Mandatory Arbitration Rules (MAR) - Changes under HB 1128
For the last couple of years, the lobbying arm of WDTL and several defense attorneys who testified in front of the Legislature, defeated proposed changes to the Mandatory Arbitration Statute. This year however, the Plaintiff’s Bar took advantage of a change in the make-up of the Legislature whereby the Democratic Party took control of both Houses of the Legislature, as well as this year’s “short session” to pass significant changes to Mandatory Arbitration – now called Civil Arbitration. These changes will go into effect September 1, 2018. The timing of implementation of these changes coincides with the timeframe for new Court Rules to go into effect. The new rules apply only to those cases filed on or after September 1.
In the opinion of many defense attorneys, these changes are going to make pre-arbitration decisions and defending these cases more challenging.
Here are the highlights:
Civil Arbitration is mandatory in counties whose population exceeds 100,000. For other counties, the Superior Court may authorize it by majority vote.
If approved by two-thirds of the Superior Court Judges for the County, the jurisdictional maximum will be raised from $50,000.00 to $100,000.00 exclusive of interest and costs. The new jurisdictional maximum will expose more defendants to an excess award/judgment, thus potentially resulting in personal liability.
Except by Stipulation or for good cause shown, the Arbitrator “shall” set the hearing no sooner than 21 days, nor later than 75 days, from the date of assignment to the arbitrator. This is an increase from 63 days. Parties may now stipulate to a non-attorney arbitrator.
The only discovery allowed after assignment of the case to the arbitrator is: a) Requests for Admission, b) Request for a CR 35 exam and c) Deposition of another party. All other discovery (including interrogatories, subpoenas for records, additional depositions) must be requested from the arbitrator. This rule may make it more difficult to obtain medical records by Subpoena, if Plaintiff does not consent to a medical authorization for the release of records. Local Court Rules should be consulted to determine what, if any, impact placing the case into Civil Arbitration has on pending discovery.
Within 20 days of the award, any party may file for a trial de novo. If the award is not appealed, a judgment shall be entered and have the same force and effect of other civil judgments. The filing fee for a de novo appeal is raised from $250 to $400.
The Notice of Appeal must be signed by the Party (i.e. the insured in most cases). This could potentially have a devastating impact on an Insured in an excess award situation. If for some reason the client is not available to sign the Notice, then an appeal would not be able to be filed under the express terms of the new rules.
At any time prior to 30 days before trial, a nonappealing party may serve an offer of compromise. If the offer is not accepted within 10 calendar days of service, the amount offered replaces the amount of the arbitrator’s award for determining whether the appealing party has bettered their position.
Clearly these changes dramatically change the landscape for the $50,000.00 to $100,000.00 case. There may be an opportunity to prevent the implementation of the higher jurisdictional amount in some counties if a significant number of the Superior Court judges can be convinced that these changes would not result in a reduction of their dockets since the raising of the jurisdictional amount must be approved by two-thirds of the judges.
Even if that is accomplished however, the other changes will still be implemented on September 1.
There are other changes to Arbitration in the law, primarily the application of these rules to certain family law cases. To see the actual language of the bill and changes, please refer to Engrossed House Bill 1128.