Litigation
Aug. 6, 2002
Learn Procedural Rules for Chosen Arbitration Process
Column by C. David Serena - Litigators may encounter three basic statutory schemes regulating arbitration proceedings in California. The admissibility of written documents is different in each scheme.
Litigators may encounter three basic statutory schemes regulating arbitration proceedings in California. The admissibility of written documents is different in each scheme.
Although other schemes exist in specialty practice areas, such as those provided by collective bargaining agreements, or under the rules of private providers of arbitration services, such as the American Arbitration Association, this article will focus on the three basic schemes encountered as part of the routine practice of law.
The reason for the three different schemes is the philosophy underlying the three types of arbitrations that the codes establish.
The first type of arbitration is of a case that is in litigation. The second type of arbitration is of a case that is trying to avoid the litigation process in court for reasons of cost, efficiency and privacy. The third type of arbitration is a quasi-judicial process.
The Insurance Code substitutes an arbitration procedure against an insurance carrier for a litigated case against an uninsured third party.
Judicial Arbitration
The judicial arbitration process is set up in Section 1141.10 et seq. of the Code of Civil Procedure. The rules of evidence for judicial arbitrations are contained in California Rules of Court, Rule 1613.
In judicial arbitrations, the parties are already involved in litigation. They have all of the rules for discovery in civil actions available to them during the litigation to discover the evidence of the other side(s).
The court, during the litigation process, refers the case to arbitration. When this occurs, discovery, with some exceptions, should be complete.
The litigated case also may get to judicial arbitration by election of the plaintiff. Again, when this occurs, discovery should be complete. The arbitrator has no reason to be involved in the discovery process. That process should have been completed before the referral to arbitration.
Before the judicial arbitration hearing, either party may tell the other side which documents the proposing party will submit into evidence without any other foundation. It does that by giving a notice as described in Rule 1613.
If a party does not notice the documents, they cannot be admitted as evidence at the arbitration hearing without a foundation being laid.
If a party has noticed the documents under the provisions of Rule 1613 and the documents are in the classification of documents described in Rule 1613, the documents are in evidence at the arbitration hearing. No "surprise documents" should appear at the hearing.
Note that the only time the discovery of documents comes into play in a judicial arbitration is if a party did not disclose a document in discovery or under Rule 1613. The party would lay a foundation and introduce the document. The rules of admissibility of evidence not disclosed in discovery come into play.
Contractual Arbitrations
The next scheme applies to contractual arbitrations. That process is set up in Code of Civil Procedure Section 1282 et seq., with emphasis on Sections 1282.2, 1283 and 1283.05.
In contractual arbitrations, discovery is very limited. The rules for discovery in civil actions do not apply. The basic discovery is the demand for documents and a list of witnesses.
The code requires that "[e]ither party shall within 15 days of receipt of the notice of hearing have the right to demand in writing, ... that the other party provide a list of witnesses it intends to call designating which witnesses will be called as expert witnesses and a list of documents it intends to introduce at the hearing provided that the demanding party provides such lists at the time of its demand.
"Such lists shall be served ... on the requesting party 15 days thereafter." Any other discovery is under the control of the arbitrator.
At the contractual arbitration hearing, if one side has not requested designation of documents from the other, then just about anything can be offered to and accepted by the arbitrator.
If a request for designation has been made and not complied with, the arbitrator must decide whether or accept the documents.
A fair-minded arbitrator should not accept the undisclosed documents, except for impeachment purposes. If the request for disclosure has been made and complied with by the opposing side(s), then all documents disclosed should be accepted by the arbitrator.
Amazingly, relevancy is not important. The documents would be given the evidentiary weight that they deserve. Being surprised by documents introduced at a contractual arbitration is possible if you fail to make the request for a list of documents.
You also have little chance to exclude a document for nondisclosure during discovery because there is no discovery.
Uninsured Motorist Arbitrations
The third scheme for arbitrations regulates uninsured or underinsured motorist arbitrations. That process is buried in Section 11580.2 of the Insurance Code.
In these arbitrations, the rules for discovery are essentially the same as in civil actions. However, the rules are enforced by a petition in the Superior Court because there is no pending case. The arbitrator is not involved in the discovery process.
Regarding the introduction of documents at the arbitration hearing, unless the insurance contract provides for other rules, such as those provided by the American Arbitration Association, the rules for contractual arbitration apply. These are the rules set out in Section 1282 et seq.
That means the rules for contractual arbitrations discussed above apply to the uninsured and underinsured motorist arbitration. That also allows for surprises regarding documentary evidence at these arbitrations.
However, if documents should have been disclosed in discovery but were not, these documents may be excluded under the rules of evidence regarding the nondisclosure of discoverable documents.
Note the difference in the manner in which the documentary evidence is found. Also note how the introduction of documentary evidence may be limited.
In judicial arbitrations, the documents are in the possession of the propounding party, either initially or through discovery.
During discovery, documents must be provided on service of a demand to produce. The party offering the documents at the arbitration hearing must give notice of the intent to use the documents as evidence. It also must provide the other side(s) with copies of the documents to be used.
All of this must be within the specified time limits. Before the hearing, each side should have every document that the other side will offer into evidence at the hearing.
The exception would be to call a witness and lay a foundation for the document. Contrast the process in contractual arbitrations.
In contractual arbitrations, if you want to know what documents the other side may want introduced into evidence, you must ask. If you ask, then the other side must tell you.
The documents listed are not provided automatically to the requesting party. However, the documents identified must be made available, on request, for inspection and copying at reasonable times.
If you do not ask, you will not know before the hearing the intent of the other side regarding documentary evidence. The fact that you have not asked, and therefore have not been told, will not limit the admission of the documents at an arbitration under the rules for contractual arbitrations and most uninsured and underinsured motorist arbitrations.
Little or no foundation is needed. To be admitted into evidence in a contractual arbitration, the documents only have to be the type of information a reasonable businessperson would rely on.
In uninsured and underinsured motorist arbitrations, the documents are in the possession of the side that wants to introduce them, either initially or by means of discovery.
However, the only way to find out what document(s) the other side may offer into evidence is to make the demand set forth in Section 1282.2. Again, if you do not ask, you will not know.
There may be documents that were not discovered because of the limitations of the discovery process. If one side did not discover the documents and did not serve a request to designate, no "surprise documents" can be introduced introduced at the arbitration hearing without a foundation being laid, that is, an expert's report.
A caveat regarding uninsured and underinsured motorist arbitrations, and in fact, any arbitration: The parties to the arbitration may, by mutual agreement, change the rules that will govern the arbitration in which they are going to be involved.
Often, for example, parties agree to govern the process of an uninsured or underinsured motorist arbitration by the rules for judicial arbitrations. If you decide to use rules that normally do not apply to the type of arbitration you are involve in, the agreement should be in writing.
The lesson? Be sure you know the rules of procedure for the arbitration process you are about to undertake.
C. David Serena is an attorney certified as a mediator through the Los Angeles County Bar Association's dispute resolution service and as a court-annexed arbitrator by the Nevada State Bar. He now serves exclusively as an arbitrator and/or a mediator through Judicate West.
Contributing Writer
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