Writing the Rules of Your Next Arbitration – Part Three

September 7, 2015

Discovery and Depositions Vary Greatly Depending on the Rules You Selected

Part Three of Four (read Part One, and Part Two)

Perhaps the most significant area of difference among the various arbitration rules out there also is one where the differences are most significant: discovery. For example, under the AAA rules, an arbitrator “may” require the parties to exchange documents that they intend to rely on and “may” allow requests for production of “relevant and material” documents.[1] In other words, there is no guarantee under the AAA rules that a party even gets to see the other side’s evidence in advance of the hearing, much less make broader requests for production.

By contrast, JAMS provides for a voluntary exchange of documents that is much broader in scope, including those to be relied upon and those “relevant to the dispute.”[2] JAMS also has a comprehensive protocol regarding management of discovery.[3]

What if your case depends on documents or information in the hands of third parties? In court, the scope of the subpoena power is broad. But the AAA rule regarding document production refers to production by the “parties.”[4] Meanwhile, the UAA appears to give arbitrators broader third-party discovery powers, including document subpoenas and depositions.[5] Thus, by adopting AAA rules, parties are contractually agreeing to less discovery than they would be entitled to if they adopted no rules at all.[6]

The JAMS rules, on the other hand, state that “[t]he Arbitrator may issue subpoenas for the attendance of witnesses or the production of documents either prior to or at the Hearing,” expressly providing for the broadest discovery of any of these examples.[7] Because third parties have not agreed to any rules of arbitration, arguably the maximum scope of discovery available from them is defined by statute, not the parties’ agreement. But the JAMS rule can be read as authorizing the maximum scope of discovery permissible by statute.

Similar differences arise with respect to depositions. The AAA commercial rules expressly provide for depositions only in “Large, Complex Cases” (i.e., $1 million or more), and then only in “exceptional” circumstances.[8] By contrast, the AAA employment rules give arbitrators general authority to allow discovery by requests for production, depositions, “or otherwise.”[9] JAMS rules presumptively provide for one deposition per side, with more depending on arbitrator discretion.[10] The UAA has no presumptive limit on the number of depositions, but the arbitrator still must authorize them.[11]

While all of these rules give arbitrators discretion to authorize more depositions, and parties may agree otherwise, the rules’ general provisions and presumptive limits vary significantly in ways that, as practical matter, may significantly impact a party’s ability to develop and present its case. It is therefore critical to give thought to the nature of the disputes that are likely to arise and the discovery one’s client will need or want (or want to avoid) in such disputes when selecting a set of rules to govern an arbitration.

–Miles Yanick

Part One | Part Two | Part Four

[1] 9 U.S.C. § 1, et seq., Rule R 22(b)

[2] JAMS Comprehensive Arbitration Rules & Procedures, Rule 17(a).

[3] http://www.jamsadr.com/arbitration-discovery-protocols/

[4] AAA Commercial Arbitration Rules, Rule R-22.

[5] RCW 7.04A.170(1).

[6] While the FAA allows an arbitrator to “summon… 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, document, or paper which may be deemed material as evidence in the case,” 9 U.S.C. § 6, some courts interpret this provision as not providing for pre-hearing subpoenas to third parties (e.g., for deposition).

[7] JAMS Comprehensive Arbitration Rules & Procedures, Rule 21.

[8] AAA Procedures for Large, Complex Commercial Disputes, Rule L-3(f).

[9] AAA Employment Arbitration Rules and Mediation Procedures, Rule 9.

[10] JAMS Comprehensive Arbitration Rules & Procedures, Rule 17(b).

[11] RCW 7.04A.170(2).