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Arbitration in Car Accident Personal Injury Cases

Recently, we posted an overview of alternative dispute resolution (ADR) in auto accident personal injury cases in Louisiana, highlighting the differences between mediation and arbitration.  Then, we posted a closer look at the common practice of mediating car crash crash claims.  The post below, the third in our series on ADR, examines personal injury arbitration.

Arbitration is an alternative dispute resolution process that differs from mediation in that an agreed-upon third party neutral hears the evidence, considers the case, and decides the outcome in a manner similar to that of a trial judge.  Like mediation, arbitration occurs outside the court system.  It can result in your case being resolved much faster than if the matter proceeded to trial in court.  The biggest difference between arbitration and mediation is that arbitration does not involve a settlement agreement between the parties (you, the negligent driver, and the responsible insurance company).  Instead, it is the arbitrator that decides the outcome of the case, not the parties themselves.  Additionally, once you agree to enter the arbitration process, you are bound by the arbitrator’s ruling whether you like it or not.   Moreover, if you are not pleased with the arbitration outcome, you do not have the right to challenge it or appeal it in court.  However, there are still many advantages to arbitration over the normal judicial system.

In a car accident personal injury case, an arbitrator will decide a number of key questions, such as (1) who is at fault, (2) whether you are injured, and (3) how much you will recover for your injuries.  Because these questions are decided in a single session and the ruling cannot be appealed, arbitration usually saves a great deal of time and money compared to taking a case to trial in court.  Sometimes, in car accident personal injury cases where the parties cannot find common ground and settlement seems unlikely, it might be better to get the opposing party to agree to arbitration because, unlike mediation, you will be assured of a resolution at the end of the process.  Just because parties agree to mediation, does not mean they will come to any resolution on the matter.  Arbitration on the other hand, insures that they case will be resolved fully and finally one way or the other.  If you and your lawyer are confident that you are entitled to some amount of damages, getting the insurance company to agree to arbitration may be the fastest way to obtain a result.

THE ARBITRATION PROCESS

An arbitration session is usually more formal than mediation but less formal than an actual trial court.  Like meditation, arbitration is usually conducted in an office or conference room.    The arbitrator makes a decision about the case based upon the evidence and witness testimony presented.  The length of the actual arbitration session depends on the complexity of the case, but the total length of the process is typically much shorter than trial.  In many ways an arbitration session is similar to a trial setting though.  Each side presents their evidence and version of the facts as they see them and witnesses for both sides will testify under oath.  Many times the formal rules of evidence will disregarded or limited to some extent.   This means that the arbitrator may consider evidence that would otherwise not be admissible in court.  This could either work for or against you, and is something that each party’s attorney must consider when deciding if the arbitration process would be advantageous for their client.

The arbitrator can be a retired judge, an experienced lawyer or any other respected neutral that the two parties can agree upon, but usually they are individuals that have trained in the arbitration process.  Arbitration is usually conducted through independent private companies who are members of the American Arbitration Association.  Once you agree to arbitrate, you will have to agree on who the arbitrator will be.  Additionally, you must agree whether the arbitrator’s decision will be binding or non-binding.  If you agree that the arbitrator’s decision is binding, then the arbitrator’s decision is final and cannot be appealed.  By doing this, you are agreeing that will be bound by the arbitrator’s decision no matter the outcome.  In a non-binding arbitration, the arbitrator can recommend a decision but it cannot be forced on either party.  A non-binding arbitration can be beneficial because it can give the parties a chance to see how a neutral third party, such as a judge or jury, might rule on the case.  This can help facilitate an agreement or settlement between the parties at a later time.  If a non-binding arbitration fails to resolve the case, then the parties still retain the option of going forward with trial.

Sometimes parties will agree to a limited arbitration process where the arbitrator only decides one or two issues instead of the entire case.  For example, you and the auto insurance company may agree that their driver is at fault for your accident but also disagree as to the extent of your injuries and the value of your damages.  In that case, the parties may arbitrate only the valuation of damages issue of the case.  That means the arbitrator will only decide what amount should be awarded and nothing else.  You may also agree to what is known as a high-low arbitration provision. In high-low arbitration there is an agreement ahead of time to a minimum and maximum award amount no matter what the arbitrator decides.  Usually the arbitrator does not know of this agreement.  This means, for example, if you and the defendants agree to a low amount of $15,000 and a high of $50,000, and the arbitrator awarded $0 in damages, you would still receive $15,000.  On the other hand, if the arbitrator instead awarded damages of $100,000, you would only receive the agreed upon maximum of $50,000.  This type of agreement serves the interests of both sides by insuring that you will receive some damages limiting the insurance company’s exposure.

ADVANTAGES OF ARBITRATION

Although arbitration is not as common as mediation in auto accident personal injury cases, it can nevertheless be an extremely useful method of resolving your dispute.  The following are advantages to resolving your car crash claim through arbitration:

• It is less expensive than trial.  With fewer hearings, trial dates, and costs than ligation, the costs of arbitration are relatively low.

• It is faster than trial.  In litigation, your case can drag out for years as you wait for trials and appeals. Arbitration, on the other hand, can usually be scheduled within a few weeks or months of the parties’ agreement to arbitrate.

• It is more relaxed than trial.   Arbitration is less formal than trial.  It occurs in an office conference room rather than a courthouse and there is less waiting around.

• It allows the parties to have a ‘high-low’ agreement.   With a ‘high-low’ agreement the attorneys have previously agreed upon an allowed range of damages.

• It provides for greater predictability.  Since an arbitrator is a trained attorney and selected by the parties, he or she is more likely to understand the law and value of the case than a jury, which can be unpredictable.

• The rules of evidence are relaxed.  In some cases, the formal rules of evidence will be limited or even ignored.  This means that the arbitrator can consider evidence that would otherwise not be admissible in court.

• The parties can mutually agree on the arbitration process.  When deciding on various aspects of the arbitration process, the parties can work together on these decisions.  This allows them more flexibility and input in the process than it would at trial where the judge and jury make all of the decisions.

Arbitration can be a good alternative to taking a case to trial in certain circumstances.  Arbitration can create a legally binding decision and more quickly provide a result in the case.  It is important to consult with an attorney to decide if mediation or arbitration may be a good method of resolution after considering the advantages and disadvantages to each.

If you would like to know more about arbitration or your auto accident personal injury case, contact one of our personal injury lawyers in Hammond or Ponchatoula, Louisiana, at 985-467-9525.  Our attorneys help people like you every day, and we welcome your call.