Attorney’s Fees in Mandatory Arbitration Cases

In Washington State, claims for personal injury (and other civil matters) $50,000 and under may be placed into Mandatory Arbitration. (RCW 7.06)

It is often helpful to put cases into Arbitration to help avoid the common defense tactics of deny, delay and defend. The benefit of arbitration includes a quick hearing on the case as opposed to a jury trial which may not be held for more than a year after a case is filed in Superior Court.

Unfortunately, insurance companies generally use arbitrations as discovery tools and rarely accept the judgement of the Arbitrator. They will generally try to take their chances and think they can convince a jury the plaintiff is not as badly injured as is claimed. They can request what is called a trial de novo which means the case is sent to a jury trial. RCW 7.06.050.

This can also be an opportunity for the plaintiff to strike back against the insurance companies because if the defendant insurance company does not improve its position at jury trial, it is obligated to pay the plaintiff’s costs and reasonable attorneys fees. RCW 7.06.060. This essentially doubles the amount an insurance company is likely to pay out.

For example, assume an arbitrator awards $30,000 to a plaintiff and the insurance company requests a de novo trial. If the jury returns a verdict in the amount of $30,001, the insurance company must be the plaintiff’s attorneys fees which could easily be $30,000 to take a case to trial.

It is important, however, to be careful exactly how offers of compromise might be worded. If a plaintiff makes an offer of compromise of $32,000 which includes a loss of consortium claim by a spouse, that offer must be segregated between the husband and the wife or it is treated as one claim. Gautam v. Hicks, 310 P.3d 862 (2013). Thus, when a jury returns a verdict less than the combined offer, the plaintiff may not collect attorney’s fees.