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Personal Injury 101: What is Arbitration?

Alternative Dispute Resolution

If you have filed a personal injury lawsuit against a negligent party that caused your injuries, you may, at some point in litigation, be informed that the case is going to arbitration.  So what is arbitration?  It is a form of dispute resolution outside of the court system.  It can be either binding or non-binding – meaning the decision is either final or open to rejection by either side.  If a non-binding arbitration award is rejected, the case will continue on toward trial.  

The arbitration can be viewed as sort of a mini-trial, with both sides submitting a written brief and submitting evidence for the arbitrator to review. Private arbitrators are usually attorneys or retired judges. If the arbitration is court-ordered, the court will maintain a list of approved arbitrators for the parties to agree upon.  

Watch the YouTube video. The clip below, posted by Law Shelf,  further explains this dispute resolution process.

The Arbitration Process

A lot of times, arbitrations are designated by contract as the way any future conflict will be resolved. For instance, in medical malpractice cases, there are often clauses in health insurance policies that say any such dispute will be decided by arbitration. These contractual arbitrations are usually binding, meaning the arbitrator’s decision is final. By signing the original contract with the health insurer, the plaintiff has waived their right to a jury trial. 

The arbitrator’s role is that of an impartial finder of fact. He or she will read the submitted written briefs, review the documents submitted as evidence, and hear testimony.  After the arbitration is complete, the arbitrator has a period of time – in some cases, 30 days – to render an opinion on liability and monetary damages.  This opinion is called the Award of Arbitrator. The award is filed with the court, and a judgment will be entered thereafter, concluding the case.

Different Types of Arbitration

Not all arbitrations are the same.  Below we take a look at some of the different types of arbitration hearings. 


A high-low or “bracketed” arbitration is a proceeding in which the parties have agreed to award parameters in advance. The parties’ high and low numbers are usually not revealed to the arbitrator. If the arbitrator’s award is less than the parties’ low number, the defendant will pay the agreed-upon low figure.  If the arbitrator’s award is more than the parties’ high number, the plaintiff will accept the high number that the parties chose in advance. If the arbitrator’s award is between the two numbers, the amount of the arbitrator’s award is what the case will settle for. 


A less common form of binding arbitration is known as baseball arbitration. Each party chooses one settlement amount, and the arbitrator selects one of those numbers as the arbitration award.


Sometimes arbitration is used as more of an advisory opinion rather than a binding decision. While the proceeding is conducted in a similar fashion as binding arbitration, a party unhappy with the award can choose to continue toward a separate binding arbitration (with a different arbitrator) or trial.  


Judicial, or court-ordered, arbitration is mandated by civil codes – in California Superior Courts, cases with amounts at issue of less than $50,000 are subject to the court’s arbitration process. The judicial arbitration is non-binding and functions as an advisory process. It usually takes place in the early stages of litigation and is designed to save the court’s time in hopes that the case can be settled before trial. Often, however, one party will not accept the award and prepare a document called a Request for Trial de Novo. This means the case will continue on in the court system toward jury trial. 

Sacramento Car Accident Lawyer

Thanks for reading our article “What is Arbitration?”. I’m Ed Smith, a Sacramento, California car accident lawyer. Retaining an experienced attorney to handle your personal injury case can relieve a lot of stress and leave you the time and energy you need to focus on your physical recovery and return to good health.  If you are frustrated by evasive insurance adjusters and would like to speak with an expert to learn more about your rights and discuss whether our injury lawyers can add value to your case, call us at (916) 921-6400 or (800) 404-5400. We will be happy to dispense free and friendly legal advice. If you prefer, you may send your inquires via our website.

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