Adapting The Hot Tub’s Benefits To Other ADR Remedies
An essential aim of the hot-tub approach to expert presentation is to empower experts to participate more directly in determining the resolution of a dispute. The experts play a central role in defining the debate, identifying areas of compromise and narrowing the divergence between the parties’ opposing viewpoints. Several ADR methods provide the flexibility to adopt the goals of the hot-tub in structuring a dispute process which allows experts to more directly influence the outcome. Successful adaptation depends on identifying disputes where expert analysis will be pivotal in the resolution and incorporating procedures which mitigate the potential downside of having a subject matter specialist thrust to the fore of an, oftentimes, unfamiliar role in the disputes process.
- Mini-Trials Focused On Expert Presentation
Parties who seek to resolve complex, technical disputes short of a costly and time-consuming trial or hearing in arbitration, but wish to avoid ceding control of the presentation of crucial expert testimony to the fact-finder, or even predominately to the expert witnesses, may choose to engage in a mini-trial. The mini-trial may be structured to best suit the needs of the parties and the dispute, but its intent is to permit the parties to engage in a confidential exchange of information, which will result in a dialogue on the merits of the dispute, or its settlement. It is the inherent flexibility of the mini-trial that allows for an approach which focuses on the exchange of expert testimony but also accounts for the concern that lawyers more familiar with the nuances of the courtroom will cede too much control of the case presentation.
Some background concerning the availability and use of the mini-trial ADR option should help in tailoring expert presentations so that the strength and weaknesses of the hot tub approach are balanced. Mini-trials have been favored in construction disputes involving federal government contracts as the government has been reluctant to enter into arbitration agreements, even though the use of arbitration to resolve disputes under federal government contracts has been determined to be constitutional. For example, the CBCA Rules describe the mini-trial, but also provide that the Board will consider the use of any procedure agreed to by the parties, which is deemed to be fair, reasonable, in the best interest of the parties and the Board, and likely to assist in the resolution of the dispute. The CBCA Rules provide in part:
Minitrial. In a minitrial proceeding, the ADR Neutral and the designated principal representative of each party sit as a minitrial panel. The Panel hears and evaluates abbreviated presentations by the parties. The party representatives then may meet with the ADR Neutral to discuss settlement of the dispute. In some cases, the ADR Neutral may provide the party representatives with a non-binding advisory opinion or even a binding decision resolving the dispute.
Similarly, the ASBCA Rules identify the mini-trial as one of several ADR methods available to parties, but also states that the Board will consider other informal methods agreed to by parties to the extent the methods are structured and tailored to suit the requirements of the individual appeal:
Minitrial. The minitrial is an expedited proceeding that may be tailored to meet the needs of the individual appeal. In a minitrial proceeding, the neutral and the designated principal representative of each party will sit as a panel to hear and evaluate abbreviated presentations by the parties. Following the presentations, the party representatives may meet to discuss settlement of the dispute. In a minitrial, any opinions offered by the neutral will be non-binding on the parties.
The International Institute for Conflict Prevention and Resolution (“CPR”) also has published model procedures for minitrials administered by the CPR. The key procedures in the CPR model include:
- Minitrial Panel. The minitrial panel may consist of one member of management from each party, the members from the parties should not have had direct involvement in the dispute and shall have authority to negotiate a settlement on behalf of the party represented. The panel also will include a Neutral Adviser, who is to be objective and independent of both parties.
- Discovery. Where the parties agree that there is a substantial need to conduct at least limited discovery prior to the minitrial presentations, the parties may agree to voluntary exchange of “strictly necessary, expeditious discovery.”
- Briefs and Exhibits. Before the information exchange, the parties shall exchange, and submit to the Neutral Adviser, briefs, as well as all documents or other exhibits on which the parties intend to rely during the presentations.
- Mini-trial presentations. The presentations and rebuttals of each party may be made in any form, and by any individuals selected by a party, including fact and expert witnesses. Generally, members of the panel and counsel for each party may ask questions of opposing counsel and witnesses during open question and answer exchanges following the presentations and during rebuttal.
- Role of Experts. In addition to participation as witnesses in the presentations of the parties, experts also may assist the management representatives and counsel as advisers in attendance during the presentations. The Neutral Advisor also may appoint an independent expert as an advisor on complex, technical matters.
- Negotiations. Following the presentations of the parties, the minitrial panel will engage in negotiations in an effort to resolve all disputes.
- Confidentiality. The entire process is a settlement negotiation. Therefore, all offers, promises, conduct and statements, whether oral or written, made in the course of the proceeding by any of the parties, their representatives, employees, experts and attorneys, and by the Neutral Adviser are confidential.
These rules highlight the adaptability of the min-trial process and how experts can be used in an integral way to shape the outcome of the proceeding. An illustration, however, may provide a glimpse as to how this process might highlight the expert’s role in effectively resolving a highly complex construction dispute before the parties spent considerable time and money to litigate the matter. An expert-driven mini-trial was used to successfully resolve a dispute involving the construction of the twin highway tunnels through the Cumberland Gap National Historical Park.
In an effort to reduce uncertainties in the construction of the 4,100 foot long parallel highway tunnels through the Historical Park in Kentucky and Tennessee, the Federal Highway Administration (“FHWA”) assembled a team of design consultants, geotechnical engineers, construction managers, and inspectors to perform a detailed geotechnical investigation of the project site, which culminated in the construction of a pilot tunnel at a crown drift along the alignment of the southbound tunnel. Despite these well-intended plans for avoiding uncertainty and costly disputes, the contractor submitted a differing site condition claim. The parties were unable to resolve the dispute short of submission of the claim for resolution in the Court of Federal Claims.
Prior to proceeding with significant discovery, the parties agreed to participate in a mini-trial. The presiding judge sat as a settlement judge and heard abbreviated presentations by the parties. The contractor presented fact evidence from its estimator and both parties presented the testimony of its geotechnical experts, with direct testimony and “non-aggressive” cross-examination. Following the presentations, party representatives met to discuss settlement of the dispute.
This minitrial procedure helped spur settlement talks by using experts to explain and discuss the technical matters involved in the dispute. Through the use of this mini-trial process, the parties were better able to understand the points at issue and expedite settlement discussions. While this procedure may not be applicable in all circumstances, when it is effectively applied to matters involving complex technical issues, it can help the parties quickly resolve the matter before proceeding with a costly trial.
- Mediations With Mediator And Neutral Expert
Mediation is yet another oft-used ADR technique for resolving complex construction disputes. The success of any particular mediation can depend on many factors, including, the mediator’s skill set, the parties’ investment in the process, and the exchange of information necessary to inform the parties’ risk assessment. Underscoring the import of a sufficiently matured and well-framed controversy, the lack of adequate information to perform a principled risk assessment oftentimes results in a negotiation impasse. When resolving technical issues is integral to a principled risk assessment, a neutral expert can be utilized by the mediator to assist in weighing the relative merits of divergent expert positions. This referral of technical matters to a neutral expert is comparable to a court-appointed expert witness or special master. Unless specifically provided for by the parties’ mediation agreement, however, the referral to a neutral expert as part of the mediation process can only be suggested by the mediator and must be agreed to by the parties. Given the added expense, using a neutral expert in the mediation process will only likely make sense when the matter in controversy is sizeable.
In large, technically-complex disputes, a neutral expert or technical mediator can work with the opposing experts to define both commonalities and areas of divergence in opposing opinions – akin to the hot-tub process. When considering the successful application of this expert-driven ADR technique, we had the opportunity to speak with Project Controls & Forensics, LLC’s Mr. Kenji Hoshino regarding his familiarity with this approach. Reflecting on past experiences, Mr. Hoshino was able to provide important insight on how to best utilize the assistance of a technical mediator as part of the mediation effort. As an overarching consideration, it is important to select a neutral expert who has recognized expertise in the professional community and, preferably, familiarity with the opposing experts selected by the parties. Selecting a neutral expert who has credibility with the parties’ experts will create the atmosphere of intellectual candor and professionalism conducive to developing consensus where practical and in pinpointing true areas of disagreement. Proficiency is also demanded of the neutral expert when having to digest the varying opinions presented and chart a course toward building consensus short of disregarding the reports presented and starting anew.
As for the process of interfacing with the party experts, Mr. Hoshino recommends face-to-face sessions among the experts outside of the formal mediation process. Depending upon the complexity of the issues being confronted, this exercise may evolve over several follow-up sessions and requests for supplemental analysis. These “behind the scenes” peer-reviews establish the professional environmental and candor necessary for meaningful concessions – while avoiding the stilted opposition often imposed by the adversary process. Bearing this in mind, an attempt to hot-tub the party experts in a general session as part of the mediation itself is not recommended.
To preserve the integrity of the process, ex parte dialogue with the party experts is to be avoided. In final preparation for the mediation, the technical mediator should prepare a report highlighting areas of agreement, framing remaining points of divergence and proposing means of reaching further agreement or compromise. To avoid unnecessary conflict at the mediation, this report should be circulated to the party experts for an opportunity to note any additional challenges to the neutral expert’s findings or distillation of the remaining points of disagreement.
- Expert Determination
Another expert-driven ADR model that can be successfully employed in the proper circumstance is an ad hoc expert recommendation or binding determination. When considering the optimal use of an expert in this capacity, we again spoke with Mr. Hoshino for additional perspective. As a threshold matter, a referral for expert determination should not be made on disputes that involve significant legal determinations, as this will undermine the legitimacy and effectiveness of the process. Embroiling a subject matter expert in the wrestling among counsel concerning legal controversies will place the expert in an unfamiliar circumstance and can threaten the finality of any resolution reached. Likewise, it is equally important to clearly define the technical matters which are being submitted for expert consideration. Careful consideration when drafting the parties’ arbitration submission documents will avoid a host of mischief during the proceedings and when enforcing any binding determination. Clear agreement must be reached as to the matters being submitted to arbitration, the information that is going to be provided by the parties for informing the inquiry and the procedure for reaching the termination. The more explicitly the procedures are detailed, the better positioned the technical expert will be to resolve the technical issues and avoid procedural challenges along the way.
This expert-centered process can be readily utilized in instances where technical judgment is paramount, such as the completion of punch-list items and the satisfaction of performance standards. Expert determination is also successfully used when the parties’ settlement efforts require the resolution of discrete technical issues causing an impasse.
The use of experts is often vital when resolving complex construction disputes. As such, all participants in the disputes process should be mindful of developments in the effective presentation of expert testimony. The practice of offering concurrent expert testimony or hot tubbing experts is gaining significant traction in international dispute resolution. The lessons learned from this expert-centered approach to dispute resolution are not only important when considering the presentation of expert testimony, but can also be adapted when considering the role of the expert in alternative ADR proceedings.