Articles

Evidence

EVIDENCE AT TRIAL AND AT ARBITRATION

It has long been settled that unless the parties agree otherwise, arbitrators may consider evidence that would normally be inadmissible in court trials.  The rules of most arbitral institutions reflect this more liberal approach to admissibility.

There are some exceptions, such as acknowledgment of the lawyer-client privilege and the work product immunity.  AAA R-Rule34(a) (“Conformity to legal rules of evidence shall not be necessary.”) and (c) (“The arbitrator shall take into account applicable principles of legal privilege, such as those involving the confidentiality of communications between a lawyer and client.”).

Most arbitrators are liberal in the admission of evidence and receive any nonprivileged evidence unless it is plainly irrelevant or unduly repetitious.  Thus, for example, hearsay evidence is freely received in most arbitrations, and arbitrators usually dispense with the necessity of laying formal foundations for business records, past recollection recorded, and similar evidence.  Documents generally are presumed authentic unless a specific objection is raised regarding a particular document.  Lay witnesses often are allowed to express nonexpert opinions.  Evidence usually is received for any purpose for which it may be relevant and admission for limited purposes is relatively rare. 

Although arbitrators frequently observe that the evidence will be received “for what it is worth,” counsel may not appreciate how significant that observation can be.  Thus, it may be that arbitrators such a record if it concerns a critical finding in the case and there has been no evidence regarding (1) the person or persons who create such records for the business, (2) the extent of their training and knowledge , (3) how quickly after the event they make their records, (4) the source of their information concerning what they record, and (5) similar factors affecting the accuracy and reliability of such records.  In a similar manner, although hearsay evidence of a statement by an absent observer concerning a crucial event may well be received, the arbitrators may be reluctant to give it much weight if the absent observer could have been presented for cross-examination.

If arbitrators intend to apply a very liberal standard in the admission of evidence, they should urge counsel to consider presenting the most direct and persuasive evidence available on important points, even it weaker evidence would be received.  In other cases, arbitrators may conclude that the sensitivity, public importance, or very high stakes of the dispute mandate a strict application of evidentiary rules as to some or all of the issues.  In these situations, arbitrators should identify for the parties the rules of evidence that will be strictly applied and the issues subject to application.