Arbitration of Car Accident Claims

Learn the basics of taking a car accident claim to arbitration, plus the advantages and disadvantages of the process.

Arbitration is an alternative dispute resolution (ADR) process in which an agreed-upon person -- the arbitrator -- hears evidence and decides the result much in the same way that a judge would in court.

In a car accident case, an arbitrator will decide a number of key questions. Do you recover money damages from the other driver? If so, how much do you recover? Arbitration usually saves the parties time and money, compared to taking a case to court. And much like a court judgment, all parties are bound by the arbitrator's decision.

Arbitration is different from car accident claim mediation, with the main variant being that a mediator only tries to facilitate a resolution between the parties. The mediator has no authority to rule for either side, while the arbitrator does have that power.

The Agreement to Arbitrate

Arbitration only occurs when both sides agree to it. You can't force the insurance company to go to arbitration, and they can’t usually force you to go. These are the key things to agree on:

  • Who will the arbitrator be? The arbitrator can be a retired judge, an experienced lawyer or anyone else that you and the insurance company can agree on. There may be arbitration groups in your area who can recommend arbitrators. Another way of selecting the arbitrator is to get the insurance company to suggest several possible arbitrators and then check out those suggestions. Read about the potential arbitrator online. Perhaps go to or call the courthouse and speak to people, asking about the person's reputation. Pick someone that has a reputation for fairness and integrity.
  • The decision of the arbitrator will be final and cannot be appealed. You are going to arbitration to save the time and money that going to court would require. You certainly don't want to get a favorable arbitration award only to have the insurance company overturn it or delay paying a car accident settlement by filing an appeal .
  • There will be no technical rules of evidence at the arbitration. Among other things, this means that you can use documents such as medical records and bills without bringing medical experts to the arbitration to be witnesses. Make sure you can also use documents, such as pay records, to prove your loss of income instead of calling people from work to be witnesses.
  • You may want to agree on a "high-low" agreement. Even if you don't, the insurance company will probably insist on one before they will agree to arbitration. A high-low means that no matter what the arbitrator decides, you will not recover more than the "high" or less than the "low" figures. For example, if you agree to a "low" of $5,000 and a "high" of $15,000, you would get $5,000 even if the arbitrator awarded less than that, but you would receive only $15,000 if the arbitrator awarded more. If the arbitrator awards something between the high and the low, you get the amount awarded. The arbitrator is not told about the high-low agreement.
  • How will the costs of arbitration be paid? While there may be a small administrative fee, usually the only cost of arbitration is the arbitrator’s fee -- which will probably be based on the amount of time the arbitrator spends on the case. Will you divide the arbitrator's fee equally? Will the loser pay? If so, how do you decide who won and who lost?

One of the advantages of arbitration is that the process can take place much more quickly when compare with a court trial after the filing of a car accident lawsuit.

What Happens at Arbitration?

An arbitration is structured like a trial, but the procedures are less formal.

First, you can make an "Opening Statement," in which you tell the arbitrator about your case. The other side can do the same.

Next, you put on your evidence. You testify, usually under oath, and explain your case -- how the accident happened, why the other driver is at fault for the car accident, and what damages you have incurred. Put into evidence documents such as your medical records and bills and your statement of lost income. You can also call witnesses to the accident and family members who can testify about how your injuries have affected you.

Next, the defense presents its evidence. You can cross-examine any witnesses called by the defense, if you wish.

After the evidence is presented, you can make a "Closing Argument" in which you explain what you have proven and describe the decision (usually called an "award") that you want the arbitrator to make. The other side also has a right to make a Closing Argument.

The arbitrator may not decide the case on the spot. Especially if there have been documents -- such as medical records -- introduced into evidence, the arbitrator should take time to review all the documents and other evidence presented. You can probably expect a written decision within a few days after the arbitration ends.

Arbitration Tips

  • Carefully prepare for the arbitration in advance. Remember, if your claim is worth bringing, it's worth winning. Plan what you want to say when you testify, organize the exhibits that you will put into evidence, go over testimony with any witnesses that you will call, decide what questions you want to ask the insurance company's witnesses when you cross examine them. Plan your Opening Statement and Closing Argument carefully to make sure they are persuasive.
  • Pictures are worth a thousand words. Use photos, drawings and diagrams as exhibits to make your points. Use photos of such things as the accident scene and devices such as support braces that you had to wear (or put the device itself into evidence).
  • Anticipate what the insurance company will argue and be prepared to rebut the arguments. You know what their arguments are from the discussions you have had with them.
  • If the insurance company has a lawyer present its case at arbitration, don't be intimidated. You have a big advantage over that lawyer. You lived through the situation, and you know the true facts.
  • To impress the arbitrator, be prepared and sincere. Don't exaggerate. Stick up for your point of view, but stay in control. Argue the facts. You wouldn't be pressing your case if the facts didn't support your point of view.

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