ACR-GNY - Higher Damages Award than Requested

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Higher Damages Award than Requested

Higher Damages Award than Requested

Sunday, January 05, 2025 10:00 AM | Anonymous

If an arbitrator determines that the facts and legal issues support a damages award in an amount higher than requested by the claimant, is a higher award warranted, and are there precautions the arbitrator should take to protect the viability of such an award?

What are your thoughts?

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Comments

Sunday, January 05, 2025 10:07 AM | Lisa Renee Pomerantz

The first step is for the arbitrator to review the applicable rules and contract provisions to see if she has authority to issue such an award. The second step would be for the arbitrator to request submissions from the parties on the issue of whether she has such authority and whether the evidence in the case supports such an award.

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- Sunday, January 05, 2025 10:45 AM | Tara Fishler
  
  That seems to make sense, Lisa.
  
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Sunday, January 05, 2025 12:22 PM | Dustin Hecker

It's not a concern if you agree with the theory of damage but just believe a lower amount is warranted. Or if a claimant presents alternative damage scenarios and you don't believe it has established a basis to award the higher amount. Or, probably, if you believe that a significant damage award is warranted and you need to fill in some blanks for an award that the evidence supported but which the claimant did not present all that well. But I would hesitate even to suggest a higher award is warranted if the proponent didn't present an argument for it. At least in a commercial case, the parties typically have lawyers to represent them, the proponent may have chosen to present a lower claim for tactical reasons (to avoid some other discovery, because its expert would not support a higher claim, or because it didn't want to pay a higher forum fee that asserting a higher amount upfront would have required, for example). There is a value to finality, which opening up the hearing for further issues concerning damage might compromise. If I really was convinced a higher award is warranted then yes, I would opt to inform the parties and deal with all objections and possible new arguments/evidence before issuing the final award.

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Sunday, January 05, 2025 1:07 PM | Nasri H Barakat

Arbitrators and panels alike should be guided by the agreement of the parties. Submitting to arbitration is in the majority of the cares a choice of the parties. As in the case of punitive damages, these cannot be awarded if in the relevant jurisdiction they are not allowed, The same applies to any relief sought by the parties. It has to be one requested by the parties and within the confines of their agreement.

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Sunday, January 05, 2025 1:28 PM | Alan Barinholtz

First, it’s necessary to review the rules/contract. If no prohibition, just as a jury can award more than plaintiff’s counsel suggests , so may we as the arbitrator.

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Sunday, January 05, 2025 1:36 PM | abigail pessen

Awarding a higher amount than requested would violate the respondent's due process rights; respondent was entitled to rely on claimant's damages request in determining the extent and content of its defense.
On the other hand, if claimant's damages request resulted from a mis-calculation, the arbitrator could raise that with the parties.

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Sunday, January 05, 2025 2:00 PM | skip short

the above comments are very good. The parties' agreement, any limits of the jurisdiction and the rules of the arbitration tribunal are all essential to consult. Unless the parties clearly set this forth within their agreement, it does seem potentially unfair to award damages in excess of the request without some notice.

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Sunday, January 05, 2025 2:35 PM | Richard Reice

Tricky because arbitrators are not advocates. By awarding a greater amount of damages, unless warranted by some new factual development during trial, I would be supplementing my valuation for that of claimant and their counsel. I might do it, but I would have a hearing on the issue to create record that clearly supports the increased award..

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Sunday, January 05, 2025 4:02 PM | Peter Rundle

An arbitrator may not exceed the authority granted to him or her by the parties - whether by contract or adoption of provider rules. For example, AAA Rule 4(a)(iv)(d) requires a "statement setting forth the . . . relief sought and the amount involved." Rule 49(a) provides that the arbitrator may grant relief "within the scope of the agreement of the parties, . . . ." Rule 6(a) states: "Written notice of the change of claim amount must be provided to the AAA and all parties." While a change in claim amount is possible pursuant to the rules, due notice and an opportunity to respond and be heard are mandatory. Acting beyond the scope of the applicable provider rules risks vacatur. Bottom line, know the contours of your authority and take no action that would come as a surprise to the parties or their counsel.

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Sunday, January 05, 2025 8:35 PM | Kyle-Beth Hilfer

The arbitrator should tread carefully. Going beyond the requested damages amount could violate Respondent’s due process rights. If for some reason the arbitrator felt compelled to consider the higher amount , both sides should be given an opportunity to comment before an award is rendered. If there has been a clear miscalculation, for example, and a reasoned award would expose that miscalculation, the arbitrator should ask both sides to provide arguments before finalizing the award. If, however, the higher amount results from arguments not made by Claimant’s counsel, the arbitrator should think carefully before raising the issue. Claimant may have its reasons for not raising such arguments.

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Monday, January 06, 2025 9:44 AM | Robbie MacPherson

It is the arbitrator's job to consider the evidence and arguments presented in support of the claims and defenses asserted by the parties and to rule award on what has been presented. An arbitrator should never presume they know what the parties intended to claim, but did not. Of course, the arbitrator is free to correct an error, e.g. if the various claims total $101, but the total award requested is $100 the arbitrator may award $101

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Monday, January 06, 2025 11:21 AM | Marvin Schuldiner

Awarding an amount above the remedy requested is problematic. The point of an adjudicative proceeding is to provide for a remedy to an injured party. They have to ask for the remedy as part of the proceedings. A neutral who goes beyond the ask is risking having the award vacated on a number of grounds.

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