After an accident, the insurance company might offer to take your personal injury claim to arbitration. Although arbitration provides a more informal alternative to traditional court litigation, arbitrating a personal injury claim likely does not represent the best option when you have a claim.
Arbitration typically allows insurers to structure the proceedings in their favor and limits appellate rights for accident victims who lose their case or receive less compensation than they believe they deserve in an arbitration award.
Understanding the negative aspects of arbitration can help you make a more informed decision about how to pursue your personal injury case.
What Exactly Is Arbitration?
What is arbitration? Arbitration is a method of alternative dispute resolution in which parties submit their legal dispute to a neutral third party, known as an arbitrator or a panel of arbitrators, to decide the case.
Arbitration resembles traditional court litigation in many ways, as parties may present evidence, witnesses, and arguments at an arbitration hearing to convince the arbitrator to rule in their favor. Depending on the rules of a particular arbitration, parties may also have the right to seek discovery from the opposing side.
An arbitration may result in an arbitrator issuing a non-binding decision, which allows either party to reject it and continue the case in court. However, most arbitration proceedings involve binding decisions, in which the arbitrator issues a decision that both parties must abide by.
Dissatisfied parties have limited rights to challenge a binding arbitration decision. Courts will overturn arbitrators’ decisions only in limited circumstances, such as fraud by either party, bias or partiality by the arbitrator, or an arbitrator who refuses to hear evidence or denies due process to a party.
Potential Advantages of Arbitration
Parties in legal disputes may choose to resolve the case through arbitration for potential benefits that arbitration could provide, including:
- Speed – Arbitration can render a decision more quickly than a lawsuit.
- Lower cost – Arbitration proceedings typically involve lower legal expenses than court litigation.
- Confidentiality – An arbitration hearing typically takes place in private, whereas a trial usually occurs in an open court.
Common Disadvantages of Arbitration
For personal injury claimants, arbitration can pose various disadvantages for their cases, such as:
- Limited discovery – Most arbitration proceedings have a far more limited scope of discovery than offered by the rules of civil procedure in court litigation.
- Limited appellate rights – Parties who lose in arbitration have limited grounds for seeking the overturning of a binding arbitration decision in court.
- Insurers may exercise greater control over the process – Because insurance companies arbitrate numerous claims, they may develop familiarity with arbitrators, allowing them to select arbitrators who tend to take a more favorable view of the insurer’s case.
- Less compensation – Even when an arbitrator goes against the insurance company and awards compensation, the amount tends to be significantly less than what the court might award in a similar case.
Contact Us for Support with Your Case
Arbitration can come with limitations and risks for your personal injury claim. Do not be a victim twice by agreeing to the unfair arbitration of your personal injury claim.
Contact Morgan, Collins, Yeast & Salyer 24/7 for a free consultation with an experienced personal injury lawyer to learn more about the disadvantages of arbitration. When you hire our firm after getting hurt in an accident, you can rest assured that we will do everything possible to keep your case from going to arbitration so we can protect your rights and interests at the negotiating table and in court.
