Lawrence W. Newman
image: New York Law Journal
David Zaslowsky
International arbitrations can be factually complex. As a result, and to avoid and save on costs, practitioners and arbitrators have developed the widely accepted practice of replacing the direct testimony of witnesses in hearings with detailed written statements of the testimony of each witness. The same practice has not, so far as we can tell, been as widely accepted in domestic arbitration proceedings.
Witness statements are designed to accomplish at least two objectives:
• To reduce the time in hearings during which witnesses present their evidence in direct testimony, which is widely thought of as being, in any event, the product of careful rehearsal with counsel; and,
• To reduce the need for discovery because of the provision of the entirety of the testimony of the witness in advance of the hearing, thereby giving the other side the opportunity to counter this testimony with documents.
The first of these two objectives is widely recognized as being the primary rationale for the use of witness statements. The second is less recognized and perhaps more controversial.
In this article we examine how witness statements are actually being used and how they are being dealt with by party representatives and arbitrators according to our experience and on the basis of what we understand from anecdotal evidence.
CRAFTING WITNESS STATEMENTS
There is no question but that hearing time is dramatically reduced by compressing into written pages what would otherwise be hours of oral presentation. The written pages can be, and often are, carefully crafted by lawyers and are therefore unlikely to contain the human stumbling and groping that is sometimes heard in direct oral testimony. But, in their zeal to present statements by witnesses that provide the maximum support for the case they are representing, some lawyers squeeze the humanity out of the witness statements and may even go so far as to repeat verbatim, from one witness statement to another, precisely the same language.
There is thus an art in crafting witness statements. They should not be presented simply as robotic statements of factual positions that are designed to present a uniform message and leave open as few opportunities as possible for attacks through cross-examination or contradiction. A witness statement must be clear and understandable and should also communicate through the language used something of the personality of the witness.
There are some lawyers who prepare statements by having the witness write the statement, which the lawyers then modify. Many witnesses, however, are not skilled at preparing narrative expositions, or they lack the time to carry out such assignments. Therefore, the practice we recommend is to have the witness provide the lawyer with the facts, leaving it up to the lawyer to craft a statement based on those facts.
Essential to a witness statement are references to documents, and it is usually the lawyers who have the best awareness of the body of documents comprising the evidence. Lawyers are also better able to appreciate the need to bring out in the witness statements the negative points that will inevitably become part of the record, rather than leaving them for exposure in cross-examination or rebuttal testimony. Lawyers can and should understand the need for accuracy and credibility in witness statements, whereas witnesses may be too ready to engage in exaggeration or indulge inaccuracies.
Once witness statements are presented, there are three ways in which they can be dealt with at the hearing. First, the proponents of the statements can be the subject of cross-examination; second, cross-examination may be waived; or, third, the party presenting the witness may in effect withdraw the witness by not making the witness available for cross-examination.
PROPONENT OF A WITNESS STATEMENT
• Oral Examination of the Proponent of a Witness Statement. Many practitioners are loath to have their witnesses simply be submitted for cross-examination, without there being some introductory oral questioning. These are from the "warming-to-the-seat" school of thought, which holds that the witness should be permitted to become accustomed to the environment in which he will be questioned, through the presentation of friendly questions from his lawyer. These preliminary questions cover such ground as the witness' background, and, of course, questions that are in any event to be expected -- as to whether he affirms what is set forth in his witness statement and any corrections that should be made in it.
But the "warming-to-the-seat" can be only part of abbreviated direct testimony. There may be permitted, by agreement between the parties or by order of the arbitrators, brief introductory direct testimony of 15 to 20 minutes worth of questions designed to highlight certain portions of the witness statement, perhaps even enlivened by Power Point presentations. A primary reason that practitioners want to have the opportunity to present highlights arises out of concern that the arbitrators may not, at the time of the hearing, be as thoroughly grounded in the contents of the witness statement as the parties would like. There is thus a fear that what the arbitrators hear may be that to which they pay the most attention to, at least in terms of hearing time. Without the highlights presentation, what they hear will be virtually only challenges to the witness statement.
CROSS-EXAMINATION
This process involves, of necessity, a heavy emphasis on cross-questioning in hearings creating challenges both for the side presenting the witness statement and for the side challenging it. The challenges for the cross-examiner lie in taking maximum advantage of the time available while not harming one's case in the process. The challenges for the proponent of the witness statement are to have the points made in the witness statement understood by the arbitrators and to overcome the points made by the other side in cross-examination through preparation, redirect examination or otherwise.
Cross-examination obviously creates opportunities to create a negative impression of a portion of the other side's case. On the other hand, things can go wrong, sometimes horribly so. Few things can be more devastating to a party's case than engaging in cross-examination that has the effect of permitting the witness to repeat, in stronger words, and with perhaps more supporting arguments and illustrations, what he or she has set forth in the witness statement.
A lawyer facing a strong witness statement may therefore not wish to assay a direct confrontation but may rather focus in cross-examination on less vital but nonetheless material portions of the witness statement. If she can obtain multiple concessions by a witness that he was wrong in such peripheral respects in his statement, such concessions can have a damaging effect on the reliability of the witness' entire statement, including portions containing the major, unchallenged assertions.
CHALLENGES TO CROSS-EXAM
There is a tendency in international arbitration to ration strictly the amount of time for cross-examination, a tendency that may well be more pronounced where witness statements are used. It is not unknown, for example, for the time allotted to the cross-examination of a witness who has submitted a detailed presentation of important facts to be no more than an hour or two. Similar restrictions are known to have been made on the cross-examination of experts. These limited amounts of time are in sharp contrast to the hundreds of hours spent by, for example, the proponents of expert reports.
Time limits on cross-examination have at least two effects. One is that the cross-examiner cannot delve deeply into complex issues for fear of losing time to question on other matters. Second, certain witnesses who are experienced in giving testimony, or who are otherwise well prepared, may respond to questions in an expansive way, in order to direct attention to subject areas that are only peripherally related to the questions asked. These answers not only distract but they take up precious time. Thus, the advantages of time limitations are often on the side of the experienced witness.
In anticipation of such tactics the cross-examiner must have clear and precise, almost show-stopping, questions to present -- ones that will hit home clearly and effectively by extracting important concessions or showing serious inconsistencies. But, in the absence of easily made points, the bell may ring ending the cross-examination before points can be scored.
Thus, there is a burden on arbitrators to examine witness statements on their own and ferret out the weaknesses that could not be pried loose in the time available for cross-examination amid the mountains of reports, exhibits and testimony. The parties may use the opportunities afforded by post-hearing presentations, including, sometimes, proposed finding of fact.
• Not Cross-Examining Witness Statements. What if a lawyer is confronted with a witness statement to which he or she has no contrary or inconsistent facts about which to question the witness? Realizing that attempts to cross-examine the witness may do no more than reinforce the harmful points made in the witness statement, the lawyer may adopt the tactics of pretending the witness statement never existed.
An extreme application of his strategy is to decline to cross-examine the witness and to try to focus the tribunal's attention on other matters. This approach is more likely to be effective if the harmful points are not apparent from a cursory reading of the statement. With a little luck, the lawyer can hope that the relatively few pages constituting the troubling witness statement will be lost in the masses of other paper with which the tribunal is burdened. Thus, declining to cross-examine may, in some instances, be the best course to follow.
On the other side, a lawyer who presents a witness statement that is not cross-examined may be faced with challenges of making sure the arbitrators pay sufficient attention to the witness statement that is not so controverted. Arbitrators are not obliged to accept unchallenged witness statements as true in every respect. They may determine the weight they will give to such presentations. Thus, one reason that an inconsequential or poorly supported witness statement may not be challenged is that it was expected that it would not be given serious consideration by the arbitrators. But, ironically, a question may arise as to whether uncontroverted witness statements may not be taken seriously simply because they are not challenged on cross-examination.
• Failure to Present the Witness for Cross. The other side of the coin is the failure of the party proffering a witness statement or expert report to make the witness available for cross-examination. Although the general practice is that such an undefended statement should be rejected as if it had not been made, there are arbitrators who may nonetheless accept it "for what it may be worth."
Such an approach leaves the party receiving such an undefended statement with what it may consider to be a burden to not simply ignore the undefended statement. To be prudent, the opposing party may decide to do something to discredit the statement, either in the form of arguments concerning the lack of foundation or credibility of the assertions contained in the statement or a brief presentation on the points that would have been made on cross-examination if the witness had in fact appeared. Nevertheless, uncertainty remains as to the extent that the arbitrators may give some consideration to witness statements that are undefended or withdrawn.
In the face of pressures to apply shortcuts to achieve cost savings and efficiency, arbitrators should not permit uncertainty or unpredictability to arise as to how witness statements will be used if they are not cross-examined or defended. Arbitrators should make clear prior to the evidentiary proceedings whether or not undefended witness statements or reports will be unequivocally rejected. The approach arbitrators might take with respect to witness statements that one party chooses not to cross-examine might be less categorical, accepting assertions made in witness statements or reports that are not cross-examined unless they are manifestly incorrect or contradicted by competent evidence in the record. Parties should be able to know, early in the proceedings, what the rules of the game will be as to how witness statements will be treated.
Lawrence W. Newman and David Zaslowsky are partners in the New York office of Baker & McKenzie. They are co-authors of "Litigating International Commercial Disputes" (West Group, 1996). They can be reached at lwn@bakernet.com and dpz@bakernet.com.
