Will an Arbitration Clause Be the End of Your Personal Injury Lawsuit?

Monday, February 27, 2017

Will an Arbitration Clause Be the End of Your Personal Injury Lawsuit?

Written by Malman Law, reviewed by Steve J. Malman.

There are various cases in the news as of late that have been forced into arbitration. This is because more companies are using arbitration clauses in their standard contract wording. Everything from nursing home agreements to gym membership consent forms are utilizing the arbitration clause.

Companies believe that these terms are less expensive to issue, and they assume it protects them if they find themselves facing a personal injury lawsuit later. When you sue a business entity, you may be forced into a mandatory arbitration to resolve your lawsuit rather than taking your claim to court.

Small Print in the Contract

Arbitration clauses are typically thrown in near the end of the contract and are often considered the “fine print.” Arbitration clauses are notoriously hidden but will require you to go through mandatory arbitration if you have a disagreement with the party. By signing the contract, you agree to this mandatory arbitration requirement.

Arbitration may be binding or non-binding. If binding, the participants are forced to follow the arbitrator’s decisions, and the courts enforce those decisions. If non-binding, either party may reject the arbitrator’s decision and take the dispute to court for an official ruling. Most contracts have binding arbitration.

What Does Arbitration Mean?

Arbitration is a conference meeting instead of a court trial. They are less formal but have an arbitrator overseeing the case. Unlike mediation, decisions made during arbitration are legally binding and cannot be reversed.

These are designed to bring down the costs of a lawsuit, especially compared to traditional litigation. The purpose of arbitration is to come to a solution for both parties – mostly, no party outright wins like in a trial.

There Are Advantages to Arbitration

While plaintiffs may be forced to go to arbitration, that does not mean that they will lose their cases. In fact, plaintiffs may be successful in their suits through the arbitrator. Arbitration is faster than taking a personal injury claim to trial, and the process is more efficient. When you go through arbitration, you may find that there is less hostility than in traditional litigation.

The Disadvantages of Arbitration

Arbitration has its disadvantages, too. These disadvantages are a primary reason why you should never sign a binding arbitration agreement unless you are prepared to go through arbitration. Unlike a court ruling, you cannot appeal the arbitration decision. Therefore, if the arbitrator does not rule in your favor, you have on further options for seeking compensation or overturning that decision.

Also, arbitration does not allow automatic discovery. Therefore, the other side is not obligated to share their evidence with you prior to the arbitration meeting. In some cases, arbitration costs could exceed the cost of going to court.

How Much Does Arbitration Cost?

The costs of arbitration vary, but you will encounter multiple fees for having to go through arbitration. You will have your attorney’s fee, the arbitrator’s fee, filing fees, administrative costs, and more.

The Clause and Your Personal Injury Lawsuit

If you have an arbitration agreement in your contract with a company, and you choose to sue that company for a disagreement, you could be subject to arbitration instead of trial or other routes. If your case is subject to arbitration, your outcome and process will be much different than a traditional lawsuit. Instead of preparing a case with evidence to support your claim, your attorney will be collecting evidence to negotiate the best offer possible.

What you must realize, however, is the other party will get something in return for agreeing in arbitration. The ruling of the arbitrator is final; so, your attorney must ensure that he or she receives the best outcome possible during the process.

The good news is that the rules of evidence are much more relaxed during arbitration. Your attorney will not have to go through the usual verification procedures, and sometimes evidence that is not allowed at trial can be used to convince the arbitrator to rule in your favor.

Arbitration Clauses Are Not the End of Your Lawsuit

Even if your contract with a company has a binding arbitration agreement, and you signed that agreement, the arbitration clause is not the end of your lawsuit. Your attorney still has options for negotiating a settlement; in some cases, the other side will agree to settle despite arbitration clauses in place.

However, you must speak with an attorney if you have an arbitration agreement in place. There are different procedures when these clauses are in place, and it is imperative that you work with an attorney who has experience handling personal injury claims with arbitration agreements in place.

Protecting Yourself from Arbitration Clauses: Read the Print

Before you sign a contract, it is necessary that you read all of the fine print. If there is an arbitration clause, consider your options and decide if you feel it is worth it to go through arbitration if a disagreement were to arise. Also, remember that contracts are negotiable. In some cases, you can walk away or state that you will not agree to an arbitration clause.

If you were injured and plan to file a suit, but have an arbitration clause in place, contact Malman Law to discuss your options. Our injury attorneys have experience with arbitration cases and clauses, and we can help you still reach a favorable settlement. Schedule a free consultation now by calling our offices or requesting your appointment online.