Arbitration is an Alternative Legal Way to Resolve a Case

Arbitration falls under the title of “alternative dispute resolution”. Simply put, arbitration is another way to resolve a legal case or claim. It’s an alternative to going to trial before a judge or jury and is designed to provide an informal, streamlined and reduced cost method of resolving a case. Instead of proceeding with the uncertainties of a prolonged trial with expensive experts and exhibits, the case is heard before an individual or panel who decides the outcome.   

For example, if a person was injured in a car accident in Massachusetts and the other driver’s insurance company denied the personal injury claim, the injured person can file a lawsuit against the negligent driver. The lawsuit will progress in its usual course. Instead of the injured person going to trial, however, the parties to the personal injury lawsuit can agree to arbitration to resolve the lawsuit.

Three Important Features of Arbitration

There are three important aspects of arbitration that must be considered.  One, both sides have to agree to arbitrate the case; Two, both sides must agree on which arbitrator(s) will be used; and Three, and most importantly, arbitration is binding. This means that the arbitrator’s decision is final.

The Parties to the Lawsuit Must Agree to Arbitrate

Arbitration is by agreement of the parties.  For example, in a personal injury case, arbitration can be used when the plaintiff and defendant agree as to who’s responsible for injuries but are far apart in their value of the case. The parties can agree to a “high-low”, for example, which set the parameters of the award.  If the high-low is 100,000.00-50,000.00 that means the parties agree, that despite the arbitrators decision, the plaintiff will not receive less than 50,000.00 but not more than 100,000.00.  Once the parties agree to arbitrate the terms of the arbitration can be fashioned in a number of ways.

One caveat, however, is that arbitration is mandatory in some personal injury claims. The mandate is usually required under the terms of a contract. For example, arbitration is mandatory for an uninsured or underinsured motorist claim. This means that if you are injured in a motor vehicle accident with a vehicle that did not have auto insurance, or did not have enough bodily injury insurance coverage to fully compensate you, you can pursue a claim with your own auto insurance carrier under the uninsured part of your insurance policy (or underinsured, if you purchased this additional coverage). The terms of your insurance policy with your auto insurance carrier usually requires these types of claims be submitted to binding arbitration instead of being able to file a lawsuit.

A Mutually Agreeable Arbitrator Must be Chosen

Both sides (the plaintiff and defendant) have to agree on which arbitrator or arbitrators to use.  You can use a single arbitrator or agree on a three member panel. 

Arbitrators are usually lawyers or former judges. The parties to the lawsuit will seek potential arbitrators that are experienced and familiar with the specific legal claim of the lawsuit or legal dispute. So, in a personal injury case, the parties will want to use a former judge or a lawyer that have either handled or heard personal injury cases.

Typically, the parties to the lawsuit or claim submit their list of potential arbitrators to each other and negotiate an agreement on who to use from their lists.

Arbitration is Binding

Lastly, and most importantly, arbitration is binding. This means that the arbitrator’s decision is final. If one of the parties to the arbitration is unhappy or disagrees with the arbitrator’s decision, they are bound by it and cannot appeal the decision. A Court will usually uphold the decision of an arbitrator as if the case had been tried in court. This means that, in a car accident case, the losing party is stuck with the decision.

Knowing this, great care must be taken in deciding whether to arbitrate and on what terms to arbitrate. Arbitration isn’t for every case. The decision to arbitrate should be made only after having a full understanding of the case, the arbitration process, and anticipated or expected outcome. An experienced personal injury lawyer, who has arbitrated cases before, is extremely helpful to an injured party to help explain the process and determine if arbitration is right for your case.

Have you Been Hurt in a Car Accident in Massachusetts?

If you, or someone you know, has been injured in an accident in Massachusetts you most likely have many questions. Feel free to call us at (508) 879-3500 or contact us online. You should take the time to speak with an experienced legal team to evaluate your case, answer your questions and explain your legal rights. It can be the best decision you make.

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