Aaa arbitration discovery

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Internet Explorer 11 is no longer supported. In the past few years, more litigation has moved away from the courtroom and into the arbitration process. While initially viewed as a way to quickly resolve simple disputes with relatively few facts at issue, today arbitration is increasingly viewed by corporations as a fast and less expensive way to resolve complex commercial disputes.

Although arbitration, like civil litigation, is intended to provide a full and Aaa arbitration discovery hearing of the issues, arbitration inherently restricts a party's right to discovery. Judges, for example, have pretrial subpoena power over both parties and nonparties but arbitrators, by contrast, do not have such pre-hearing subpoena power over nonparties.

Thus, in order to make an informed decision that arbitration is preferable to civil litigation, Aaa arbitration discovery attorney and client must be fully aware of the differences in litigating in the two forums. The purpose of pretrial discovery in litigation is the full disclosure of relevant facts between disputing parties.

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The Federal Rules of Civil Procedure Rule 26 provides for board discovery in that a party is permitted to discover all information that is not privileged and which is relevant to the litigated matter. Generally, three purposes are served by permitting liberal discovery:. In fulfilling these goals, discovery helps to avoid unfair surprise at trial while providing information that may be used as a basis for Aaa arbitration discovery settlement.

In attempting to accomplish these goals, however, the discovery process often has been viewed as fostering ificant delay as well as increased expense. Courts have power to order broad discovery in aid of litigation, including the authority to issue subpoena for discovery depositions and for document production. Discovery in arbitration generally is deed Aaa arbitration discovery be minimal and informal, and is far less extensive than discovery under traditional litigation.

Discovery in arbitration is limited because the object of arbitration is to foster final disposition of disputes in an easier, faster, and more economical manner than by litigation. The reluctance to engage in discovery in arbitration is premised on the theory that discovery generally is unnecessary for a fair adjudication of the issues, and inevitably causes increased costs, delay, complexity and unnecessary intrusion into parties' affairs.

Gradually, however, as more and more matters are submitted to arbitration, and as these matters become more complex, the need for discovery in arbitration has gained more attention and consideration. Discovery methods during arbitration vary depending on the rules under which the arbitration is conducted and provisions of the parties' respective arbitration agreement.

An arbitration is largely what is agreed to by the parties. Parties can define the arbitration process to be whatever they want and thereby tailor the dispute resolution process to their particular circumstances and dispute.

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Because it is contractual in nature, the parties in arbitration are free to contract as to the scope of discovery. For example, a clause may be inserted into an arbitration agreement such as the following:. Parties shall have all rights of discovery as are provided under [insert whatever rules or part thereof that are deemed appropriate] notwithstanding the American Arbitration Association rules to the contrary. Although provisions allowing for pre-hearing discovery may bind parties, such provisions cannot bind nonparties.

Absent a statute, parties to an arbitration have no right or power to contract to impose discovery obligations on nonparties. The rules of the American Arbitration Association "AAA"however, clearly authorize an arbitrator to exercise his or her discretion to order pre-hearing discovery. Aaa arbitration discovery arbitrator shall have the authority to order such discovery, by way Aaa arbitration discovery deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute.

Although Paragraph 7 of the AAA rules does not compel or otherwise mandate pre-hearing discovery in aid of arbitration as a matter of right, it does provide an arbitrator with the discretion to order such discovery if necessary to a full and fair resolution of a given arbitration. In practice, arbitrators generally require parties to provide pre-hearing depositions and issue subpoenas to third parties for production of documents and depositions.

Although the parties and or the AAA rules may intend to give an arbitrator unlimited authority to order discovery deemed necessary, the authority of an arbitrator ultimately is limited by statute.

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The Federal Arbitration Act "FAA" does not mention discoverynor does the act mention any rights of parties or powers of arbitrators with respect to discovery. Section 7 of the FAA, however, does provide:. The arbitrators may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record or document, or paper which may be deemed material as evidence in the case.

While some courts have held that Section 7 of the FAA empowers arbitrators to issue discovery subpoenas for depositions and production of documents to parties and nonparties alike, 12 other courts hold that this grant of subpoena power is limited to compelling persons to give testimony and produce documents at the arbitration hearing and not before. Because Subsection b specifically limits the arbitration depositions to those for "use as evidence" and only of "a witness who cannot be subpoenaed or is unable to attend the hearing," some courts have limited the subpoena power of subsection a to the circumstances defined in subsection b.

In other words, some courts have determined that arbitrators have subpoena power over nonparty witnesses for attendance at the hearing but do not have such power for pre-hearing discovery pruposes. Paragraph 7 of the AAA rules provides an arbitrator with authority to order such discovery as the arbitrator considers necessary to a full and fair exploration of the issues in dispute. Several well-reasoned federal cases interpreting a substantially similar provision of the FAA support this position and provide guidance as to the proper scope of an arbitrator's authority to order discovery in aid of arbitration.

In Meadows Indemnity Company, Ltd. Nutmeg Ins. Recognizing that the FAA provides an arbitrator with the authority to require a witness to appear before the arbitrator and bring material documents, the Aaa arbitration discovery refused to make a rigid distinction between the production of documents at the time of the hearing versus prior to the hearing:. There is little dispute the arbitration panel, pursuant to its authority under Section 7, could require a witness to appear before the panel and bring all of the documents at issue to a hearing.

Considering the sheer of documents addressed by the subpoena, however, this scenario seems quite fantastic and practically unreasonable. With this in mind, the arbitration panel issued the disputed subpoena as a method of dealing with complex and voluminous discovery matters in an orderly and efficient manner.

Mindful that one of the ultimate goals of the arbitration panel is to make a full and fair determination of the issues involved, and the underlying policies behind arbitration included Aaa arbitration discovery of issues in an efficient and less costly manner, the panel's decision to issue the subpoena seems entirely reasonable.

The power of the panel to compel production of documents from third-parties for the purposes of a hearing implicitly authorizes the lesser power to compel such documents for arbitration purposes prior to the hearing. Similarly, in Stanton v. The plaintiff objected, contending issuance of the subpoenas was improper because it constituted impermissible pre-hearing discovery. The court, observing that prohibiting the subpoenas would be improper judicial intrusion into an arbitration proceeding, held that pursuant to the Arbitration Act, the arbitrators may order and conduct such discovery as they find necessary.

Both Meadows and Stanton recognize that artificially limiting the power of an arbitrator to compel the production of documents and witnesses only for the hearing is an unnecessarily constrictive and unreasonable reading of Section 7 of the FAA which severely hampers the ability of an arbitrator to ensure a full and fair determination of the issues involved in a complex matter. This recognition of pre-hearing discovery in aid of arbitration has Aaa arbitration discovery acknowledged by an Aaa arbitration discovery federal court in Amgen Inc.

Kidney Center of Delaware County, Ltd. While [Section 7 of the FAA] appears to allow an arbitrator to summon a third person only to testify at trial, as opposed to a pretrial discovery deposition, courts have held. Although parties limit access to the full panoply of discovery procedures available in litigation, especially with respect to nonparties, an arbitrator should have authority to exercise his or her discretion to order such pre-hearing discovery. Whereas discovery in aid of arbitration is more limited than in litigation in order to achieve more efficient and economical disposition of disputes, such discovery may nevertheless be necessary to the overriding goal of arbitration --providing a full and fair resolution of disputes.

Limiting the Aaa arbitration discovery of pre-hearing discovery, however, sacrifices a full and fair resolution for the "assumption" of a more efficient and economical disposition. In practice, however, precluding parties from obtaining pre-hearing discovery may result in less efficient and less economical dispositions of disputes. Denying the attorney advanced time to prepare witness examinations with the benefit of pre-hearing discovery, for example, may result in denying the attorney the opportunity to narrow relevant issues, to focus particular lines of inquisition, as well as to expeditiously process produced documents.

As a result, the attorney is forced to conduct such analysis during the hearing. In other words, denying pre-hearing discovery may result in a more efficient and economical pre-hearing period, but may also result in a less efficient and less economical Aaa arbitration discovery. In this respect, arbitration without limited availability of pre-hearing discovery may not avoid the increased delays and costs commonly associated with litigation.

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Regardless of whether arbitration is or is not a more efficient and cost-effective vehicle to the resolution of legal disputes, such discovery limitations may severely hamper the ability of an arbitrator to ensure a full and fair determination of issues involved in complex matters. Moreover, in complicated matters where only one side has unfettered Aaa arbitration discovery to requested third party information, common sense and fairness dictate that the information should be produced in advance of litigation.

Although arbitration and litigation strive to achieve variant purposes, this distinction is perhaps an insufficient basis to draw absolute limitations to the availability of pre-hearing discovery in aid of arbitration. If, for example, a nonparty refuses to comply with an arbitrator's subpoena or moves to quash the subpoena on the ground that the arbitrator had no authority prior to the arbitration hearing to compel a nonparty to appear for a deposition or to produce documents, the parties will be involved in collateral litigation.

Such litigation will be necessary if the Aaa arbitration discovery deems the subpoenaed information necessary to a full and fair hearing. In the event of such collateral litigation, the parties will nevertheless be left standing Aaa arbitration discovery one foot in court and the other in the arbitrator's office. Such collateral litigation, however, may be in conflict with the oft-stated principle that "[a]n arbitration hearing is not a court of law and procedural niceties which are normally associated with a formal trial, such as the right to pretrial discovery or to subpoena documents or witnesses.

Without that discovery, the arbitration process may be fatally defective and subject to challenge. In submitting to arbitration, parties must recognize that they forego the breadth of Aaa arbitration discovery rights available in litigation and perhaps a degree of accuracy.

This is not to say, however, that parties forego all rights to pre-hearing discovery. Arbitrators should retain a degree of discretion to exercise pre-hearing subpoena power when exceptional circumstances warrant such treatment in order Aaa arbitration discovery reach a fair and just resolution.

Pre-hearing discovery should not be readily available, but a party should not be precluded from such discovery where need outbalances fundamental unfairness. Otherwise, absolute preclusion from third party discovery may deny parties what they in fact bargained for in submitting to arbitration in the first place--a fair and just resolution to their dispute.

Explore Resources For Practice Management. Legal Technology. Corporate Counsel. Begin typing to search, use arrow keys to navigate, use enter to select. Pretrial Discovery in Litigation The purpose of pretrial discovery in litigation is the full disclosure of relevant facts between disputing parties. Generally, three purposes are served by permitting liberal discovery: liberal discovery aids in narrowing and clarifying disputed issues prior to trial; liberal discovery facilitates acquisition of evidence by parties for use at trial; and liberal discovery assists in securing information about the existence of evidence that may be used at trial and how and from whom such evidence may be obtained.

Pre-Hearing Discovery in Arbitration Discovery in arbitration generally is deed to be minimal and informal, and is far less extensive than discovery under traditional litigation. Arbitrators' Authority to Compel Pre-Hearing Discovery Discovery methods during arbitration vary depending on the rules under which the arbitration is conducted and provisions of the parties' respective arbitration agreement. Contractual Agreement Between Parties An arbitration is largely what is agreed to by the parties. For example, a clause may be inserted into an arbitration agreement such as the following: Parties shall have all rights of discovery as are provided under [insert whatever rules or part thereof that are deemed appropriate] notwithstanding the American Arbitration Association rules to Aaa arbitration discovery contrary.

American Arbitration Association Rules The rules of the American Arbitration Association "AAA"however, clearly authorize an arbitrator to exercise his or her discretion to order pre-hearing discovery. Paragraph 7 of the National Rules for the Resolution of Employment Disputes promulgated by the AAA provides: The arbitrator shall have the authority to order such discovery, by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute.

Federal and Uniform Arbitration Acts Although the parties and or the AAA rules may intend to give an arbitrator unlimited authority to order discovery deemed necessary, the authority of an arbitrator ultimately is limited by statute.

Section 7 of the FAA, however, does provide: The arbitrators may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record or document, or paper which may be deemed material as evidence in the case.

Compelling Discovery From Nonparties in Aid of Arbitration Paragraph 7 of the AAA rules provides an arbitrator with authority to order such discovery as the arbitrator considers necessary to a full and fair exploration of the issues in dispute.

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Recognizing that the FAA provides an arbitrator with the authority to require a witness to appear before the arbitrator and bring material documents, the court refused to Aaa arbitration discovery a rigid distinction between the production of documents at the time of the hearing versus prior to the hearing: There is little dispute the arbitration panel, pursuant to its authority under Section 7, could require a witness to Aaa arbitration discovery before the panel and bring all of the documents at issue to a hearing. The Meadows court went further to hold that Section 7 of the FAA, which is substantially similar to Section 7 a of the UAA, authorizes pre-hearing discovery: The power of the panel to compel production of documents from third-parties for the purposes of a hearing implicitly authorizes the lesser power to compel such documents for arbitration purposes prior to the hearing.

Conclusion In submitting to arbitration, parties must recognize that they forego the breadth of discovery rights available in litigation and perhaps a degree of accuracy. Thank you for subscribing! Please try again.

Aaa arbitration discovery

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Arbitral Subpoena Powers and Prehearing Discovery - Chapter 13 - AAA Handbook on Commercial Arbitration, Third Edition