Enforcement of Arbitration Clauses in Medical Mal-Practice and Underinsurance Coverage on Automobile Policies.
In recent years, most contracts have become very inclusive of arbitration provisions to mandate arbitration over a jury trial. Arguably, this takes away from victims rights to have a jury decide the damages–something our fore fathers likely never envisioned changing. But, it has. The reality is that arbitration clauses limit a person’s ability to become litigious. Real estate contracts now have provisions that mandate arbitration. Often, the rules of evidence are relaxed, the arbitration is quickly performed, the costs are less, and it is final in its’ adjudication. Sadly, this wave of alternative dispute resolution has certainly kept the court rooms from being inundated with contractual disputes, but has also taken such a strong right away: the right of your neighbors to hear your dispute on the merits and make an appropriate value decision.
In the context of automobile insurance cases, binding arbitration is mandated in certain policies. Why? It saves the carrier money to arbitrate a matter over litigating it in court. It also takes away the “jackpot” that juries can sometimes award–even when justice requires. This is problematic. Often, the 1st party coverage does nothing to discuss terms of the arbitration. It requires you arbitrate, but leaves out the important and sometimes crucial terms. Thus, an attorney should argue, that the missing terms must be interpreted to fall under regular court rules.
For example, if a policy of insurance mentions an arbitration clause, but fails to state whether costs and attorney fees would be available to the prevailing party then the default would be the state civil procedure rules as they apply in a regular jury trial. Also, who must pay for the arbitration? Is this something the person seeking the justice must pay, or must the defendant pay or must they split the costs? The costs can run up to many thousands of dollars depending on the complexity of the arbitration.
More and more people are now finding these sneaking clauses in their doctor’s offices. I had a client who went in for an elective medical procedure (plastic surgery) and noticed this odd statement that she is is giving up her rights to a jury trial if she signed the bottom line. Other people are now finding this adhesion provision in the contract that they must accept if they want the necessary service. Some would argue this is merely an insurance requirement by the mal-practice carrier, and it just might be. Sadly, our own congress set out to limit everyones’ rights by voting for a Federal Arbitration Act that severely limits a person’s contractual rights. If you have been involved in an accident or are now facing an arbitration Call Benson & Bingham today.