arbitrator and Litigant Training is Needed• Importance of the Pre-arbitration Hearing
– Similarity to Rule 26 Disclosures– Example: Seventh Circuit Pilot Program
• Can “justice” be accorded without e-discovery?
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HEARING AND POST-HEARINGCONSIDERATIONS
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TIME LIMITATIONS
• Drafting Clauses for Efficient Final Hearing– Provider Rules – AAA/JAMS
• Supplemental Rules for Fixed Time & Cost– Pros & Cons
• Ad Hoc Issues• Controlling Time at Hearing
– “Chess Clock”– Written Statements for Direct Testimony
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PREVAILING PARTY CLAUSES
• Do you want Prevailing Party Clause?– Why?– Conversation with your Client
• Arbitrator Discretion– Limited Judicial Review– Arbitrators and the “American Rule”
• Defining Prevailing Party– Who is the prevailing party?– What is the controlling common law?
• Expert Fees and Costs
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FORM OF THE AWARD & APPEAL
• Conversation with Your Client– Pros & Cons of Each Type of Award– Impact on Cost– Impact on Schedule– Impact on Finality
• Appellate Considerations– AAA and JAMS Rules– How Appeal Relates to Form of Award
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QUESTIONS?
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