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Arbitration Services

Arbitration Experience

No two controversies are identical. Each features macro and micro issues of law, procedure, and risk evaluation influenced by feelings, finances, and considerations of the future. Each requires an assessment of the best way to increase the likelihood of a timely resolution of the problem.

Since retirement from the trial bench, I have privately adjudicated or arbitrated hundreds of cases covering a wide range of business and personal issues and and have experience in the review, design and structuring of various types of conflict resolution models including those in academia and government. Arbitration is required or mandatory in many commercial contracts and is increasingly required in consumer contracts. Otherwise, in a written agreement, arbitration may be the voluntary method selected by the parties for resolving a controversy. This use permits the parties to design an economical due process model for the resolution of their controversy. I have handled case using either model or method.

For parties seeking finality, binding arbitration, using the commercial guidelines of the American Arbitration Association, the North Carolina Arbitration Act, Family Law Arbitration Act, or some tailored, hybrid version is a method of timely resolving a dispute. Arbitration contemplates an exchange of documents which will be submitted at the arbitration; a confidential hearing permitting each side to tell its side of the story; and a binding decision although parties can request that it be non-binding. The decision takes the form of an award. There are three types of awards; standard, reasoned, and an award with full findings of fact and conclusions of law. The award, in effect, operates as an adjudication of the matters submitted. A decision rendered in an arbitration can be taken before a state or federal judge in a process called confirmation. In a confirmation proceeding, the arbitration award is formally recognized and given the full support of the courts for purposes of judicial enforcement.

Case experience in arbitration covers a variety of subject matters in hundreds of cases involving the same areas noted here with a focus on complex cases serving as an individual arbitrator or as a member of a panel including:

  • service as a private arbitrator and member of the national panel for the American Arbitration Association
  • service as a public arbitrator for Financial Industries Regulatory Authority ( FINRA )
  • service as panel chair in over 90% of the cases to which I was either selected or appointed
  • service in UIM/UM arbitration cases
  • service in private engagement director and shareholder arbitration cases
  • service as a court appointed umpire in cases involving fire, water, mold, and other casualty insurance loss cases
  • service as a court appointed receiver – service as a receiver in business liquidation matters
  • service as an arbitrator-case manager for N.C. Department of Public Instruction – Teacher disputes.
  • service by referrals from federal and state courts
  • service in the conduct governmental policy reviews
  • service in the design of conflict resolution models

On multi-arbitrator panel cases, I usually serve as the Panel Chair and handle the pre-hearing discovery issues. I am familiar with and have drafted awards using the standard, reasoned, and findings-of-fact models.

Arbitration Growth

Trials can take several years to complete using the civil procedural rules structure first established in the 1960s by state and federal courts. Since then, lack of court resources, technology, and the generation of more laws necessitated the creation of layer upon layer of supplemental procedural rules. Effectually, these rules serve as additional hurdles of procedural barbed wire, each with its intricacies and added cost. Recently, these rules have been viewed by state legislatures as a revenue source. Many states are now setting fees for filing motions as a form of litigation-pay-go. That is likely to become ever more prevalent.

Arbitration is available to resolve cases on a more timely basis without those additional charges. Simple civil cases involving issues too expensive to fully litigate can be resolved in arbitration. Controversies among businessmen can be resolved in a properly structured arbitration. And complex cases with technical and scientific terminology and applications involving issues such as software and healthcare are highly suited for arbitration. An arbitration can be tailored, designed, and structured to meet the needs of the parties to a controversy.

And increasingly, the proliferation of civil cases and problems with administration in the public trial courts requires litigators to assess whether a decision in that venue is any less credible or reliable than one which may be achieved with a party-selected arbitrator in a private and confidential proceeding. Note that party-selection of the arbitrator avoids one of the commonly-expressed concerns of trial lawyers which is that arbitrators are inclined to “split the baby” instead of entering an award more consistent with traditional notions of law and equity.

Arbitration is available for unrepresented and represented parties such as business owners with ownership, succession, or accounting issues.

Arbitration Rules

Generally, the arbitration process features an initial per-hearing telephonic conference to discuss such matters as: (a) the nature of the dispute; (b) how long the parties believe it will take to hear the matter; (c) whether or not witnesses will be called; (c) whether or not counsel will be involved; (d) the types of documents the parties want to discover, exchange, or submit; (d) whether or not there are accounting issues or special expertise aspects to the case; (f) the involvement of experts; (g) where the matter will be heard; and (h) what the hearing presentation process would look like, e.g. who goes first and how long does each side have to make their presentation? A sample initial scheduling conference order appears below. After the initial conference, the arbitrator is available to address resolve any interim discovery and procedural matters before the hearing. A checklist of arbitration considerations appears below.

The American Arbitration Association, as authorized and governed by the Federal Arbitration Act ( see http://www.law.cornell.edu/uscode/text/9/chapter-1) , has established rules, protocols, and guidelines which are followed in form by most states including North Carolina in its Arbitration Act governing civil and family law matters. FINRA, the securities industry regulatory association, uses similar guidelines. Many private contracts refer to these rules in their conflict resolution contract provisions. Parties in North Carolina may contract to arbitration as authorized and governed by the N.C. Revised Uniform Arbitration Act under similar rules. See http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_1/Article_45C.html. The North Carolina Family Law Arbitration Act is located at this address: http://www.ncga.state.nc.us/EnactedLegislation/Statutes/PDF/ByArticle/Chapter_50/Article_3.pdf .

A critical part of any arbitration is the discovery process. To ensure a level playing field, the Arbitrator must require that discovery is conducted in a timely and forthright fashion. The discovery phase of arbitration is a sensitive one in that the ultimate trier of fact in the case ( the Arbitrator ) is also sitting in judgment of whether a party is “playing fair” in the exchange of discoverable information. Trial lawyers understand that impressions formed during the discovery phase of a case are unavoidably a part of its context. Accordingly, all parties are encouraged to cooperate in making the discovery process meaningful in order to avoid a level of potentially prejudicial, pre-hearing acrimony. That said, interim discovery conferences addressing issues about witnesses, evidence, confidentiality, subpoenas, interrogatories and requests to produce, etc., are not uncommon and, in more complex cases, are expected. As a part of any discovery conference deadlines for compliance will be set and compliance will be monitored.

Upon request and at no charge, I will respond to email questions seeking information about the arbitration or mediation process.

See www.adr.org for representative arbitration rules and my AAA resume.

Arbitration Language for Contracts

The American Arbitration Association® (AAA®) has launched ClauseBuilder, an on-line arbitration and mediation tool that assists individuals and organizations in drafting clear and effective arbitration and mediation agreements. ClauseBuilder, which can be found at www.ClauseBuilder.org, is the first tool of its kind to be offered by an Alternative Dispute Resolution (ADR) services provider.

Arbitration Letter and Scope of Engagement

The use of arbitration ordinarily arises out of a contract or federally-required mandate. Arbitration can be used pursuant to an agreement voluntarily entered into among parties. State arbitration acts provide a means by which this can be done. In either instance, it is important that the parties and the arbitrator understand the scope of the engagement. Nationwide arbitration associations such as the American Arbitration Association provide for this in their rules. For private arbitration or a conflict resolution service, an engagement letter explaining mutual responsibilities will be signed and executed by the arbitrator and the engaging parties.

Arbitration Rates
( divided equally among parties )

Click here for current Rates.

Subject Matter Categories — Case Experience

Click here for Case Experience.

Arbitration Checklist

  1. __Screening and selection of arbitrator/s
  2. __Determine budget for the arbitration
  3. __Panel member disclosures and panel confirmation by the parties
  4. __Finalize claims, counterclaim, amendments
  5. __Set hearing (a) city (b) time (c) location (d) duration
  6. __Set first and second document exchange dates
  7. __Set interrogatory and request for admission limits
  8. __Set fact witness identification and deposition limits and schedule
  9. __Claimant expert witness identification, resume, and deposition cut off dates
  10. __Respondent expert witness identification, resume, and deposition cut off dates
  11. __Set discovery cut off dates
  12. __Submission of tentative witness list for conflicts check
  13. __Submission of expert bios, reports, testimony area to the panel
  14. __Written discovery submitted 30 days pre-hearing will be ignored
  15. __Exchange list of witnesses list 10 days before the hearing
  16. __Pre-hearing briefs submitted 20 days before & responses within 10 days
  17. __Set date for discovery, motions, or other interim matter conference call
  18. __Evidence presentation format: (a) summaries; (b) stipulation of uncontested facts;
    (c) timelines; (d) joint exhibit notebooks; and, (e) itemization of damages
    (f) witnesses taken out of order; (g) hearing notebooks presented at time of hearing
  19. __Determine if affidavits, telephone testimony, or video depositions will be used
  20. __Decide if standard, reasoned, or findings of fact is desired format for final decision
  21. __Court reporter use determination
  22. __Determine if post-hearing briefs are sought
  23. __Set date for entry of decision
  24. __Determine if attorneys fees can be awarded
  25. __Determine if expedited rules re contact with panel members will be used
  26. __Confirm engagement letter terms

Arbitration Forms

Case caption

Initial Pre- hearing Conference Scheduling Order

Arbitration Initial Hearing Template (pdf)

Arbitration Prehearing Order – Long Form (pdf)

Arbitration Proceeding

Parties

IN THE MATTER OF:
Claimant(s):
Respondent(s):
Case Number:

Conference call and participants

An initial pre-hearing telephonic conference was held in the above-captioned matter on
_____________ at _______a.m./ p.m. ____. Participating in the hearing were:

Arbitrator:

Claimant’s Representatives:

Respondents’ Representatives:

Dispute Resolution Staff:

Scheduling order and description of process

The following was agreed upon during the conference and is now entered as the Initial Prehearing
Conference Scheduling Order:

A. Introductions were made and no additional disclosures were made. The Claimants and
Respondents will file the following pleadings within within _________days.

B. The arbitrator confirms that there are no conflicts and the arbitrator is confirmed by the
parties.

C. The parties are hereby advised of the availability of mediation on a separate track.

D. The final hearing in this matter shall commence before the arbitrator on the ___day of
_____________ at 9:00 a.m. ____ in the offices of ________________.The parties
estimate that this case will require ___ days of hearing time, inclusive of arguments.

E. Initial documentary discovery requests will be served by each party on the other within __
(30) days of the entry of this order. Neither is prohibited from filing subsequent discovery
requests based upon the information provided in the first exchange.

F. The fact discovery deadline will be set for ______________.

G. Each party may take up to __ depositions subject to application for additional depositions if
necessary.

H. The parties reserve the right to identify and call experts dependent upon the course of
discovery and should either party seek to identify an expert, they shall notify the other party
within ten days in order that any procedural issues can be determined without the need for a
procedural conference with the arbitrator. Experts may be designated no later than
________________ by the Claimant and not later than _______________by the Respondent.

I. Claimant and Respondent will identify all lay witnesses by _____________.

J. Pre-hearing briefs will be submitted by and with the consent of the parties at their option.

K. The parties will exchange trial witness lists from the previously identified lay and expert
witnesses and exhibit lists by ______________. Each party will inform the other of the intended
subject matter about which a particular witness will testify. Upon the exchange of the aforesaid
information, the parties will confer and determine whether or not an additional discovery
conference is necessary. If so, they will seek a teleconference on this issue.

L. The parties will confer and seek to file a stipulation of uncontested facts 2 ( two ) weeks prior
to the date of the commencement of the hearing. At the same time the parties will submit their
joint exhibits to the arbitrator.

M. There shall be no direct oral or written communication between the parties and the arbitrator
except at oral hearings including teleconferences at which time the parties or counsel will be
present.

N. The arbitration is to be binding (non-binding) upon the parties and subject to tender for
confirmation in accordance with the applicable state or federal law. The arbitrator shall issue a
standard award after the final hearing has concluded unless another form is requested.

O. Post hearing briefs shall not be submitted unless requested.

P. Hearing Procedures.

1. The parties are encouraged to present evidence using the following guidelines:
(a) summaries;
(b) stipulations of uncontested facts;
(c) timelines;
(d) joint exhibit notebooks of concurring documents;
(e) Bates or standard numbering systems;
(f ) itemization of damages;
2. Witnesses may be called out of order.
3. The parties shall make arrangements to schedule the attendance of witnesses so that
the matter can proceed without unnecessary delay. During the final hearing, each party
shall give the other party at least one day advance notice concerning the identity of the
witnesses who will be testifying the following day and the order of the testimony.
4. Prior to final argument the parties will exchange and provide the Panel member with
a list of issues and answers they contend are material to their case. The issues will also
provide a damage calculation.
5. The arbitrator has no objection to the use of telephonic testimony for distant witnesses
or to the presentation of evidence in narrative fashion if all parties are in agreement.

Q. Each party will be responsible for the payment of any expenses associated with the
engagement of a court reporter.

R. A telephone conference to review any interim matters including dispositive motions may be
scheduled upon request by a party. A filing deadline for summary judgment is
__________unless otherwise agreed. A responding party shall have no less than 14 business
days within which to respond before the case is set of hearing.

T. Inasmuch as this case involves _____________issues, counsel will confer and enter into any
orders required to protect _________ confidentiality.

U. This Order remains in effect unless amended.

Dated: _______________________, 20__.

________________________________
Chase Saunders, Arbitrator

 

Draft Agreement to Arbitrate

By Email and U.S. Mail Transmission

_____, Officer/Director/Shareholder
(address)

Re: Written Binding Agreement to Arbitrate corporate issues

Gentlemen:

This letter is sent in draft format in order that suggested changes in format or times can be agreed upon in principle. It serves as an agreement to arbitrate and as an engagement letter for services based upon our discussions. Based upon our initial teleconference at which time the North Carolina Arbitration process was explained and a discussion of your current controversy was outlined, I understand the following situation exists: ( description of problem, eg. ) in the absence of a set of bylaws or a shareholder or partnership agreement setting out a procedure, certain issues, among any others which the parties wish to submit, have to be addressed and resolved including: (a) valuation of the company; (b) arbitrate the ownership dollars based on the value determined in the market evaluation; (c) determine whether actions taken by shareholders should affect their ownership interests in the corporation; (d) determine appropriate relief; (e) calculate dollar offsets to individual shareholder ownership interests based upon their actions; (f) recommend a payout plan to permit a shareholder to leave the company; and (g) determine if there is a basis for liquidating or dissolving the company as recognized under the N.C. Business Corporations Act, and address (h) any other issues the parties want to discuss. By the execution of this document, the officers, directors, and shareholders identified herein and __________________________, Inc. agree to submit this dispute and confer personal and subject matter jurisdiction over this dispute to the undersigned for a binding arbitration as permitted and in accordance with the provisions of Article 45C of the North Carolina General Statutes entitled the N.C. Revised Uniform Arbitration Act. The parties have been provided with the website maintained by the State of North Carolina which contains the provisions and the text of the Act, represent that they have read and understand it, wish to use it procedures as revised and waived as to some of the procedural requirements regarding scheduling and discovery set out the act in order to save time and money. And the parties have agreed to the format for discovery, issue exchanges, and the hearing process which appears in this agreement. It is my further understanding that the officers, directors, and shareholders identified herein agree that the fees for this proceeding shall be paid by ___________.

Issues in Controversy

(1) The officers/directors/shareholders agree that the reason for this arbitration is to determine ( state the issue/s).

Tasks and Procedures to Address Issues: ( examples below )

(1) The valuation of the company is an issue in controversy. The shareholders will agree to the means of providing a valuation or valuations of the business including the selection and authorization of payment of a person to perform another valuation within 7 business days.

(2) Offsets to the interest of each shareholder arising out of actions taken, or contributions to the business, is an issue in controversy essential to determining the value of interest of the remaining shareholders for purposes of a buyout or dissolution.

(3) The parties agree to use this procedure to identify any offsets to their respective interests. The officer/director/shareholders will individually prepare and share with other shareholders a spreadsheet list containing (a) a column of identified items or issues in controversy [ for example, business decisions made by a particular shareholder which are considered improper ]; (b) a column identifying documents or evidence which tends to support the position asserted [ this information is not to be shared with third parties unless that party is an expert who will present evidence at the arbitration ]; and (c) a column specifying the amount of money associated with that item or issue which, if agreed to by the arbitrator after a hearing, would offset the financial interest of the identified shareholder.

(4) A copy of that information will be sent to my office by the close of business on _____________, ______________, 20__. By ______________2012, the director/shareholders will identify a final list of issue to be submitted for consideration in arbitration. If the director/shareholders are unable to agree on an issue, it will be included for determination.

(5) The parties will engage in a discovery process to develop information to be presented at the arbitration.

Scheduling and Hearing Procedure

(1) By ____________, a hearing date will be scheduled at my office and I will send an agenda for that meeting. The parties will present their positions and will be permitted to ask questions. The meeting is considered confidential and accessible only to the parties and any witnesses they may wish to offer.

(2) A hearing will be scheduled at which time each party may make a presentation subject to questions submitted by the other party. The arbitrator will conduct the hearing as a non-jury trial permitting information to be presented in an informal manner subject to the ordinary considerations of repetition and relevance.

(3) The valuations, assertions, explanations of “differences”, business records, photographs, and other evidence, etc. will be weighed, evaluated for credibility, and serve as the basis for a decision.

Award

(1) A brief written decision generally addressing the concerns of the parties will be prepared within 30 days of the submission of the final documents from the parties.

(2) The decision will be sent to the parties and shall contain a provision regarding the expenses and fees associated with service in this matter.

Compensation

(1) My compensation rate for matters of this nature is $____.00 per hour with a one time administrative fee of $150.00. The _______________ is responsible for the payment of my fees. A portion of the service fees will be requested before the decision is rendered to cover time spent in discovery and other administrative duties associated with preparing this matter for hearing.

Agreement Signatures

(1) Signature lines are provided for execution of this document as an agreement to arbitrate. Email if you have any questions.

We agree to arbitrate in accordance with the terms of this document.

________________________

_______________on behalf of

_______________, Inc.

 

________________________

_______________, Director/Shareholder

________________________

Chase Saunders, Arbitrator

 

Enc: N.C. Arbitration Statute link: http://www.ncga.state.nc.us/gascripts/Statutes/StatutesSearch.asp?searchScope=All&searchCriteria=arbitration&returnType=Section

 

 

 

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