Mandatory Arbitration in Washington State

Washington enacted legislation in 1979 requiring mandatory arbitration (MAR) of a civil action having an amount in controversy of no more than $15,000 upon demand of either party under Revised Code of Washington (RCW) 7.06. Since 1979, the MAR limit has been increased several times but, for the past several years, the MAR maximum has remained at $50,000. On March 13, 2018, Washington Governor Jay Inslee signed into law revised RCW 7.06, increasing the MAR maximum to $100,000 and raising the fee for requesting a trial de novo from $250 to $450 effective September 1, 2018.

Washington’s MAR system is separate from private contractual arbitration. Unlike private arbitration, MAR is governed by a set of MAR rules having the purpose “primarily to alleviate the court congestion and reduce the delay in hearing civil cases.” Christie-Lambert Van & Storage Co. v. McLeod, 39 Wn. App. 298, 302, 693 P.2d 161 (1984). To that end, the MAR rules curtail or streamline discovery and relax the evidence rules. A MAR case is adjudicated by an arbitrator drawn from a pool of Washington attorneys with licensure of at least five years who have volunteered for inclusion in the arbitrator pool. The constitutional right to a jury trial is preserved in MAR by allowing a party dissatisfied with the arbitrated outcome to request a jury trial.  This is commonly called a request for trial de novo which is Latin for “new trial”.  In Washington, the decision to request a trial de novo comes with some important considerations.   If a party – either the plaintiff or defendant – requests a trial de novo, but does not obtain a better result, they must pay the other sides actual attorney fees and costs from the date of the de novo request.  These costs are often tens of thousands of dollars.

Once a party requests a trial de novo, the court clerk places the arbitration award under seal.  The jury trial is then conducted as though no arbitration proceeding had occurred. Malted Mousse, Inc. v. Steinmetz, 150 Wn.2d 518, 528, 79 P.3d 1154 (2003). This includes that no “pleading, brief, or statement (written or oral) during the trial may refer to the arbitration proceeding.” Id.
Since the enactment of MAR legislation attorneys on both sides of the bar have offered heated legislative testimony about its efficacy and fairness. Plaintiffs’ bar has argued that MAR promotes access to justice for small cases. The defense bar has often argued that MAR raises defense costs by imposing an additional hurdle to a jury trial and by imposing a biased tribunal that is heavily populated by plaintiff-leaning arbitrators wherein the defense has limited access to discovery. Since 1979, the plaintiffs’ bar has lobbied to successively ratchet up the MAR limit. In 2003, MAR had a limit of $35,000 and, at present, the MAR limit is $50,000, where it will remain until September 1, 2018, when it is raised to $100,000. This arbitration limit applies to each claimant in MAR; thus, when there are two or more claimants in one lawsuit, each claimant is entitled to claim the maximum MAR amount. See Twitchell v. Kerrigan, 175 Wn. App. 454, 463, P.3d 1025 (2013). MAR is, therefore, not strictly limited to low-value cases. Increasingly, attorneys are joining multiple claimants in a single action, thereby raising the amount for determination by an arbitrator in MAR.
Although MAR does substantially curtail discovery and creates an additional hurdle to securing a trial by jury, MAR tends to be an efficient and relatively speedy way to resolve claims.  If necessary, attorneys can often ameliorate the restrictions of MAR discovery by using MAR arbitration motions to secure additional discovery and by using expert testimony early in the case. Removal to federal court also remains an option in cases where the amount in controversy exceeds the removal minimum of $75,000 and the parties are residents of different states. Under the amended MAR legislation, MAR remains inapplicable to claims other than for monetary damages.

I have arbitrated numerous matters to favorable outcomes in MAR for both plaintiff’s and defendants.  I’m also frequently asked to serve as an arbitrator in many Western Washington counties.  If you have questions about your claim or the Mandatory Arbitration Rules, please contact us at your convince.

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