Preparing for What is to Come: Washington raises Mandatory Arbitration limits to $100,000 starting this Fall!

Author: Brittany Torrence

Guest Editor: Jessica Heppenstall

August 6, 2018 9:00am

Generally, in Washington State, civil cases involving claims less than $50,000 are referred into the court-sponsored “mandatory” arbitration program (MAR). Many cases are already referred to MAR, as research indicates the average bodily injury claim is approximately $15,000, plus property damages and pain and suffering. As such, cases alleging more than $50,000 are not MAR eligible. However, Washington’s legislature has just passed House Bill 1128[1], to be in effect on September 1, 2018, increasing the limit from $50,000 to $100,000. When the new law is effectuated, almost every case will be referable to MAR. For instance, currently, if a plaintiff alleges over $50,000 in bodily injury damages claims arising out of an auto accident, their claims would not be referred to MAR, and instead would be slated for trial. But, with the implementation of a higher limit, any case under $100,000 may be referred to MAR, to which the consequences could include a total reversal on how defense attorneys initially approach a case.

Prior History of House Bill

Washington State has been the frontrunner for the enactment of legislation requiring MAR for civil cases. Since 1979, Washington has increased the MAR limit from $15,000 and up. However, under the Revised Code of Washington (RCW) 7.06, the MAR limit remained at a consistent $50,000. After many years, in 2015, Washington’s legislature attempted to increase the limit of MAR in HB 1248 from $50,000 to $100,000. This bill was introduced and debates were held on the matter, but ultimately HB 1248 did not make it out of the committee.

Current Status of MAR with $50,000 Limit

After years of debate, Washington defense trial attorneys were defeated in 2018, wherein Washington State’s House and Senate passed HB 1128 raising the maximum MAR limit to $100,000. On March 13, 2018, Washington Governor Jay Inslee signed into law revised RCW 7.06 instituting the provisions of HB 1128, and it will take effect in September 1, 2018. During the years of heated debates on the matter, plaintiffs’ attorneys have argued in support of an increase in limits for mandatory arbitration because it is generally less expensive (and quicker) than a trial and promotes access to justice for small cases. However, defense attorneys have refuted that argument by indicating cost increases associated with this additional hurdle to a jury trial, and increased biases against defendants, wherein arbitration severely limits the defense’s access to discovery. Nevertheless, the main objective for the MAR limit increase rested on the hope it would take some of the burden off the overloaded court system.[2]

As such, each Superior Court County with over 100,000 residents has been given the parameters of HB 1128 to raise mandatory arbitration limits, and has begun voting to adopt these provisions. Depending on the county, if approved by two thirds or greater of judges of a given Superior Court County, courts will adopted the provision expanding the monetary jurisdictional limitation on claims to $100,000.

Effect of HB 1128 Implementation

HB 1128 is adverse to defense trial attorneys and insurance carriers alike. Currently, defense attorneys may access plaintiff’s records and information upon demand with regard to damages, and upon request for medical records and treatments. After the implementation of HB 1128, access will be more stringent. HB 1128 institutes various changes to the MAR laws concerning the cases subject to mandatory arbitration, the time periods for setting hearing dates, permitted discovery, arbitrator qualifications, and filing fees.[3] Accordingly, one of the most impactful modifications made under HB 1128, will be that defendants can no longer demand a specification of damages.[4]

HB 1128 changes made to MAR laws are as follows:

  1. Institutes relaxed rules of evidence pertaining to sworn statements and reports in lieu of live testimony for witnesses.
  2. Institutes their own procedural rules regarding timing of an arbitration hearing.
  3. Institutes their own parameters for discovery, including authorizing medical examinations of parties, and interrogatories to parties.
  4. Institutes automatic right of an appeal to either party if they are not happy with the result but requires a notice of appeal from arbitration to be signed by the appealing party, in addition to their attorney.

Additionally, the $100,000 arbitration limit applies to each claimant in MAR; thus, when there multiple claimants in one lawsuit, each claimant will be entitled to claim the maximum MAR limit.[5] Thus, MAR will not be limited to low-value cases, and the amount for determination by an arbitrator will be raised.

Takeaway

Plaintiff attorneys are patiently waiting for HB 1128 to come into effect so they may file under the new statute and start off each case in a great position to force mandatory arbitration and limit defense attorney’s abilities to defend against higher bodily injury claims. Thus, in preparation of HB 1128 and the pending modifications to MAR, defense attorneys and insurance carriers must be prepared to strategically combat MAR restrictions by using MAR arbitration motions to secure additional discovery and by using expert testimony earlier on in a given case.

 

[1] House Bill 1128, Washington State Legislature, http://apps2.leg.wa.gov/billsummary?BillNumber=1128&Year=2017&BillNumber=1128&Year=2017.

[2] See Christie-Lambert Van & Storage Co. v. McLeod, 39 Wn.App. 298, 302, 693 P.2d 161 (1984) (The primary purpose of raising the mandatory arbitration limit was to alleviate court congestion and reduce delayed hearings).

[3] House Bill Report HB 1128, http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bill%20Reports/House/1128%20HBR%20APH%2017.pdf.

[4] Id.

[5] See Twitchell v. Kerrigan, 175 Wn.App. 454, 463, P.3d 1025 (2013).

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