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Washington Updates “Mandatory” Arbitration Statute

Posted Wednesday, July 18, 2018 by Christopher L. Thayer

In Washington, civil cases involving claims less than $50,000, which are filed in Superior Court, are referred into the court-sponsored “mandatory” arbitration program. Under this process, an attorney with at least five years of experience is appointed as the arbitrator to decide the issues in the case. There are relaxed rules of evidence and the parties may submit sworn statements or reports in lieu of live testimony for witnesses. It is generally a much less expensive way to resolved modest claims, as the hearings typically only take one day. Either party has an automatic right of an appeal if they are not happy with the result.

The Washington legislature has adopted new provisions expanding the monetary jurisdictional limitation on claims and modifying the procedures. The changes go into effect on September 1, 2018. A summary of the changes to the laws are as follows:

• Removes all references to the word “mandatory” throughout the arbitration laws, replaced with “civil” in some instances.

• Increases the maximum arbitration limit from $50,000 to $100,000 - if approved by the superior court of a county by two thirds or greater of judges.

• Adopts procedural rules for the timing of an arbitration hearing and permissible discovery, including authorizing medical examinations of parties – where appropriate.

• Sets qualifications for a person serving as an arbitrator. Requires a notice of appeal from arbitration to be signed by the appealing party (and not just their attorney).

• Increases the arbitration filing fee from $220 to $250, and the appeal filing fee from $250 to $400.

The increase from $50,000 to $100,000 for the jurisdictional limits will open up a much larger range of cases to the arbitration program, and presumably take some of the burden off the overloaded court system. As court-sponsored arbitration is generally far less expensive (and quicker) than a trial, this change will, in general, benefit litigants.

The requirement that a party must actually sign the appeal notice will be interesting to watch. This was added in the context of personal injury cases, where attorneys for defendants are being paid for by defendants’ insurance company. Anecdotally, insurance companies were instructing their attorneys to file appeals of arbitrations without consulting with their insured. As most people are not interested in having their lives tied up in litigation, it is likely many people would not consent to an appeal – so long as their insurance company is paying for the claim. It also seems likely insurers will start adding provisions to Washington insurance policies – requiring their insured to consent to any appeals where recommended by the insurer to address this situation.

If you have any questions about Washington’s “Mandatory” Arbitration process, please feel free to contact managing member Chris Thayer at (206) 805-1494 or at CThayer@PivotalLawGroup.com.