What is Arbitration and How can it Affect My Personal Injury Claim?

Not many people read all the fine print when entering into a contract for services. This can lead to a person being forced into a dispute resolution method that is disadvantageous in terms of receiving damages when the person is injured through the actions of another person. Arbitration is one example of a dispute resolution process that is usually included in service contracts, including those for nursing home care. Unfortunately, many people agree to this form of resolution because they do not understand what it means.
Arbitration clauses or agreements in a contract usually require the parties to the contract to agree that in the case of a dispute, the parties will have to go to arbitration instead of filing a lawsuit in a court. Arbitration is a process in which the parties present their cases to a person known as an arbitrator, who then makes the final determination on how the dispute will be resolved. Sometimes instead of one arbitrator, the parties may present their case to a group or panel of about three arbitrators.
Arbitration is usually favored by defendants because the award granted to an injured plaintiff who proves his or her case is far less than the plaintiff would receive in a jury trial. A plaintiff is also less likely to receive punitive damages, damages awarded to a plaintiff when the defendant’s conduct is particularly shocking, from an arbitrator. Juries are more likely to award punitive damages if the case goes to trial.
In addition, depending on the form of arbitration to which a person agrees, there are limits to how and when the person can appeal an arbitration award. If the arbitration is binding, the injured person is agreeing to accept the decision of the arbitrator, and in most cases can only appeal if there is a mistake in the application of the law. An appeal based on a low award may be foreclosed by binding arbitration. Non-binding arbitration allows the parties more freedom to go to court and seek review of the arbitration award.
The option of going to trial can also prompt the defendant to enter into settlement talks with the plaintiff. Settling instead of going to trial can save time and still allow an injured plaintiff to receive reasonable compensation to cover the cost of his or her care and recovery.
Of course, not everyone has a chance to negotiate the terms of their service contract, especially when trying to get into a nursing home that is in high demand. Some people may feel pressured into signing the contracts for fear of losing the opportunity to receive what they perceive as the best care. When a person has signed a contract requiring arbitration, it does not always mean this is the only way to proceed. There may be ways to challenge the validity of the contract and void the arbitration requirement. It is important to speak to an experienced personal injury attorney before submitting to arbitration or giving up the claim.