You may have heard the term “arbitration” in reference to the resolution of a contract dispute, but do you know what it means?
While many car crash claims are resolved through insurance settlements or courtroom verdicts, many are resolved through arbitration. Below, you can learn more about how arbitration works and the pros and cons of this option for resolving a case.
If you are struggling to obtain a fair settlement of your car accident claim, Schmidt Kramer may be able to assist you. Our experienced attorneys have obtained millions in compensation for car crash victims throughout Pennsylvania.
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Why do Some Claims go to Arbitration?
When the victim and his or her attorney and the insurance company cannot reach agreement on a settlement, one side may suggest arbitration. If the other side agrees, they may attempt to use arbitration to reach a resolution.
However, there are also times when courts mandate arbitration. When this happens, both sides have no choice, they must enter arbitration to attempt to reach a resolution.
It is important to note the decision of an arbitrator is not always binding, which means it is not always final. For example, if a court orders arbitration, the arbitrator’s decision may be nonbinding. That means there is a procedure for appealing an arbitrator’s decision.
If arbitration is agreed to privately, both parties can decide if they want the arbitrator’s decision to be binding. If the parties decide to make the arbitrator’s decision binding, it cannot be overturned through a lawsuit or other means.
One of the main benefits of arbitration is you can avoid the added cost of the courtroom. Arbitration is also much faster than a jury trial, which means you receive compensation sooner.
However, one of the disadvantages of arbitration is that expert witnesses usually do not testify. Instead, testimony from expert witnesses is presented via written statements. While this information can still be very useful, it may not be as compelling as it would be if the witness was delivering the information verbally and in person.
The Process of Arbitration
In 2019, Pennsylvania and 20 other states adopted the Revised Uniform Arbitration Act (RUAA) to govern arbitration agreements in the state. This comprehensive law offers guidance on various aspects of arbitration.
The law says the arbitrator or arbitrators will set a time and place for the hearing. Both parties and their lawyers have the right to present evidence and cross-examine witnesses. Arbitrators have the authority to issue subpoenas to witnesses.
In general, they have broad discovery powers to help them determine the facts of a case, much like courts do. For example, arbitrators can issue protective orders, act against parties that are not complying with court orders and set the conditions for taking depositions.
Arbitrators are also required to disclose facts that may affect their impartiality in the case. For example, the arbitrator must disclose personal or financial interests that may be affected by the outcome.
The arbitration hearing usually takes a few hours, compared to a jury trial that may take days. However, the more complex a case, the longer it may take to arbitrate.
While the parties involved can choose nonbinding arbitration, they usually choose for the arbitrator’s decision to be binding.
If you are wondering whether arbitration may be a good option, you should discuss things with an experienced lawyer. Insurance companies cannot require you to go through arbitration. You must agree to use arbitration instead of negotiating a settlement or going to court.
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