Innovation produces surprising benefits

Jerome Rock

 I have long encouraged the use of Narrative or Written Witness Statements as a vehicle for introducing the direct testimony of witnesses under the control of a party at the Arbitration Hearing. I eventually developed a formal Protocol, standardizing the process. I expanded the Protocol to incorporate the use of Video Conferencing for witnesses not available at the hearing, but never suggested the entire Hearing would be virtual.

Well before the mandatory Shelter in Place Orders, some arbitrators were reporting on the ease with which Hearings could be successfully undertaken entirely by video conference. Then, because of the necessity to work from home, many judges, arbitrators, mediators, attorneys and clients become proficient using Zoom. 

I suggest the use of Narrative Witness Statements can improve the effectiveness of the Video Conference Arbitration Hearing for all stakeholders. The real innovation will result from the necessity to redesign the process  in a virtual environment, where attorney, clients and witnesses will be limited in their ability to interact in person.  The redesigned process can so exceed the standard, that  using Narrative Witness Statements may well be the compelling reason to use video conferencing for the entire Hearing.

History of Narrative  Witness Statements

Narrative or Written   Witness Statements are the routine method for introducing direct witness testimony in International Arbitration for good reasons. There are often multiple legal systems as well as languages among the parties or neutrals requiring translation, there are generally greater distances between parties and the tribunal requiring  travel, and the focus of the arbitration is often on documentary evidence and issues. 

But Narrative Witness Statements are not common in Domestic Commercial Arbitration although there are specific references permitting evidence by written statement under the Arbitration Rules of the American Arbitration Association (AAA), the Center for Conflict Prevention and Resolution (CPR), and JAMS.

Beginning with the amendments of 2013, the Commercial Arbitration Rules of the American Arbitration Association introduced two separate sections dealing with Preliminary Hearing Procedures. “P-1 General”, provides:

(a) In all but the simplest cases, holding a preliminary hearing as early in the process as possible will help the parties and the arbitrator organize the proceeding in a manner that will maximize efficiency and economy, and will provide each party a fair opportunity to present its case.

(b) Care must be taken to avoid importing procedures from court systems, as such procedures may not be appropriate to the conduct of arbitrations as an alternative form of dispute resolution that is designed to be simpler, less expensive, and more expeditious. (emphasis provided)

The  “P-2 Checklist” suggests topics the parties and the Arbitrator should address at the Preliminary Hearing, (xii)  whether, according to a schedule set by the arbitrator, the parties will (a) identify all witnesses, the subject matter of their anticipated testimonies, exchange written witness statements, and determine whether written witness statements will replace direct testimony.

I have encouraged the use of Narrative Witness Statements as a method of presenting direct testimony of witnesses under the control of a party.  I generally submit an Agenda in advance of the Preliminary Hearing, which includes those topics presented in the P-2 Checklist under the AAA Arbitration Rules, as well as my suggestion to consider use of Narrative Witness Statements . 

Eventually I summarized these instructions, and now issue them as a Protocol.  This is provided to Counsel prior to the Preliminary Hearing.  The Protocol provides guidance to the attorneys on the best practices.   

Direct Witness Testimony

Communicating in a Question and Answer format is an extraordinarily difficult process that requires considerable preparation.  “Real learning” takes place with back and forth interaction between the attorney and the witness and builds confidence in the witness.  But the risk remained the witness would become nervous, confused, or forgets the desired response. 

It is likely the attorney is already engaged in videoconferencing. Background interviews can easily transition to a structured process with multiple iterations of drafting and reviewing and finalizing witness testimony.  

A best practice suggests that the attorney start with a draft of their expected direct examination “Questions”.  These Questions form an agenda for a video conference discussion where the witness is instructed to respond to the questions in an unrehearsed, natural manner, which provides the attorney with the facts and details presented by the witness in their own words, as contrasted to the lawyer’s interpretation of the facts or events.  The attorney then prepares a series of “draft” “Answers” to the “Questions” and submits this suggested ‘draft” to the witness for review and accuracy. During this iterative process, the attorney can make sure all key issues are presented, while preserving the “Answers” in the manner, style and content of the witness as if the “Answers” were provided during an “in person” Hearing. 

The Narrative Witness Statement Protocol supports the process with detailed instructions and procedural ground rules that mimic the typical direct examination format.  First and foremost, the Narrative Witness Statement should be the testimony of the Witness, and not the legal argument of the attorney.  The attorney can assist, review, and focus the witness to describe the facts. The Protocol instructs both sides to prepare the Narrative Witness statement using the same ground rules  typical for direct examination; first question, then witness answer; avoid privilege, establish the foundation, avoid speculation, hearsay, and be cautious about straying into unsupported opinion and argument.  

The Narrative Witness Statement becomes a written work product that is carefully reviewed for accuracy and completeness by both the attorney and the witness, affirmed under oath by the witness and ready to be submitted as direct evidence at the Hearing.   You can readily see how these steps can be completed “virtually”.  This thorough preparation also relieves much of the anxiety of the witness, as they are under less stress and more confident when they respond to cross-examination. In the event the attorney desires to also present their witness for full or partial direct examination at the Hearing to permit the arbitrators to evaluate the credibility of the witness, the Protocol directs that the witness’ direct examination follow the Narrative Witness Statement.   Following the instructions of the Protocol, the time and effort spent preparing Narrative Witness Statements can be consistent with pre-hearing preparation for witnesses under conventional practice, but with more reliable results. 

Cross Examination by the Adverse Party

The Narrative Witness Statements are always subject to cross examination at the request of the adverse party. The opportunity to prepare for cross examination of direct fact witnesses well in advance of the Hearing is obviously a distinct advantage to counsel; well-prepared cross examination is expected to be thoughtful and focused.  When prepared early, and exchanged early, Narrative or Written Witness Statements can lessen the need for deposition of the witness or at the least reduce the scope and duration of the deposition.  The cross-examining party has detailed advanced notice of the witness’ direct testimony and does not rely on a deposition to prepare for effective cross examination. 

Every attorney shares the memory of a client sitting next to them in a Hearing or courtroom while they are cross-examining a witness.   The client’s scribbled message delivered with urgency to the top of your notepad suggesting, or sometimes demanding your immediate action.  In the heat of the moment, the response varies.  But consider how that client’s insight and perspective could have been channeled productively into your preparation for that cross examination.  The client has an opportunity to make contributions that are satisfying to them, and likely beneficial to your relationship.
The adverse party should  be prepared for Rebuttal testimony if necessary, which can be arranged and presented without the need to delay or adjourn the Hearing.  

The adverse party always has the right to cross-examine witnesses.  If cross examination is requested, the witness must attend the Hearing (“in person” or by video conference), or the Witness Statement will be excluded from the record. Depending on the complexity of the case, the testimony of some minor or secondary witnesses prepared and submitted as Narrative Witness Statements, may be agreed upon, without the need for cross examination or attendance of that witness at the Hearing, thereby submitting evidence of foundation for the record, further reducing the cost of the proceedings.

Arbitrator’s Perspective

The Preliminary Hearing deals with the wide-ranging discovery needs of the parties, while the Arbitrator is challenged to maintain a fair, but efficient and economical process.  The analogy to Staged Discovery applies to the Narrative Witness Statement as the first step of this discovery journey.

When Narrative Witness Statements for expected fact witnesses are prepared early and exchanged with this strategy in mind, the adverse party can assess the written testimony as that first level fact finding tool, anticipate the effectiveness of their cross examination at the Hearing and either accept the Narrative Witness Statement as prospective evidence, or demonstrate to the Arbitrator their need for the formal deposition of the witness (“in person” or by video conference) in order to properly prepare for cross examination of that witness.  The Preliminary Hearing Order can then be used to phase the schedules for the exchange of Narrative Witness Statements as the Arbitrator monitors the progress, adjusting schedules as needed to accommodate the newly requested deposition of witnesses. 
Clearly, any reduction to pre-hearing discovery effort reduces the cost of the Arbitration.

Since the Narrative Witness Statements are exchanged in advance of the Hearing, the Arbitrator develops a perspective of the entire case and the interplay of expected testimony and the documentary Exhibits.  Since the Arbitrator is better informed, they can more effectively manage Pre-Hearing issues without the need for extensive conferences or formal briefing from the parties. 

The Narrative Witness Statements are also used by the Arbitrator to prepare for the Hearing.  The Arbitrator is familiar with the testimony in advance, can prepare their own questions, and anticipate the topics of cross examination.  The Arbitrator’s note taking is largely limited to annotating the Narrative Witness Statements..  

There may be a concern that the use of Narrative Witness Statement limits the Arbitrator’s opportunity to gauge the many dimensions of witness credibility, since the Arbitrator will only observe the witness under the pressure of cross examination.  As a response, the Protocol permits the lawyer to put their witness through as little or as much of the full direct examination in front of the Arbitrator as they feel necessary, using the Narrative Witness Statement as the outline.  Although this concession may counterbalance some of the time savings at the Hearing achieved by using  the Narrative Witness Statement in lieu of full direct examination, it’s a small concession  to assure the parties the full opportunity to present all relevant evidence at the Hearing.

As Arbitrator, I encourage ongoing settlement discussions, and anticipate the parties will engage in formal mediation at some stage of the proceedings.  Although difficult to document, it is my experience when acting as a mediator, the availability of Narrative Witness Statements increases the likelihood of settlement prior to the Hearing.  The Narrative Witness Statements eliminate much of the uncertainty or confusion of expected testimony and forces the parties to adjust their bargaining and settlement positions accordingly.  As always, a settlement agreed to by the parties spares the Arbitrator from the risk of making a suboptimal Award.  Upon request, the Arbitrator can always issue an Award upon Settlement as suggested under R-48 of the AAA Commercial Arbitration Rules.

When it comes to preparing the Award, there is a reassuring level of confidence that all of the testimony is readily available for review and the Arbitrator’s contemporaneous reactions to the testimony and cross-examination have been preserved as annotations to the Narrative Witness Statements.  This is often more useful than a post-hearing transcript.

Conclusion

The Protocol provides practical explanations and procedural guidelines that satisfy much of the initial hesitation to use Narrative Witness Statements in Domestic Commercial Arbitration proceedings.  When Narrative Witness Statements are developed in a virtual environment, the synergy becomes evident.  The attorney and witness collaborate to produce a ‘better” presentation of the testimony that is then used in a virtual proceeding uniquely suite to showcase the benefit of Narrative Witness testimony.

The Narrative Witness Statement incorporates the same effort involved with ordinary preparation of  witness testimony, but because it becomes a written product, is carefully reviewed for accuracy and completeness. The process is less stressful to the witness, improves the quality of cross-examination, and prepares the Arbitrator with the perspective to better manage the Hearing. 

All of this permits everyone to be better prepared for the Hearing, which itself creates efficiencies and cost savings in the process.

The Protocol is available at www.JeromeRockLaw.com.