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MEDIATION AND ARBITRATION

By Attorney Susan M. Mooney

Sometimes, in certain cases, a claim may be mediated or arbitrated, rather than proceeding to trial before a Judge or Jury. The following is some general information about Mediation and Arbitration proceedings:

Both are voluntary proceedings and require agreement of both sides.

The Mediation or Arbitration session can usually be scheduled within a thirty (30) to ninety (90) day period after an agreement to submit the case to Mediation or Arbitration.

If settlement is reached at Mediation or an award is made at Arbitration you will, in most cases, have your settlement check within thirty (30) days of the decision.

Costs of Mediation or Arbitration are generally in the $500.00 to $1,000.00 range depending on the size of the case and the forum selected. High value or complex cases may have higher costs.

Mediators and Arbitrators are usually lawyers or retired judges, with considerable experience in the kind of cases which they are hearing.

Mediation and Arbitration services are usually conducted through independent private companies. Sometimes they are court sponsored Mediation programs, which the Courts use to refer cases to in the hopes of encouraging settlements.

If Mediation or Arbitration is utilized in your case you will be prepared prior to the session by your attorney.

Mediation is a non-binding process in which the Mediator works to achieve a resolution of the case by reviewing the case independently and sometimes offering an opinion and then convincing the parties to negotiate a compromise resolution. Mediation is successful in resolving a large percentage of cases. The session is very informal and non-threatening. It requires your attendance with your attorney and the attendance of the insurance company adjustor, with or without their attorney. The session is generally conducted in an office or conference room, and sometimes in the Courthouse. A written summary of the case is often, but not always, presented to the Mediator by your attorney and by the other side. Frequently, other evidence is submitted such as medical reports and records and accident reports. You will not have to testify, but may be informally asked a few questions or for a brief explanation. The session usually does not last more than one and one-half hours on an average case. If the case is not settled at Mediation the case would then continue through the normal course of the litigation process.

Arbitration is binding and will provide a final result of your case. The Arbitrator makes a decision to award damages or not to award damages based upon evidence presented. If a damages award is made, the Arbitrator will determine the amount of the award. Arbitration should for all practical purposes be considered final, since there is generally no appeal from an Arbitration award.

The session is usually conducted in an office or conference room. It is more formal than Mediation, but much less formal than the Courtroom. You and other witnesses will testify under oath at Arbitration, through a question and answer style procedure and will most likely be subject to cross examination by the other side. The Defendant may be present or may not be. The other side will be represented by either a claims adjustor, or an attorney, or both. The formal rules of evidence do not apply, so an Arbitrator may consider evidence that may not be admissible in the Courtroom. This may work in your favor, but in some cases it can work against you if the other side has damaging evidence that they would not be able to introduce in Court. Although Arbitrators will usually hear all the evidence presented to them, even if they know it is not admissible in Court, they may not consider it in making their decision. The length of the Arbitration session will depend on the complexity of the issues in your case.

In motor vehicle accident claims for uninsurance or underinsurance benefits against your own insurance company, Arbitration is a mandatory process, if the case cannot be settled. The maximum award in an Arbitration case is generally limited by the amount of the insurance policy at stake. As previously noted, Arbitration is final and litigation cannot proceed if you are not happy with the Arbitrator's award since the case is over. You give up your right to a Judge or Jury trial by submitting a case to Arbitration. In an uninsurance or underinsurance claim, however, you have no right to a trial by Judge or Jury, since Arbitration is mandatory under the terms of the standard auto insurance policy.

High-Low Arbitration. Sometimes the parties agree before hand to a high-low Arbitration provision. In high-low Arbitration there is a side agreement, usually not known to the Arbitrator, in which the parties agree to a guaranteed minimum and a guaranteed maximum payment. For example, the parties would agree to a low of $10,000 and high of $25,000. If the Arbitrator awarded $0, then there would still be a guaranteed payment of $10,000 to the claimant. If the Arbitrator awarded $50,000 then the payment would be limited to only $25,000. This method guarantees some payment to the claimant, but caps the insurance company's exposure. Depending upon the case, it is sometimes an effective method to resolve a case within certain limits. High-low Arbitration is only by agreement, and is not the usual Arbitration procedure.

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