Why is hearsay inadmissible? Why can’t someone testify as to what he or she heard?
Well, in certain cases, a person can testify as to what he or she heard.
Look at it this way: Fred testifies that "Joe’s mom said Joe was here," but Tom testifies that "Joe’s mom said Joe was there." Who is the court to believe? If what Joe’s mom said is important, get Joe’s mom into court.
Admittedly, this is very simplified, and a good lawyer might be able to get in testimony as to what Joe’s mom said. Remember, hearsay is complicated. But this is the general idea. The hearsay rule can be summed up as "witnesses shouldn’t talk about things that they don’t know about from personal observation or experience."
Arbitrators ignore the hearsay rule, trusting that they will be able to find "the truth of the matter contained therein." They often feel as though they are able to evaluate the reasonability or the actual value of the hearsay when making a decision or ruling. Be advised, that any arbitration hearing that turns into a "he said, she said" shouting match, will most likely be discontinued and/or terminated.