Don’t Want to Go to Court? The Pros and Cons of Car Accident Arbitration

Content Reviewer, Attorney James P. Maniscalco
Created by our team of legal writers and reviewed by James P. Maniscalco. J.D.

If you’ve been in a car accident but don’t want to go to court, there is another way to recover damages from the other driver. You can enter into car accident arbitration. Arbitration is defined as an alternative dispute resolution process where an agreed-upon person – the arbitrator — hears the evidence and makes a decision based on that evidence.

The process is similar to what would happen in court in front of a judge, but arbitration does not have to take place in a courtroom. However, the decision is just as binding as if a judge decided it in court.

There are usually a list of key questions that an arbitrator has to consider in order to make an informed decision about the car accident claim. Those questions include:

  • Who is at fault?
  • Should the at-fault driver pay damages to the other driver?
  • Is so, how much?

Arbitration can save both parties time and money because the process takes place outside of court. However, don’t confuse arbitration with mediation in dealing with a car accident claim. In arbitration, the arbitrator has the power to rule for either driver, whereas in mediation, the mediator is only trying to facilitate a resolution or agreement between the two parties. The point of medication is to guide the parties to an agreeable out-of-court resolution to a car accident claim.

Why Would I Choose Car Accident Arbitration?

Pros and Cons of Arbitration

It’s cheaper and fasterYou have to find an arbitrator you and the other party agree to
It’s less stressful than appearing in courtYou may not get the full amount that an arbitrator give you if you have a high-low agreement
It usually happens quicker than a court caseYou will have to present our own case without an attorney
The decision is final and binding as a judge’s decisionIt may feel less formal than a regular court case

If you’ve been in a car accident and the other driver’s insurance company has offered you a final settlement that is much lower than what you expected, arbitration is one way to resolve your dispute.

Keep in mind that you should have valid reasons why you believe you should get more award money and be ready to back up those reasons with evidence, documentation and persuasive argument.

Although you cannot force the insurance company into arbitration, you can let them know that if they refuse, your next step would be to file a lawsuit. This action is only effective if you have a strong claim, so be sure to outline your strongest points when you are writing your arbitration request letter.

Most insurance policies allow you to resolve your dispute through arbitration instead of going through a courtroom trial in front of a judge. Car accident arbitration is worth considering because it can save you time and money. It’s simpler and faster than going to court.

What Can I Expect If I Take My Car Accident Claim to Arbitration?

General Timeline for Car Accident Arbitration

TimelineStep in Car Accident Arbitration Process
Day 1-15Filing and initiating
Day 16-45Arbitrator selection
Day 46-75Information exchange and preparation
Day 76Arbitration hearing
Day 77-85Arbitration decision award

If you decide to take your car accident claim to arbitration, the other party must also agreed to it. An arbitration is structured similarly to a court trial, but it’s much less formal because it does not take place in a courtroom.

Both sides are invited to make an “opening statement” at the beginning of the process. If it is your car accident claim, you get to state your case and outline the reasons you are requesting damages from the other party. The other driver gets to defend against any request for damages.

After that, you lay out the evidence for your car accident claim – testifying under oath about your case.

Be sure to express a logical argument for your case, and clearly present all the damages you have incurred as a result of the accident. You are also able to call witnesses to the accident to testify on what they observed, as well as family members or friends who can testify as to how the accident affected your life or your well-being.

Some of the key pieces of evidence that you should present include:

  • Medical records of any injuries or treatment as a result of the car accident
  • Medical bills incurred from the car accident
  • Statement of lost income because you missed work from the car accident
  • Photos of the accident and/or injuries

After you have presented your entire case, the other driver gets the opportunity to present his or her evidence defending against your claim. They also are allowed to call witnesses, and you are subsequently allowed to cross-examine them if you wish.

The arbitration process is then wrapped up with “closing arguments” by you and the other driver.

During closing arguments, you have one more chance to summarize the evidence and all key points about your car accident claim.

You explain one last time what you’ve proven and clearly state what you are asking for in damages – in other words, what you want the arbitrator to decide. The other driver also gets a chance to make a closing argument.

Once this process has been completed, don’t expect the arbitrator to necessarily make a decision on the spot. In many cases, the arbitrator will want to review the documents that were put into evidence and any other evidence that was presented. The arbitration decision is usually sent out a few days after the arbitration is done.

How Do We Find a Car Accident Arbitrator That We Both Agree On?

You can usually find a list of good arbitrators online by looking up “arbitration groups” in your area. The arbitrator can be an attorney, a retired judge or any professional that you and the other driver’s insurance company agreed upon.

You can also request that the other driver’s insurance company come up with a short list of arbitrators they suggest, and then do your research on those arbitrators and pick the one you like best.

How Do I Know If a Car Accident Arbitrator Is Good or Not?

The best way to find out about a possible arbitrator is to go online and find out as much about the experience and history of that arbitrator as you possibly can. You can also ask others in your community if they know about the arbitrator or what their reputation is. You want to find an arbitrator who is know for fairness and integrity with a good deal of experience.

What Will the Cost Be for a Car Accident Arbitration?

The cost for a car accident arbitration is usually much less than paying for an attorney to represent you in court. There may be a small administrative fee to pay up front, but the main cost is the arbitrator’s fee, which is usually based on the amount of time the arbitrator spends on your case. You and the other driver need to decide up front who will be paying these costs. The costs can be split down the middle, or paid for in total by the party who loses the car accident arbitration.

How Do I Know What to Ask For?

The best way to calculate the amount of damages to ask for is to look at all your bills and lost wages and add up that total. Then, if you can justify it, add in more money as damages for the effects the accident adversely had on your life – in terms of loss of activity, loss of movement, pain and suffering, or mental health issues.

Be ready to thoroughly explain these negative effects on your life during your opening and closing statements in a very descriptive and convincing way. Using emotional language can be very effective, as these are conditions that cannot be documented with numbers.

Also, keep in mind that In many car accident arbitration cases, the other driver’s insurance company will ask for a “high-low agreement.” 

A high-low agreement means that whatever the arbitrator decides, you won’t recover more than the “high” amount or less than the “low amount. The arbitrator is not aware of the high-low agreement at any time before, during or after the process.

For example, if you agree to a high-low agreement of $10,000 – $30,000, that means you would get $10,000 even if the arbitrator awarded less than that.

In addition, if the arbitrator awarded more than $30,000, you would still only get $30,000. If the arbitrator awarded an amount in between the $10,000 – $30,000 range, you would get that exact amount.

Car Accident Arbitration Tips

Remember that this is your only opportunity to present your car accident arbitration case to the arbitrator. Here are some quick tips to follow:

  • Practice your opening and closing statements
  • Go over the testimony with witnesses before the arbitration
  • Be organized with documents, records, and photos
  • Provide diagrams or professional-looking drawings to visually present your case
  • Use props if appropriate
  • Prepare your rebuttals for what you think the defense might say
  • Be sincere, authentic, and personable

Be sure to carefully prepare your opening and closing statements to be the most effective and comprehensive argument as to why you deserve to receive damages in your car accident arbitration. Practice what you plan to say in advance of the actual date of the arbitration. Speak clearly and concisely when you present your case and use emotion in your voice to be persuasive.  

Make sure that all your documents are organized and clearly marked. It’s very important to have your paperwork ready so that the arbitrator can effectively go over the numbers without getting lost in a disorganized pile of papers. Number the documents, or “exhibits,” in the order in which you will present them. Highlight any critical amounts so the arbitrator can find them easily.

Practice the testimony of any witnesses you plan to call during your car accident arbitration. Confirm with them exactly what they planning on saying and make sure that it corroborates with everything else being presented. Check with them before the arbitration to ensure that they are ready to testify and feel comfortable doing so. If you call a witness who is confusing or vague, it may actually hurt your case rather than help it.

If you know that the other driver’s insurance company will call on their own witnesses to testify, be ready with a list of the questions you want to ask them. Plan in advance for any option that can happen.

Use props and photos to make your case visually. Remember that the arbitrator was not at the scene and will need to visualize everything that happened and how it happened. Use drawings and diagrams to clearly show positioning and the point of contact. Provide photos of the damage to your vehicle. Show traffic lanes, signs or any other pertinent markers at the scene. If you had to wear any medical devices due to injuries sustained during the accident, be sure to include photos of those devices or better yet – bring those devices with you and submit them as evidence.

Think about what the other driver’s insurance company will say in defense and be ready to rebut their statements. By the time of the car accident arbitration, you should have a pretty good idea of what the other side will claim so you can prepare your rebuttal accordingly.

Be sincere and personable when you’re presenting your case in the arbitration. There will be no need to make grandiose statements or become emotionally unhinged. The arbitrator will look most favorably on someone who presents their case with facts and evidence to back it up – all in a precise and organized manner. Don’t exaggerate, but definitely emphasize your point of view in a logical and authentic manner.

Should I Really Go Through with Arbitration?

Sometimes it’s difficult to assess the strength of your arbitration case on your own. An attorney who is experienced at judging the merits of auto accident arbitration cases can help you to understand your insurance policy and how to navigate the process. If you’re considering arbitration to resolve your car accident settlement because negotiations with the other driver’s insurance company have stalled out, then it’s a good idea to talk with an attorney first to get an accurate assessment of your case.

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