When Does Documents-Only Arbitration Make Sense?

An underutilized dispute resolution process in U.S. commercial disputes is an arbitration conducted only on the exhibits, without a final oral hearing. Such a documents-only arbitral process, much more common internationally, resembles a summary judgment process more than it does a traditional arbitration.

It’s worth a thoughtful look, so let’s consider: What are the advantages of documents-only arbitration, when does it make sense to employ, and, if they are employing it, how can advocates use the process most successfully?

1. Advantages of Documents-Only Arbitration: For the right dispute, the main advantages — and they are substantial compared even with a typical commercial arbitration — are speed and cost savings. After a preliminary conference with the arbitrator, the parties will typically submit their briefs and exhibits, with authenticating testimony in affidavit or declaration form as necessary, on a fairly quick schedule. No deposition discovery is conducted, nor is an oral hearing held with any live witness testimony.

2. When to Use a Documents-Only Process: A commercial contract dispute that is relatively straightforward and that will involve a lower monetary claim (AAA sets its expedited process threshold at $75,000), is a good candidate for documents-only arbitration. As we know, most of the business disputes we handle arise from and are decided on key documents like the underlying agreements and e-mail, as opposed to extensive and disputed oral testimony alone.

But when the issues become more complex, requiring extensive background or explanation of the documents or a product or service feature, for example, I prefer an oral hearing. That is largely because of the opportunity not only to hear from live witnesses, bringing out nuances and permitting assessment of credibility, but because of the advantages of cross-examination. And the higher the stakes, the more important it is that the advocate have multiple opportunities to shape her message and make sure the arbitral tribunal understands the issues and how her client believes they should be decided — those opportunities include an in-person appearance, statements to the tribunal, and well-prepared and executed witness examinations.

3. Succeeding in a Documents-Only Arbitration. To invoke the process in the first place will involve some prediction — determining when and how to specify documents-only language in the parties’ contract. The language itself is straightforward; where you have already selected the applicable rule set, something along the lines of “The dispute will be decided on a documents-only basis, with any oral hearing waived” will suffice. Many administering institutions, for example, the AAA’s Commercial Arbitration Rules, build in expedited procedures that contemplate a documents-only process. In selecting those rules, though, since they otherwise permit a party to request oral hearing, the parties should agree in advance, in their contract or submission agreement, to a documents-only process. It is often useful to group disputes by dollar value or type: Where the amount of a claim is less than x-dollars, for example, the dispute will be documents only.

Once an arbitrator has been selected, the advocate has to balance clarity and concision especially well. Regarding clarity, to engage in a documents-only process does not mean simply supplying the arbitrator with a set of exhibits and letting her wade through them; the advocate needs to provide the narrative that links them to the case theory, often in the form of a short letter brief or hearing brief. That guidance will benefit the arbitrator’s decision-making, and if the arbitrator does not suggest submitting such a brief, it is wise to request one. Similarly, be mindful of telling a story that is interesting where possible and certainly, that not only satisfies the legal elements of a claim or defense, but makes common sense; with care, that can be accomplished in an affidavit in the same way it would be in a witness examination.

Regarding concision, if the dispute is documents-only, it may well be one that is also on an expedited track or where the claim amount at issue is in the lower or middle range. The arbitrator should and likely will be mindful of the need for efficiency and keeping her time in line with the economics of the case. Help satisfy that concern by spending only the pages you need to tell a clear, interesting, and legally-sufficient story, and no more; anything you are submitting should be necessary to satisfy some case element, or helpful in advancing the case story, or both. While that idea may seem evident when articulated, I’ve seen too many cases where a party is providing a large tranche of documents to the arbitrator that may be relevant, but are not necessary.

If you’ve litigated documents-only cases, what has your experience been? E-mail and let me know. If you’re an American lawyer considering the process, or arbitrating one for the first time, know that you’ll feel trepidation about not having the opportunity to cross-examine every witness, or to present and argue at oral hearing. Nonetheless, keeping in mind what we’ve discussed here, documents-only arbitration in the right case is a sound process resulting in sound final awards, on a much quicker and less expensive basis than regular commercial arbitration.

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