This is the fifth article in a 12-part series on domestic arbitration, offering a clear guide through each stage of the process. In this installment, we take an in-depth look at the preliminary hearing, including establishing a procedural timetable, discovery schedule, and setting ground rules for the arbitration.
A well-planned arbitration starts with a well-run preliminary hearing. As Benjamin Franklin said, Failing to prepare is preparing to fail.” Nowhere is this truer than in arbitration. Arbitration, as an alternative to litigation, thrives on efficiency and flexibility.
The preliminary hearing is where arbitration is shaped, structured, and set for success. However, achieving these benefits requires careful planning, and the preliminary hearing plays a pivotal role in laying the foundation for a smooth and effective arbitration process. This crucial procedural step allows the arbitrator and parties to structure the arbitration, identify key issues, and establish a framework that ensures a fair, expeditious, and cost-effective resolution. The preliminary hearing isn’t just a step in arbitration—it’s the foundation. A well-structured hearing prevents chaos, streamlines the process, and ensures a fair and efficient resolution. Skip it, and “you risk turning arbitration into the very litigation you sought to avoid.”
One of the primary objectives of the preliminary hearing is to establish a schedule that keeps the arbitration process on track. This involves setting deadlines for the submission of pleadings, discovery requests and production of documents, exchange of witness statements and expert reports, pre-hearing submissions and briefs, and the final evidentiary hearing. Arbitrators emphasize the importance of creating a realistic yet firm schedule, ensuring that unnecessary delays are prevented while still accommodating reasonable requests for flexibility. A well-conducted preliminary hearing clarifies the precise issues to be determined. The arbitrator may ask the parties to summarize their claims, counterclaims, and defenses to ensure alignment on the scope of arbitration. This step is crucial in preventing later disputes about what is or is not within the tribunal’s jurisdiction. The parties, often in consultation with the arbitrator, determine the rules that will govern the proceedings, which includes deciding on the application of institutional or ad hoc arbitration rules, whether national procedural laws will impact the arbitration, the admissibility and presentation of evidence, and the extent to which discovery and disclosure will be permitted.
The goal is to strike a balance between procedural fairness and efficiency, while ensuring that the process is tailored to the specific needs of the case. Unlike litigation, arbitration usually limits broad discovery to prevent unnecessary costs and delays. The preliminary hearing helps establish key aspects of the discovery process, including the scope of document production, whether depositions, interrogatories, or requests for admission will be permitted, and how privilege issues and confidentiality concerns will be addressed. It also determines the format and timing for witness statements and expert reports. A well-structured discovery process is essential for preventing evidentiary disputes that could derail the arbitration.
Confidentiality is a cornerstone of arbitration, and the preliminary hearing provides an opportunity to reinforce these principles. During this stage, the parties may agree to non-disclosure agreements that govern documents and testimony, closed hearings to protect sensitive information, and procedural orders that limit the use of information beyond the arbitration. These measures help ensure that confidential matters are safeguarded throughout the process. With the growing prevalence of virtual and hybrid arbitrations, the preliminary hearing serves as the appropriate forum to address key logistical matters such as whether hearings will be conducted in person, virtually, or in a hybrid format. It also provides an opportunity to discuss the platforms and cybersecurity protocols for virtual proceedings, as well as the guidelines for the electronic submission of documents and exhibits. These discussions are essential for preventing technical disruptions and ensuring that hearings proceed smoothly and efficiently.
If expert testimony is expected, the preliminary hearing plays a crucial role in defining several key aspects, including the number of experts and their areas of expertise, whether party-appointed or tribunal-appointed experts will be used, the sequence of expert evidence, and any joint expert meetings or reports. Additionally, the tribunal may establish protocols for witness testimony, including arrangements for remote testimony if necessary, ensuring a smooth and efficient presentation of expert evidence. Planning for the final hearing is essential, and the preliminary hearing plays a key role in establishing several important elements, including the anticipated length of the final hearing, the order of presentations, and time limits for arguments. It also addresses the use of demonstrative aids or visual presentations, as well as any translation or interpretation services that may be needed. Having a structured plan in place helps avoid procedural surprises and ensures that the final hearing proceeds smoothly.
At the conclusion of the preliminary hearing, the arbitrator usually issues a Procedural Order that provides a comprehensive summary of the key decisions made during the hearing. This document serves as a critical guide for the arbitration process,
outlining the agreed-upon schedule, discovery parameters, procedural rules, and any special arrangements for witness testimony or expert evidence. By clearly establishing these elements, the Procedural Order helps set precise expectations for both parties, ensuring that all participants are aligned on the next steps. Additionally, it serves to minimize the potential for future procedural disputes, as it provides a clear reference point for the parties to adhere to, reducing ambiguity and promoting efficiency throughout the arbitration. This well-drafted order is essential in maintaining a smooth process and keeping the arbitration on track.
Rushing or cutting corners during the preliminary hearing can have several negative consequences for both you and the arbitration process. First, unclear procedures may arise, leading to disputes over the process later and causing delays. Poor scheduling and planning can create chaos, resulting in missed deadlines, adjournments, and inefficiencies. Without defined discovery limits, parties may engage in endless document requests, leading to discovery battles. Failing to address jurisdictional issues upfront can lead to confusion and challenges mid-process. Last-minute disagreements on the admissibility of evidence can derail hearings, while unresolved logistical issues, such as the venue, virtual vs. in-person format, or translation needs, can cause further disruptions. Additionally, skipping early discussions on settlement opportunities may prolong disputes unnecessarily. Ultimately, poor planning leads to higher costs and delays, increasing both time and expenses.
The preliminary hearing is the architect’s blueprint—without it, the structure of arbitration risks collapse. The preliminary hearing is more than a mere administrative formality—it is a strategic opportunity to set the stage for a well-managed arbitration.
Thoughtful planning and engagement in this early phase can lead to an efficient, fair, and seamless arbitration process. By addressing key procedural elements upfront, parties and arbitrators ensure that the arbitration progresses smoothly, delivering the benefits of speed, efficiency, and finality that make arbitration an attractive alternative to litigation. Skipping or rushing the preliminary hearing doesn’t save time—it guarantees trouble down the road.
Stay tuned for next month’s installment, where we will delve into “Discovery in Arbitration: Managing Document Requests and Depositions.” Discussing the scope of discovery in arbitration, including managing requests for documents, depositions, and handling discovery disputes.
(Harshitha Ram is an international disputes attorney, arbitrator, mediator, lecturer in law, and the President of the Global Arbitration Mediation Academy (GAMA). She serves as the Chair of the ADR Section of the Detroit Bar Association. To learn more or connect with her, visit: www.harshitharam.com www.adracademy.us.)
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