My Personal Injury Lawyer Recommended that I Take my Personal Injury Case to “Arbitration”. What is “Arbitration” and How Does it Work?

In the vast majority of personal injury lawsuits, the threat of a jury trial is a powerful tool against defendants and their insurance companies. The prospect of being forced to try to explain away seriously negligent conduct to a group of concerned citizens (the jury), especially in cases where that negligent conduct has caused catastrophic injuries to an innocent accident victim, is often too great a risk for a defendant and his or her insurance company to take and forces favorable settlements. This is because juries can award virtually unlimited sums of money to an injured plaintiff; and, especially in cases involving life-altering injuries, a jury’s sympathy for an injured accident victim may, in practicality, prove to be more important to the jury than the evidence or the law in rendering its verdict.

However, there are some personal injury cases in which, for a variety of reasons, a skilled accident lawyer may believe that a jury will not view the case favorably. These reasons can include the relative severity of the injuries (i.e., the injuries are not very severe, or the injuries did not cause the accident victim to miss any time from work or incur any significant medical bills), the fact that the injured victim had pre-existing medical conditions or prior injuries that can easily be conflated with the injuries caused by the accident underlying the lawsuit, or that the case is venued (i.e., the case was brought in a particular court, such as Westchester County) in a county in which juries are known to be unfriendly to particular types of personal injury cases. In such cases, your accident lawyer may decide that foregoing a jury trial and placing the case before an expert neutral “Arbitrator” (a lawyer or retired judge) for a final and binding decision is the best way to maximize the available compensation in the case.

In order to begin the arbitration process, your accident lawyer will have to secure a written agreement with the defendants and their attorneys to place the case into arbitration. This agreement is a binding, irrevocable contract; once it is agreed that a case will be taken out of court and into arbitration, under most circumstances, the agreement is final and cannot be reversed. The arbitration agreement will also specify certain parameters that will apply to the arbitration, which often include: (i) the identity of the arbitrator and/or the company that will provide arbitration services; (ii) the minimum amount of money that can be awarded by the arbitrator; (iii) the maximum amount of money that can be awarded by the arbitrator; and (iv) whether the arbitrator will decide the case based solely upon written submissions, or whether live witness testimony will be taken. Arbitration agreements can also specify whether the defendants will have the right to a physical examination of an injured accident victim by a doctor of their choosing, and whether the parties to the agreement are entitled to interview witnesses of their choosing.

Of particular interest to most accident victims who are considering whether to enter into an arbitration agreement is the issue of the minimum and maximum amount of money that can be awarded by the arbitrator. By way of background, in most personal injury lawsuits, a defendant will only have a certain, limited amount of insurance coverage available to pay a settlement or satisfy a judgment. The defendant’s attorneys favor arbitration because it allows them to make certain that, no matter the outcome of the case, their client (i.e., the insured defendant) will not be personally financially exposed over and above the amount of available insurance. Thus, most arbitration agreements in personal injury lawsuits will provide that under no circumstances will a plaintiff be able to collect more than the available amount of insurance. On the flip side, a plaintiff’s attorney will want to guarantee his or her client a recovery, even if the case is lost at the arbitration (i.e., if the arbitrator awards “$0.00” in damages, or dismisses the case for lack of liability), and can thus negotiate a minimum recovery for his or her client.

Of course, arbitration agreements, and the decision to enter into one at all, are unique to each individual personal injury case. If you have a case, you should discuss whether your particular case is one in which an arbitration might be beneficial with your personal injury lawyer, as he or she will be able to best advise you given the particularities of your case. To contact a Bronx personal injury lawyer to discuss whether your case might benefit from an arbitration, rather than a jury trial, contact us today at (718) 354-8000.