Generally, the rules of evidence do not apply in arbitration. AAA Commercial Arbitration Rule R-34(a) states, “Conformity to legal rules of evidence shall not be necessary.” Arbitrators are required to abide by certain legal privileges, such as attorney-client communications.
Arbitrators may also exclude evidence that is “cumulative or irrelevant.” To come to a fair ruling, an arbitrator may exclude evidence such as hearsay when more reliable evidence could have been procured through discovery or a deposition following formal court procedures. In a deposition, the opposing party would have had the ability to cross-examine the declarant to find out if the hearsay was relevant or just a rumor.
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