Arbitration is an alternative dispute resolution process (ADP) that helps those involved in a car accident resolve their claim with an insurance company. It involves a third person–the arbitrator, who determines the outcome of a case after measuring evidence from both sides. It serves to help both sides save money and time, which they would have spent more had the case seen in a courtroom.
Arbitration often comes into play in situations where you need to settle a claim dispute either with your insurer or another. Most claims that require arbitration involve disputes over first-party claims, which involve disputes with the victim’s insurance provider.
Several fundamental concerns are resolved in the arbitration for a car accident; such concerns include which one of the two drivers gets a settlement and how much you should receive if you get a settlement from the other driver.
Keep reading to learn more about arbitration and its advantages in settling claims over other methods of dispute settlement.
What Are the Types of Arbitration?
There are two types of arbitration, which include non-binding and binding:
- Binding: This is when the arbitrator’s decision at the end of the dispute is final and cannot be appealed against. Only under unique conditions can binding arbitration be contested; if infringement and fraud can be proven. And even then, the court will still put into consideration the arbitrator’s initial ruling
- Non-binding: Here, both have the option to accept or deny the arbitrator’s final verdict and proceed to file a lawsuit. This form of arbitration is most popular in Canada and the United States. It’s used to settle less complex disputes, which would take long in court
Insurance companies tend to advocate for binding arbitration.
Arbitration is viewed as one of the most prompt and efficient ways to settle claim disputes, and also displays several advantages over other forms of claim settlement procedures.
Let’s take a look at some of these advantages.
What Are the Advantages of Arbitration?
1. It Is Less Costly than Litigation
Because the process is quicker and normally less complicated, you don’t don’t have to spend a lot of cash in maintaining a legal representative as you will not need one for an extended time. Trials and litigations may take longer, which may require you to keep paying a lawyer.
2. Faster than Other Forms of Case Procedures
While some trials may take at least 28 months to get settled, arbitration may take less than a year. For this reason, arbitration is viewed as the most preferable form of dispute settlement.
3. Everts Hostility
In arbitration, both parties are given fair chances to participate and offer resolution structures, which encourages them to work together in coming up with a resolution. This helps make the process harmonious, compared to court proceedings, which often end up causing rivalry.
4. More Flexible
The scheduling for arbitrary cases can be set around days that work for both parties, which may be as soon as they wish and as often as they’d like. Trials, on the other hand, tend to have crowded calendars with set dates that may not work for both involved parties.
A Favorable Form of Dispute Settlement
Arbitration is most likely the most suitable dispute resolution tool for less complex cases. In case you are considering it as a medium of resolution for your claim, determine first whether it is preferable or applicable to your case. Your lawyer will best advise you on whether to take this path for your case.