Using Construction Contracts to Limit Time-Consuming Discovery in Arbitration

A hallmark of arbitration in the United States has been a limited discovery process. But, construction litigators know that a “limited discovery process” rarely means that there will be no discovery in the arbitration. In the current fast-paced, document-reliant construction environment, extensive e-discovery is often needed to fully understand the merits of a case, because many project teams rely heavily upon electronic project management systems and email communications to document and provide insight (and a time stamp) for a multitude of decisions made on a daily basis. Therefore, the potential for staggering costs and extensive delays that often accompany typical document discovery are present in all but the simplest of construction disputes.

Our panel will address strategies for limiting time-consuming discovery in construction arbitrations, as the parties and the arbitral tribunal must balance achieving cost-effectiveness and expediency against ensuring that claims are thoroughly investigated and vetted before issuing a binding award attendant with limited statutory appeal rights.

Concrete topics to be discussed:
How have arbitral tribunals addressed this dissonance in construction arbitration discovery procedures?
● The American Arbitration Association’s Construction Industry Rules contemplate three levels of discovery review, depending on the amount in controversy: Fast Track Discovery, Regular Track Procedures and cases proceeding under the Procedures for Large, Complex Construction Disputes, in which the amount in controversy is at least $1 million
● JAMS has embraced a truncated approach to trial-like discovery in arbitrations
● At the other end of the spectrum, the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”) provide no express right to discovery, and instead put the onus entirely on the arbitrators
● The one consistent thread throughout these arbitral procedures is that arbitrators are afforded enormous discretion with respect to discovery issues.

A Path Forward: Tailored Arbitration Contracts as a Solution
● Arbitral institutions and arbitrators derive their powers from contracts, and, accordingly, one way to provide clients with a more predictable discovery process is to customize discovery parameters during construction contract negotiations, before a dispute arises.
● If the parties wish to preserve the right to conduct discovery, reasonable parameters should be established during the contract negotiation process.
● Standards with respect to the use, storage and retrieval of electronically stored information can be established upfront to inform client practices. The number and scope of depositions, if any, could also be specified in the construction contract.
● Another important consideration for the discovery process in arbitration is the applicable law.

SPEAKERS:
● Ira Schulman, Partner, PEPPER HAMILTON
● Chris Ryan, Partner, International Arbitration practice, SHEARMAN & STERLING
● Paul Ficca, Senior Managing Director & Global Segment Leader for the Forensic & Litigation Consulting practice, FTI CONSULTING

 TIME:
8:00 AM – 8:30 AM – Check in/Networking
8:30 AM – 10:00 AM – Program
10:00 AM – 10:30 AM – Networking

FEES:
EACCNY Member: Free
Non- EACCNY Member: Free