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What is Mandatory Arbitration

In Washington State, most of the superior courts have adopted a program known as "mandatory arbitration." Arbitration is way to avoid trial and resolve a case. The purpose of Mandatory Arbitration is to reduce court congestion, expedite the litigation process, and to provide a cost effective resolution of civil claims. The court will appoint an "arbitrator" who will listen to testimony, reviewing evidence, decide the case, and issue an award. Typically the arbitrator is an experienced attorney or perhaps a retired judge.

I have served as an arbitrator in many personal injury cases. Arbitration is more cost effective, has more relaxed rules of evidence, and the hearing is far less stressful than a jury trial which is why arbitration is often preferred over a jury trial. In addition, the arbitration hearing may be scheduled within four to six months after a lawsuit is filed.

In contrast it can take up to two years or more for a case to get to trial. And most arbitration hearings last no longer than a day while a jury trial can last several days or even weeks. There are potential drawbacks with arbitration. For instance, there is often a limit on the amount of damages that can be awarded. In Washington state (as of late 2007) that limit is now $50,000. Even if your case is worth more than $50,000 it could still be advantageous to participate in mandatory arbitration because of the high costs and risks of going to trial.

Another potential drawback is that either party can appeal the arbitration award and request that the case be tried in court. However, if a party appeals the award but fails to do better at trial, that party will have to pay the other side's attorney fees and costs (which could be substantial depending on the facts of the case and the length of trial). In my experience, more than 90% of the arbitration appeals are requested by the defendant's insurance company. Most plaintiff attorneys do not like to appeal an arbitration award because it creates a significant risk that the client may have to pay the defendant's attorney's fees. Most people fail to recognize is that often insurance companies will intentionally appeal a fair arbitration award to force the plaintiff to incur added expense, which can be substantial, of taking the case to court.

Why? Because insurance companies want to make it as expensive and time consuming as possible in order to wear down the plaintiff and their attorney. In fact, many insurance companies will routinely spend more money to defend a case than the amount of money it would take to simply pay the arbitration award. If the arbitration award is appealed and the case goes to trial, the jury will most likely never be informed that the case was submitted to arbitration. And of course, the jury will never be told the amount of the arbitrator's award. This can create problems especially in smaller cases because the jury may be left with the impression that the plaintiff and his or their attorney have forced the jury to come to court to decide a small case.

Many times jurors resent having to decide a small case because they believe smaller cases should be settled. Yet jurors never realize until after the trial that it was the defendant's insurance company that appealed the award and forced a trial. Fortunately, this author has developed proven trial techniques to combat this problem. It is important to remember that there are specific rules that govern Mandatory Arbitration. These rules are complex and can provide traps to the inexperienced attorney.

You should always consult with a qualified and experienced personal injury attorney about whether your accident case is appropriate for Mandatory Arbitration.

Christopher M. Davis is the managing partner of Davis Law Group. He brings over 15 years of practical yet innovative experience to personal injury cases. He practices law in Seattle, WA. You can learn more about Mr. Davis at http://www.InjuryTrialLawyer.com or http://www.seattleaccidentnews.com.



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