Not all personal injury claims will be filed as a lawsuit and heard in a standard state court. Some injury claims are settled by mediation or even arbitration. Mediation is an informal negotiation process where each party presents their priorities in the case in a private setting with hopes of reaching a conclusive agreement to settle the matter. All information discussed in the meetings will be kept confidential in most situations, and the agreements can even include non-disclosure agreements from each party. However, the alternative to mediation without formal litigation is arbitration, which can be a very restrictive court procedure that may not necessarily serve an injured claimant well for maximizing a claim’s value.
Understanding How Arbitration Works
Arbitration is an alternate dispute resolution tool that the court system uses to settle certain legal arguments. In a personal injury case, personal injury law firms and insurance company lawyers assemble documentation for a mutually chosen arbitrator who evaluates all material evidence being submitted by each party. The arbitrator will issue a ruling based on the applicable laws for each matter. Sometimes the opposing parties can establish parameters for determining an outcome, as can the arbitrator themselves. It is generally informal, but more formal than a mediation process where the mediator only has the power of persuasion at his/her disposal, as opposed to making a decision binding without agreement from the participants.
Advantages of Arbitration
One primary advantage of arbitration is that a legal issue can be settled much quicker than going to court. Finding a place on the court docket can mean that a case may not be heard for a significant amount of time, and arbitration can be scheduled immediately in some situations when all parties are agreeable. The details of an arbitration order are not necessarily public record either, which can be an advantage for both parties in a personal injury case. Additionally, the financial expense of arbitration is also much lower than actually going to court.
Disadvantages of Arbitration
There are some distinct disadvantages of the arbitration process for those intending to use it for personal injury settlement. The first disadvantage – there is no right of appeal in the event of an unfavorable ruling. The arbitrator’s ruling is final. Another is whether or not the decision is legally binding. Many times when a personal injury claim is forced into arbitration, often resulting from a clause in an insurance contract, it rarely bodes well for the injured claimant. There is a reason why an insurance company might favor the arbitration route – it often benefits them more than the injured party. The ultimate result is often a reduced settlement amount, especially when an arbitration agreement has minimum-maximum parameters before the process even starts. This is common in medical malpractice cases where state law sets award limits.
Why You Need an Attorney in Arbitration
Even though arbitration is considered an informal method of alternate dispute resolution, there are still legal technicalities that apply, hence It is easy to lose a case completely, and unnecessarily when trying to negotiate without the benefit of personal legal representation. In a personal injury case, professional representation may be vital for an equitable settlement. And while an arbitrator can issue punitive awards in certain egregious injury situations, taking a case to trial where it can be heard before a jury might be a much better option. This is especially true when the chosen arbitrator already has a professional history with the insurance provider or the defendant. And if arbitration is mandatory and binding in a claim settlement, there is a reason for it. You always need legal counsel in any personal injury case for a successful outcome.
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