What Is Arbitration in a Personal Injury Case?

Arbitration is a form of alternative dispute resolution where a neutral third party, called an arbitrator, hears both sides of a dispute and makes a decision. In personal injury cases, arbitration can be either voluntary or mandatory, and the decision can be either binding or non-binding.

How Arbitration Works

Both parties present their case to the arbitrator, including evidence, witness testimony, and legal arguments. The arbitrator then issues a decision, called an award, which determines the amount of compensation. The process is less formal than a trial and typically takes less time.

Binding vs Non-Binding Arbitration

Binding arbitration means the arbitrator's decision is final and cannot be appealed except in very limited circumstances. Non-binding arbitration means either party can reject the arbitrator's decision and proceed to trial. Some insurance policies require binding arbitration for disputes, which means you give up your right to a jury trial.

When Arbitration Is Required

Uninsured and underinsured motorist claims often require arbitration as specified in the insurance policy. Some insurance policies include mandatory arbitration clauses. Court-ordered arbitration may be required for cases below a certain dollar threshold. Some contracts, such as those with rideshare companies, include arbitration clauses.

Advantages of Arbitration

Faster resolution than trial, typically weeks to months rather than years. Lower costs because there are no jury fees, reduced discovery, and shorter proceedings. Less formal and less stressful than a courtroom trial. Privacy since arbitration proceedings are not public record.

Disadvantages of Arbitration

Limited appeal rights, especially in binding arbitration. No jury, which means you lose the potential for a sympathetic jury verdict. The arbitrator may be more conservative in awarding damages. Limited discovery may prevent you from obtaining important evidence.

Conclusion

Arbitration can be an effective way to resolve personal injury disputes, but it has significant trade-offs. Understanding whether arbitration is required in your case and whether it is binding or non-binding is essential.

Use our free settlement calculator to estimate what your case might be worth.