How Does Arbitration Work in an Accident Claim?

July 13, 2022

After a crash, victims often seek compensation for their damages in claims against the at-fault party’s insurance company. Although most injury cases are resolved through settlements negotiated out of court, the legal process takes time. Some victims may not want to wait months or years for their case to settle. Could pursuing an alternative dispute resolution like arbitration sometimes be a good option? High Stakes Injury Law take a closer look at arbitration, both the advantages and disadvantages and how it works in an accident claim. If you have been injured by another driver’s negligence, you may be eligible to recover compensation for damages. After filing a claim, the liable insurance company may try to recommend you resolve your claim through arbitration. However, before considering any type of alternative dispute resolution (ADR), we strongly recommend discussing all your legal options with a licensed attorney first. Our experienced auto accident attorneys in Las Vegas are prepared to help you seek maximum compensation for your lost wages, medical costs and other losses.

What is Arbitration and How Does it Work in a Car Crash Claim?

Arbitration is an informal legal process that is different from either a settlement negotiation or a jury trial in a courtroom. One person, or a team of individuals, are appointed to be neutral third parties. The appointed arbitrator hears from both parties, weighs on all factors presented and makes a decision. There is no courtroom, judge or jury to preside over arbitration, so the process feels more relaxed.

Choosing the Arbitrator

Both parties have a say in selecting the arbitrator. That said, arbitrators are often recommended for their legal experience, such as a retired judge or lawyer.

Opening Statements

After an arbitrator is selected, each side is given an opportunity to make an opening statement describing their claim and the outcome they are seeking. For instance, the injured party could state a settlement amount they are seeking for the damages.

Presenting Evidence for the Case

Each side must also present evidence that supports their claim. This could include, for example, medical invoices, repair costs for a vehicle and more.

The Decision is Made

After the arbitrator hears both sides of the case and all evidence is presented, he or she will consider the case as a whole and decide the outcome.

Is an Arbitration Decision Final?

That depends. Prior to beginning the arbitration process, both parties have the opportunity to agree on whether the outcome will be binding or non-binding. With non-binding arbitration, either or both sides can request to decline the decision and move immediately into settlement negotiations. If arbitration is binding, however, the decision is final. Typically, it is very difficult to appeal a decision from binding arbitration.

Advantages and Disadvantages of Using Arbitration

Using arbitration to resolve a car crash claim has advantages and disadvantages. The pros of resolving a case through arbitration include:

• Your case can be resolved much quicker so you can get the money you need faster
• The cost is much less than if you must pursue your case in a trial
• It is a more relaxed legal process, so it is easier and less stressful to present your case

There are also disadvantages to using arbitration to resolve a car crash claim:

• A professional, who may or may not be biased, decides your case instead of a jury
• You do not get the opportunity to be heard in court
• The arbitrator does not get the opportunity to directly listen to and assess witnesses
• The discovery process is limited to keep the costs low
• If the decision is binding, there is little opportunity to appeal it

It is also important to point out that you can, and should, be represented by an attorney in arbitration.

Are Settlement Amounts in Arbitration Negotiable?

Yes. Agreeing to try to resolve your case through arbitration does not bar your ability to negotiate a settlement. That said, it is the arbitrator’s job to ensure your case does not drag on too long.

Does Nevada Have Arbitration Laws?

There are rules, called Nevada Arbitration Rules (NAR) that define how arbitration works in the state. For instance, one of the rules says that the court can issue an order for any case to go to arbitration. This NAR order makes arbitration a mandatory first step to try to resolve your case. That said, the decision is non-binding. This type of order may be more likely if the assessed value of a case is deemed to be greater than $50,000. Nevada also has laws that define arbitration clauses in car insurance policies. Specifically, under Nevada Revised Statute (NRS) 690B.017, if an auto insurance policy has an arbitration clause, it is not binding on the insured. It is also not binding on any injured victim who makes a third-party claim against that policyholder's insurance.

Do I Have to Consider Arbitration for My Car Crash Claim?

That depends. First, you need to find out if your insurance policy has an arbitration clause. The next step is to determine whether that clause is enforceable. If it is, you would likely have to attempt arbitration first, although the outcome is non-binding.

When is an Arbitration Clause Enforceable?

Under NRS 597.995, an arbitration clause may be mandatory and enforceable if the language of the contract specifies that both parties knowingly agreed to participate in arbitration if there is a dispute. Sometimes the court may determine that one of the parties in the contract had unfair bargaining powers or may have asserted undue pressure. In this situation, the clause may be deemed unconscionable and therefore arbitration may be unenforceable.

Why Having an Attorney May Benefit Your Claim, Even in Arbitration

Most people do not have an in-depth understanding of arbitration in a car crash claim, including when it may or may not be beneficial. A qualified and experienced attorney has extensive knowledge of arbitration laws. An attorney can also review the details of your situation and help determine whether arbitration may be a good strategy to get you the compensation you need. Get started on resolving your claim today by contacting High Stakes Injury Law. We are a trusted law firm that has your best interests in mind. We are always prepared to fight for maximum compensation on behalf of our clients. An initial consultation is completely free, and there are also no upfront costs to hire our services. We only get paid our fees if we win compensation for you.