Mandatory Arbitration Rules (MAR) - WDTL Efforts with the Legislature
In 2018, Washington state legislators sent Governor Inslee just over 300 bills that were approved during the short 60-day Regular Session. Among the measures that the Governor approved is HB 1128—a bill that will increase the dollar threshold for matters that are subject to mandatory arbitration from the current level of $50,000 to $100,000. This is the fourth year that plaintiff lawyers have pushed for the increase. The WDTL, together with the Association of Washington Business, the insurance industry and other defense-oriented stakeholders successfully defended against the passage of the plan in each of the prior three years, but the increase was approved this year. The change becomes effective for cases filed on and after September 1, 2018.
Testimony in opposition to the proposal was offered by WDTL leadership and members (including three WDTL Presidents) at every hearing in each of the last four years where the issue was considered.
In each of the last four years plaintiff lawyers have argued that the current $50,000 standard for matters that are subject to mandatory arbitration, which was set by the Legislature in 2005, is out-of-date and needs to be increased. Plaintiff lawyers have argued that the purpose of MAR is to take pressure off of the court system, by pushing matters into an alternative dispute resolution system that has kept thousands of cases off of court dockets, with a streamlined process that allows cases to be resolved in months, rather than years.
The WDTL, business groups and others stakeholders who have opposed the increase have argued that the current MAR system is unbalanced, resulting in higher claim values, increased costs, and a growing number of trials de novo. Opponents have noted that in most counties, a significant majority of arbitrators happen to emphasize plaintiff-oriented representation in their own practices, with many defense lawyers feeling that arbitrators not infrequently bring a “point of view” to their arbitrations. Opponents also pointed out that defendants tend to do better in front of real juries than they do in arbitrations—a point that was emphasized by the Torts Division of the Office of the Attorney General indicating that “approximately 60% of cases handled by the Torts Division in Superior court resolve with no payout to the plaintiff”…and that “Since 2010, only 26% of cases handled by the Torts Division in mandatory arbitration proceedings resolve with no payout to the plaintiff.” The WDTL and other stakeholders further argued that increasing the MAR standard to $100,000 involves disputes that are substantively more complicated, and that defendants deserve more time and authority for discovery, commensurate with the nature of more complicated cases. The WDTL further cautioned that increasing the MAR standard to $100,000 will likely lead to more trials de novo because of larger and more controversial arbitration awards, and greater pressure being returned to the courts to handle the appeals of disputed arbitrations.
In successive years WDTL leadership met with the key legislative leaders on both sides of the aisle in both the Senate and House to outline these concerns. Testimony in opposition to the proposal was offered by WDTL leadership and members (including three WDTL Presidents) at every hearing in each of the last four years where the issue was considered. Although these efforts were successful for three years straight, the measure was enacted this year despite the objections of opponents. The WDTL will continue to support proposals to improve the MAR system so that it provides improved procedures leading to fairer treatment of all parties.