Successful Examples of Voluntary Arbitration and Mandatory Arbitration

Along with public trials, another method of adjudication of lawsuits is arbitration. One meaningful difference between the two is that a case in arbitration is decided by a private arbitrator and a public trial is decided by a jury.

Many may remember attempts at health care liability reform in mid-2000. In Washington State, a compromise reform law was enacted on June 7, 2006, although many of its provisions have since been ruled unconstitutional. However, one provision that remains is voluntary arbitration.

Voluntary Arbitration

The voluntary arbitration provision allows the parties, after a civil lawsuit is filed, to elect to resolve their dispute by arbitration. If one of the parties does not agree, the lawsuit remains in the civil court system. If the parties elect arbitration, certain arbitration rules apply, such as discovery limits, a limit on the number of experts, and a process that generally results in a final decision within one year from the date the lawsuit is commenced. An award may be appealed only on a very limited basis and any award to the plaintiff is limited to $1 million. While plaintiffs tend not to elect arbitration, voluntary arbitration may be desirable to all parties due to the lower costs associated with limits on discovery and expert witnesses and the promise of a certain resolution in a shorter period of time.

Mandatory Arbitration

Mandatory arbitrations apply when a plaintiff seeks to recover $50,000 or less. Typically when lawsuits are filed in Washington State, the parties do not know the full extent of a plaintiff’s injury. Information regarding the extent of the injury is learned during discovery, such as in depositions, production of medical records and bills, or notices of an insurer’s liens. If the plaintiff believes the damages in dispute are $50,000 or lower, the case is moved to mandatory arbitration. Again, we tend not to see plaintiffs agree to limit an award if they believe there is a possibility a jury will award a higher amount, but there are certain cases that are appropriate for this process.

The courts provide a list of arbitrators who have agreed to be available for mandatory arbitrations. This may be viewed as undesirable as the arbitrators may be unknown to the parties or have limited experience in the complexity of medical negligence. However, with limited risk, it allows us to develop the next generation of defense attorneys by giving them experience presenting a case in arbitration.

In the second half of 2012, Physicians Insurance had one case resolved by voluntary arbitration and two cases resolved by mandatory arbitration. A representative example of each follows. Because arbitrations are often private matters, not of public record, we have changed all the details of the cases to maintain anonymity.

A General Surgery Case Resolved by Voluntary Arbitration

Allegation: A physician who was not insured with us performed urological surgery on a male patient. Our insured physician was called in to repair a rectal laceration, and he proceeded to repair the rectum and perform a diverting colostomy. Complications from the colostomy resulted in subsequent procedures. The patient claimed $1 million in damages consisting of medical expenses, pain and suffering, and a failed business.
Plaintiff Attorney: Confidential
Plaintiff Expert: General Surgeon
Defense Attorney: Confidential
Defense Expert: General Surgeon
Result: Plaintiff verdict for $59,000, retired superior court judge  

A Radiology Case Resolved by Mandatory Arbitration

Allegation: A patient alleged negligence from a procedure in which a hemothorax is a known complication. Approximately ten days following the procedure, the patient required a thoracentesis. The patient claimed additional medical expenses and pain and suffering, totaling $50,000.
Plaintiff Attorney: Confidential
Plaintiff Expert: Radiologist
Defense Attorney: Confidential
Defense Expert: Radiologist
Result: Defense verdict, private arbitrator

See some of our trial results.