Arbitration can be an effective method of alternative dispute resolution in some cases, but it is not necessarily designed to help in all situations. There are some advantages in certain instances, but typically the advantages of choosing mediation or actually going through formal litigation can be better because of an opportunity to appeal. Cases that are scheduled for arbitration are not subject to appeal, and many times the final ruling of the arbitrator is what neither party may want or expect. This applies in personal injury cases just as in other civil matters, and it is usually best to leave all options open unless the arbitration process can be approved by all parties as non-binding. While most personal injury law firms will not recommend arbitration when settling a personal injury claim, an experienced and knowledgeable personal injury lawyer will understand when arbitration could work to the advantage of an injured client.
Disadvantages of Arbitration
It is best to understand the potentially negative outcomes of arbitration before agreeing to the process. One primary problem is that a standard arbitration case will result in a binding court order with full application of the law. The ultimate problem would be losing the case in a surprise ruling. Arbitration cases are processed with case filing submissions from each party with an argument presented by each party to the legal issue. However, automatic discovery is not a requirement. Any party to the dispute can withhold evidence prior to the case and use it as “surprise” evidence when the case is submitted to the arbitrator. The plaintiff presents their case first with the defendant going second. The plaintiff then has one opportunity for redirecting and clarifying any aspects used as a defense by the respondent party or parties. Both the defendant and their insurance providers can have legal input, and insurance companies will always want to focus on technical legal elements that may exempt the company from the responsibility to pay. In addition, binding arbitration limits the right of appeal for all parties unless it is agreed upon beforehand by all parties to the dispute. The only conditions under which a ruling may be appealed is when the following conditions can be proven to exist:
- Arbitrator conflict of interest
- Judicial ethical violations
- Errors in applying the law
- Violations of public policy
Potential Advantages of Arbitration
Even with the downside of binding arbitration, the ADR method can still be a good avenue to avoid litigation when it can be agreed upon as a non-binding decision from the court. Some cases will be forced into arbitration when a governing contract has an arbitration clause, but this is not always the case in a personal injury claim. This is especially true in a state like North Carolina that uses contributory negligence law in evaluating injury claim liability. North Carolina laws on arbitration exclude any claimant with even a 1% assessment of personal fault of causation from being financially compensated for the injuries, including medical bills. An arbitrator could rule that claims from the respondent negligent party regarding comparative negligence are actually invalid, which could then result in full payment of damages submitted by the injured plaintiff attorney.
The Importance of a Jury of Peers in a Personal Injury Trial
One of the most important considerations when deciding on accepting arbitration as an alternative dispute resolution tool is whether or not a jury decision would be an advantage for the injured claimant. This can be vital when there is a potential for punitive damages when a personal injury lawyer can prove gross negligence on the part of the defendant or bad faith negotiations on the part of the insurance company. There is no jury in an arbitration case hearing, as the magistrate serves as both the judge and jury. This can be a real unknown for an injured plaintiff, and a sympathetic jury can be influenced in many serious injury or wrongful death situations. In addition, many law firms recommend a jury trial because they are involved in the jury selection process with significantly more power to strike jurors than the defense.
Auto Accident Cases And Arbitration
Arbitration is rarely a good decision for injured drivers in North Carolina due to the comparative negligence law or for injured claimants in a premises liability case. However, injured passengers could fare better in some instances when the respondent insurance company is refusing to pay whole damages as the law requires. Passengers in a vehicle are rarely assessed any personal negligence percentage, which means that whole damages should be in line in every injury case for injured passengers. In addition, auto accident cases that go through full litigation often taking a long time to settle, but an arbitration hearing can be scheduled relatively quickly because it is an independent hearing from an official arbitrator with little to no competing case docket. Timing can be a real necessity for injured claimants who are in financial distress due to the injury, and arbitration can rectify that problem. Talk with a car accident attorney experienced in the NC Court system and with prior experience of arbitration.
Not all injury law firms will recommend arbitration as a method of settling a denied personal injury claim, but it can assuredly have advantages in some scenarios. It is always important to select an experienced personal injury lawyer in North Carolina that understands what to expect from the defense in an arbitration case. Experience can be the difference between a whole maximum settlement and possibly no settlement at all.