Most mediators would poke themselves in the eye six times before having to handle an arbitration. Arbitrations are widely seen as business killers.
Mediations usually end well. The parties make their own decisions and control their fate. Usually, parties leave reasonably satisfied. Sometimes everyone is actually happy. No one made anyone do anything. Everyone made their own choices. It’s not quite like performing a wedding, but it’s usually pretty nice.
As a former trial lawyer, I know how painful it is to lose a case. I remembered my losses in much more detail than my wins. I’d stick a bottle of vodka in the freezer at the start of some trials just in case I needed it at the end. Winning gave me the added benefit of not having to drink it.
When a jury gets it wrong, it’s hard to say twelve random people were all prejudiced against you. It’s much easier to blame the judge. And, of course in a bench trial, it’s very easy to say the judge really got it wrong.
As a judge, I knew some of my decisions would be painful. That comes with the job. You have to rule and let the chips fall where they may.
The parties chose to litigate. They were assigned to you. Your job is to rule. You have to rule.
But, in arbitrations, the parties pick the judge. They pick someone they think is a good bet to see things their way. If a party unexpectedly loses that bet, and loses an arbitration, it’s fairly likely the arbitrator is going to be blamed. After all, someone got it wrong. And, additionally, because appeal is difficult, the losing party often feels—and is—stuck.
On first leaving the bench, I refused to do arbitrations. Now, having done quite a number, I’ve come to enjoy them. I truly enjoy reviewing the case closely, trying to figure out the best answer, and then writing a reasoned award that carefully strikes the right tone. Unless requested otherwise, I usually write lengthy awards.
The kick for me is the honor of having been picked to decide something so important to the lawyers and the litigants. They did not have to choose me to decide the case for them, but they did.
Advice to lawyers going into arbitrations:
- Be aware of the possibilities no matter how unlikely. The story goes that the prosecutor was righteous and passionate. He thundered that the crime was abominable and the proof was airtight. Conviction was the answer, the only conceivable answer. In fact, if this jury dared consider acquittal, consider releasing the villain back to society, they’d better give him notice to collect his family and get the heck out of town. The jury somberly retired. The buzzer rang. The sheriff went in for the verdict. The note said the prosecutor had ten minutes.
Whenever you ask anyone to do anything, you usually consider the possible responses. That habit becomes a fundamental safety rule in court where the stakes run high. It’s pretty rare to lose a default prove-up or an unopposed motion, but it happens. The same rule goes for arbitration. Never go into any case requesting an enforced decision without at least considering all of the possibilities, no matter how seemingly remote. Never put yourself in a position where any decision is “unimaginable.”
- Before starting, set the stage for a next step. If there is any chance for an unacceptably adverse ruling, you might work out an arbitration agreement requiring the award to make specific findings of fact and law, answer particular questions, give reasons for the decision, and give the loser some possible basis to litigate or negotiate the award. Of course, this goes both ways. You might jeopardize a favorable award by having sought a particular finding that now makes the award vulnerable.
- Limit the parameters. Go in with a high/low. Ask for a “baseball” award or any of a number of variations which limit risk to both parties.
- If a loss would be completely unacceptable, look for an alternative. If you or your client cannot accept a loss by an assigned decision-maker, find an alternative. Mediate. Settle. Arbitrate. Fold.
- Prepare for an adverse ruling. Be sure you talk with your client and your partners before presenting your case. Make certain that everyone is well aware of the possibilities. Set expectations. If anything needs to be put in writing, do so. Hope for the best but plan for the worst. If the worst does happen, be sure to have a next step discussed in advance.
- Test the waters. Try breaking a big decision into smaller pieces. Agree in advance there can be rulings on preliminary issues to help both sides predict where the decision might be going.
- Help your arbitrator get it right. Give him or her the most current applicable law. Make it clear what must be proven. Provide all appropriate proofs. Cite instructions, standards, statutes, codes and anything else that help your case and also distinguish those that don’t. Provide visual evidence that makes your points clear. Clearly explain technical points. You are convinced you should win. Now, show your arbitrator why you should.
- Never let anger control your judgment. Telling the arbitrator what you presently think of him or her is not going to help you with this case or the next. It’s not going to help your reputation. Do what you can and call the next case.
- Never assume you’re going to win because of your relationship to the arbitrator. Crossing the street the other day, a very disappointed lawyer I’ve known a long time told me I was now “dead” to him. I completely understand how he felt. It was no surprise that he would be upset by my decision. I’ve experienced that same feeling of rage and helplessness.
You cannot set expectations on the basis of a perceived relationship. When two adverse parties ask someone to make an enforced decision, it’s no longer about friendship or admiration. It is only about trusting the arbitrator to do what he or she believes to be right. If you do trust that arbitrator, accept that the ruling may go either way. If you cannot accept that that arbitrator may rule against you, pick someone else, pick someone you can trust.
Hope and expect that awards are made on the merits and nothing else There’s a saying among judges: if he wasn’t your friend after the adverse ruling, he wasn’t your friend before. If you prepare for every possible outcome, prepare your client, help your arbitrator understand your case every way you can, and trust him to rule as he sees fit, then you’ll never leave feeling your award came from an “arbi-traitor.”