Is Arbitration Required for an Auto Accident Injury?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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Whether or not you need to go to arbitration for your car accident injury will depend on a number of factors. If you are receiving compensation from your own insurer, you may need to go to arbitration if you have signed an arbitration clause as part of your purchase of insurance. In other circumstances, some states require that cases be submitted to arbitration or some other form of alternative dispute resolution (ADR), like mediation, before a court will be willing to hear the case. For example, the state of Minnesota requires a case to first go through ADR before it can be brought to trial. 

What Is Arbitration?

Arbitration is a way of resolving a dispute that does not involve going to court. Instead, the parties to the dispute (in this case, it would be the insurance company and the policyholder) tell their side of the story to a neutral third party called the “arbitrator.” The arbitrator then decides what is a fair settlement and both the insurer and the policyholder are bound by that decision and must accept it as final.

Arbitration clauses occur commonly in contracts that you sign every day, including the contract you may have signed when you bought insurance. These clauses exist because they are seen by most companies as a way to protect their interests. When a case is arbitrated, the insurer won’t have to worry about a very sympathetic jury awarding huge sums to a plaintiff. In many cases, the company can also better control its costs for legal services through arbitration. Check your policy to see if your claim is required to go to arbitration rather than to court. If you have such a provision in your insurance clause, arbitration may be your only option for recovering any money from the insurer, since the court will enforce that arbitration clause in almost all cases. 

Non-Binding Arbitration

Even if you don’t have an arbitration clause, you may still find yourself arbitrating your car accident injury based on the orders of the court to do so. While in many cases this is non-binding arbitration (meaning you are not required to accept the decision as final), as opposed to binding arbitration that comes with an arbitration clause, it may still be in your best interests to accept the decision on compensation if it is fair, rather than having to go through a protracted trial.

The best thing to do if you are uncertain about arbitrating your car accident, or about any aspect of your injury case, is to contact a lawyer who can explain your rights and help protect you.

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