Mediation, Arbitration, and Alternative Dispute Resolution

Posted Friday, November 20, 2020 by Chris Thayer

In Washington, like many states, the vast majority of all injury claims are resolved through non-court remedies nowadays. These include negotiations with insurance adjusters, negotiations with defense lawyers, mediations, arbitrations, and privately held conferences. Even those cases that are filed as lawsuits in court often resolve through settlement of some sort. So, why is it important to still work with experienced trial lawyers, and how do these types of non-litigation methods of settlement actually work in Washington?

*Alternative Dispute Resolution*The term for all these various forms of out-of-court settlement negotiations is alternative dispute resolution (or “ADR”). ADR consists of any form of resolution method that is kept private and does not require a trial in court. Under federal law, these types of settlement methods are favored in the Federal Arbitration Act (FAA), under Title 9 of the U.S. Code. That federal statute states unequivocally that:

“an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (See Sect. 2 of FAA).

Therefore, in most instances, contracts and agreements to arbitrate will be upheld, except where there is a good legal reason not to. For these reasons, many courts are reluctant to permit cases to be filed in court where the parties previously agreed to arbitrate. So, what is arbitration exactly?

*Understanding the Terminology: Arbitration vs. Mediation*Mediation is a voluntary process, typically, whereby a plaintiff and defendant sit down with their respective legal counsels and attempt to hash out differences and negotiate a fair and mutually agreeable settlement. Mediations are led by mediators, who are typically retired attorneys or judges with many years of experience resolving claims this way. Mediations are also sometimes mandatory in other proceedings, such as divorce court. In the context of personal injury claims, they are used as a way to assist the parties in reaching an agreement prior to a trial.

Arbitration, however, is usually a mandatory process required by a court. At one time, all cases with a claimed value under $15,000 had to proceed to arbitration. This is a process where an arbitrator (certified by the state to perform arbitrations) hears the case outside of court and renders an award, much like a verdict. However, the limit was once raised to $50,000 and has been recently raised again to $100,000. This means any case with a claimed value of less than that must proceed to arbitration first.

*What Happens if You are Unhappy with an Arbitration Award?*Those who are displeased with the arbitration award may request a trial de novo, meaning “new trial.” However, if the party who demands trial is not successful in improving the outcome for their side, then they are assessed costs and attorney’s fees. This can be a strong reason to accept the award. But it also means that a rogue arbitration award that is not connected to reality can and should be challenged by going to trial.

With all of this in mind, it should come as no surprise that experienced litigators fair better in arbitrations and mediations. This is largely because of two things. First, the defense knows they are likely to improve the award at trial, so they are more likely to pay better settlements and possibly not even require the case to reach arbitration or trial. Second, experience helps to better inform settlement decisions. So, if you or a loved one are suffering injuries from an accident in Washington, give Pivotal Law Group a call today. Let us discuss your case free of charge and provide you and your family with peace of mind knowing you are represented by experienced trial lawyers who can go the distance.