Rules for Arbitration

In an arbitration, the parties select an arbitrator who shall hear the case and enter an advisory decision. The arbitrator’s decision is made to facilitate the parties’ negotiation of a settlement and is nonbinding, unless: (i) neither party timely requests a trial de novo, in which case the arbitrator’s decision is entered by the senior resident superior court judge as a judgment; or (ii) the parties agree that the arbitrator’s decision shall be binding. (a) Arbitrator’s Canon of Ethics. Arbitrators shall comply with the North Carolina Canons of Ethics for Arbitrators promulgated by the Supreme Court. An arbitrator shall be disqualified and must recuse himself or herself in accordance with the North Carolina Canons of Ethics for Arbitrators. (b) Exchange of Information. (1) Prehearing Exchange of Information. At least ten days before the date set for the arbitration hearing, the parties shall exchange in writing: a. b. a list of witnesses that the party expects to testify; a copy of documents or exhibits that the party expects to offer into evidence; and c. a brief statement of the issues and contentions of the party. The parties may agree in writing to rely on stipulations and statements, sworn or unsworn, rather than a formal presentation of witnesses and documents, for all or part of the hearing. 37 TOC Rule 12 Each party shall bring the materials to the hearing and provide a copy of the materials to the arbitrator. The materials shall not be filed with the court or included in the case file. (2) Exchanged Documents Considered Authenticated. Any document exchanged by the parties may be received in the hearing as evidence without further authentication; however, the party against whom the document is offered may subpoena and examine as an adverse witness the author, custodian, or a witness through whom the document might otherwise have been introduced. Documents not so exchanged may not be received if to do so would, in the arbitrator’s opinion, constitute unfair, prejudicial surprise. (3) Copies of Exhibits Admissible. A copy of a document or exhibit that has been exchanged by the parties is admissible in an arbitration hearing in lieu of the original. (c) Arbitration Hearings. (1) Witnesses. Witnesses may be compelled to testify under oath or affirmation and produce evidence by the same authority and to the same extent as if the hearing were a trial. The arbitrator is empowered and authorized to administer oaths and affirmations in arbitration hearings. (2) Subpoenas. Rule 45 of the North Carolina Rules of Civil Procedure shall apply to subpoenas for the attendance of witnesses and the production of documentary evidence at an arbitration hearing conducted under these rules. (3) Motions. Designation of an action for arbitration does not affect a party’s right to file a motion with the court. a. The court, in its discretion, may consider and rule on a motion at any time. The court may defer consideration of an issue raised in a motion to the arbitrator for determination in the arbitration award. If the court defers the issue in the motion to the arbitrator, then the parties shall state their contentions regarding the motion to the arbitrator in the exchange of information that is required under subsection (b)(1) of this rule. b. The pendency of a motion shall not be the cause for delaying an arbitration hearing, unless the court so orders. (4) Law of Evidence Used as Guide. The law of evidence does not apply in an arbitration hearing, except as to privilege, but shall be considered as a guide toward full and fair development of the facts. The arbitrator shall consider all evidence presented and 38 TOC Rule 12 give it the weight and effect the arbitrator determines appropriate. (5) Authority of Arbitrator to Govern Hearings. An arbitrator shall have the authority of a judge to govern the conduct of hearings, except for the court’s contempt power. The arbitrator shall refer all matters involving contempt to the senior resident superior court judge. (6) Conduct of Hearing. The arbitrator and the parties shall review the lists of witnesses, exhibits, and written statements concerning issues previously exchanged by the parties under subsection (b)(1) of this rule. The order of events during the hearing shall generally follow that of a trial with regard to opening statements and closing arguments of counsel, direct and cross-examination of witnesses, and the presentation of exhibits. However, in the arbitrator’s discretion, the order of events may be varied. (7) No Record of Hearing Made. No official transcript of an arbitration hearing shall be made. The arbitrator may permit any party to make a record of the arbitration hearing in any manner that does not interfere with the proceeding. (8) Parties Must Be Present at Hearings; Representation. Subject to the provisions of Rule 10(c)(9), all parties shall be present at hearings in person, or through a representative authorized to make binding decisions on the party’s behalf, in all matters in controversy before the arbitrator. All parties may be represented by counsel or may appear pro se as permitted by law. (9) Hearing Concluded. The arbitrator shall declare the hearing concluded when all the evidence has been presented and any arguments that the arbitrator permits have been completed. In exceptional cases, the arbitrator has the discretion to receive post-hearing briefs, but not evidence, if submitted within three days after the hearing concludes. (d) The Award. (1) Filing the Award. The arbitrator shall file an Arbitration Award – Superior Court, Form AOC-CV-806, signed by the arbitrator, with the clerk of superior court in the county where the action is pending, and shall provide a copy of the award to the senior resident superior court judge within twenty days of the conclusion of the hearing or the receipt of post-hearing briefs, whichever is later. The award shall inform the court of the absence of any party, attorney, or representative of an insurance carrier known to the arbitrator to have been absent from the 39 TOC Rule 12 arbitration without permission. The award form shall be used by the arbitrator as the arbitrator’s report to the court and may also be used to record the arbitrator’s award. If an agreement upon all issues was reached by the parties, then the award shall also inform the court of the agreement and state the name of the person designated to file the consent judgment or voluntary dismissal. Local rules shall not require the arbitrator to send a copy of any agreement reached by the parties to the court. (2) (3) Findings; Conclusions; Opinions. No findings of fact, conclusions of law, or opinions supporting an award are required. Scope of Award. The award must resolve all issues raised by the pleadings. The award may be in any amount supported by the evidence and shall include interest, as provided by law. The award may include attorneys’ fees, as permitted by law. (4) Costs. The arbitrator may include in an award court costs accruing through the arbitration proceedings in favor of the prevailing party. (5) Copies of Award to Parties. The arbitrator shall deliver a copy of the award to all the parties or their counsel at the conclusion of the hearing, or the arbitrator shall serve the award after filing it with the court. A record shall be made by the arbitrator of the date and manner of service. (e) Trial De Novo. (1) Trial De Novo as of Right. Any party not in default for a reason subjecting that party to judgment by default who is dissatisfied with an arbitrator’s award may have a trial de novo as of right upon filing an Arbitration Demand for Trial De Novo, Form AOC-CV-803 (Demand), with the court, and serving the Demand on all parties within thirty days of service of the arbitrator’s award. A demand for a jury trial under Rule 38(b) of the North Carolina Rules of Civil Procedure does not preserve the right to a trial de novo. A demand by any party for a trial de novo, under this subsection, is sufficient to preserve the right of all other parties to a trial de novo. Any trial de novo under this subsection shall include all claims in the action. (2) No Reference to Arbitration in Presence of Jury. A trial de novo shall be conducted as if there had been no arbitration proceeding. No reference may be made to prior arbitration proceedings in the presence of a jury without consent of all parties to the arbitration and the court’s approval. 40 TOC Rule 12 (f) Judgment on the Arbitration Decision. (1) (2) Termination of Action Before Judgment. A dismissal or consent judgment may be filed at any time before entry of judgment on an award. Judgment Entered on Award. If the case is not terminated by dismissal or consent judgment, and no party files a demand for trial de novo within thirty days after the award is served, then the senior resident superior court judge shall enter judgment on the award, which shall have the same effect as a consent judgment in the action. A copy of the judgment shall be served on all parties or their counsel. (g) Agreement for Binding Arbitration. (1) Written Agreement. The arbitrator’s decision may be binding upon the parties if all parties agree in writing. The agreement may be made at any time after the order for arbitration and prior to the filing of the arbitrator’s decision. The written agreement shall be executed by the parties and their counsel and shall be filed with the clerk of superior court and the senior resident superior court judge prior to the filing of the arbitrator’s decision. (2) Entry of Judgment on a Binding Decision. The arbitrator shall file the decision with the clerk of superior court, and it shall become a judgment in the same manner as set out in N.C.G.S. § 1-569.25. (h) Modification Procedure. Subject to approval of the arbitrator, the parties may agree to modify the procedures required by these rules for court-ordered arbitration. History Note. 373 N.C. 663.