Dec 5th, 2018

Update on the New Ceiling for Arbitration Awards in Washington

Suzanne Pierce

Heather Beasley

Washington State’s statute regarding jurisdictional limits for mandatory arbitration of civil suits, RCW 7.06.020, was amended earlier this year to allow counties to impose mandatory arbitration on civil cases in which the plaintiff sought $100,000 or less (previously $50,000 or less). This change resulted from years of lobbying by the plaintiffs’ bar. The change was discussed in a firm blog in March of this year. (See Breaking News House Bill 1128 Expanding MAR Passes Through Washington Legislature).

The new limits for mandatory arbitration have been adopted on a county-by-county basis, with a rather slow start. To date, fewer than half of the counties have adopted the higher limit. For those that have adopted the new limit, it applies to cases filed on or after September 1, 2018. For plaintiffs wishing to enter into the mandatory arbitration program but who filed before that date, if the statute of limitations has not expired on their claim, they can consider voluntarily dismissing the suit and refiling to trigger mandatory arbitration under the new limit. As with the previous arbitration limit, whether a plaintiff wants to go to arbitration is a unilateral decision made by the plaintiff, because the plaintiff gets to dictate what amount of damages is in controversy.

Other than the damages ceiling, the remainder of the arbitration process has largely remained the same, including the right of any party to seek a jury trial de novo in Superior Court if the party is dissatisfied with the arbitration result. The request for a trial de novo must be signed by the party. So, where defense counsel is representing an absent insured, the defense cannot appeal because the actual party, the insured, is not available to sign the request.

The rule still exists, too, that if the party seeking the trial de novo does not better its position at the jury trial, it must pay the other side’s attorney fees incurred after the arbitration award. This rule is intended to discourage requests for a trial de novo, thus fulfilling the legislature’s purpose of keeping smaller value claims out of the court docket system.

Arbitration has more restrictive discovery than court litigation: very few interrogatories, just a single deposition per side, and usually no IME. (Parties may request additional discovery from the arbitrator, who has substantial discretion in deciding whether to allow it.) This frequently weighs to the benefit of the plaintiff, as the defense may not be allowed to obtain information needed to fully assess the damages issues. On the other hand, arbitration usually relaxes the ordinary evidentiary rules, which can benefit a defendant relying on expert opinions: the expert’s report may be allowed as-is in arbitration, where a court would require the expert’s live, expensive testimony. The lawyer-arbitrator might be less emotionally sensitive than a jury to the absence of a defendant (e.g., in an auto collision) or admitted liability, which can also benefit a defendant.

The result of this change in the arbitration limit will likely be that more civil cases end up in mandatory arbitration. Arbitration is faster, simpler and cheaper, which can make it an especially attractive process for personal-injury plaintiffs. Whether the results at the higher limit will favor plaintiffs remains to be seen.