Rules for ADR
California Lawyer

Rules for ADR

May 2011


These days, the promise of speedy and cost-effective commercial arbitration can ring hollow. Many factors contribute to this development--often referred to as the "litigationizing" of arbitration--but one standout reason is the ubiquity of electronically saved information (ESI), and the fact that the rules related to ESI and arbitration remain vague. California's Electronic Discovery Act of 2009, modeled after federal provisions, offers guidance for reducing costs and delays related to e-discovery during litigation. But no such direction exists for arbitration.

In fact, the existing statutes and rules are inconsistent. Under the Federal Arbitration Act (9 U.S.C. § 7), it's not clear whether an arbitrator has the power to compel pretrial discovery if it isn't outlined in the arbitration agreement or applicable provider rules. (Compare Security Life Ins. Co. of America v. Duncanson & Holt, Inc., 228 F.3d 865, 870871 (8th Cir. 2000), where arbitrators may order pretrial production, with Hay Group Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404, 407 (3rd Cir. 2004).)

Meanwhile, the California Arbitration Act (CCP §§ 1280-1294.2) doesn't permit discovery in arbitrations unless the parties agree to it; exceptions are made for personal injury or wrongful death cases (CCP §§ 1283.05 and 1283.1). And the American Arbitration Association leaves the scope and manner of discovery production entirely up to the arbitrator. (See Int'l Guidelines for Arbitrators for Exchanges of Information (2008).)

In response to the lack of universal guidelines, some alternative dispute resolution organizations have developed e-discovery protocols for commercial arbitrations.

Paradoxically, the dearth of rules can actually lead to better results--if the process is handled by counsel and an arbitrator who are well versed in ESI. Here are some strategies for arbitrators managing e-discovery.

Preliminary conference. Conduct an early scheduling conference with counsel. If e-discovery is necessary, discuss the ESI that must be preserved, as well as its format and location. Decide on limits to data searches, the form of production, the manner of conducting privilege review, and deadlines.

Management order. Memorialize the ESI-related decisions in a scheduling or management order.

Tiered approach. Start small and expand as necessary. Take a test sample of ESI early on to help parties zero in on the most relevant material. "Quick peek" software tools can be helpful.

Joint online depository. Once parties agree on the ESI to be produced, store it in a searchable, password-protected online depository where parties can share and view the materials.

Shortcuts to privilege review. Avoid page-by-page privilege review by asking the parties to consider stipulating to "clawback" and quick-peek procedures.

Ultimately, arbitration is not the place to insist that no e-discovery stone go unturned. If all parties remain open to discovery-limiting principles, they'll enjoy an affordable and efficient arbitration process.

Martin Quinn, a former trial lawyer, has been a mediator and arbitrator for more than 15 years at JAMS in San Francisco.

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