21 Trial Lawyer • Spring 2023 Bigger damage awards Arbitrators award bigger damage awards than juries. Defense arbitrators routinely agree to much higher awards than would otherwise be reasonable due to the reality of the first party binding arbitration venue. When I worked on the dark side and defended these cases, I always advised my carrier client to expect a higher damage result due to the first party binding arbitration context. Back in the good old days, when the client used to listen to me (those days ended, which is one of the many reasons I switched sides), the carrier would adjust its evaluated range upwards accordingly. Not so much anymore, hence the reason you should arbitrate rather than settle these first party binding arbitration cases when the net result numbers do not make sense for your client. Lower cost Filing suit costs significantly more than arbitrating. With trial, your client must pay a court filing fee, trial fees and statutory witness fees, not to mention often gargantuan expert witness fees because live witnesses are required for everything at trial. In arbitration, plaintiff’s expense is limited to $100 under ORS 742.504(10). This “does not include attorney fees or expenses incurred in the production of evidence or witnesses,” but it most certainly does include the often sizable expense of the arbitrators’ fees. I have served on panels where the total arbitrators’ fees exceeded $60,000. Regardless of the result, the plaintiff only pays $100 toward the total arbitrators’ fees. Relaxed evidentiary standards Under ORS 742.505(2), the arbitration “shall be conducted under local court rules in the county where the arbitration is held.” Most insurance policies contain language mirroring this statute. Chapter 13 of the UTCR is the state court set of rules governing arbitration procedure and evidence. Typically, the parties agree that UTCR Chapter 13 applies to first party binding arbitrations, which allows for submission of exhibits without live witnesses. However, keep in mind that UTCR Chapter 13 does not apply wholesale in its entirety. Provisions governing things such as appeal de novo and the limitation on arbitrator compensation, for example, clearly do not apply. Some defense attorneys assert that UTCR Chapter 13 does not apply. They argue that UTCR 13.010(1) states that UTCR Chapter 13 applies to courtmandated arbitration under ORS chapter 36.400 to 36.425. Furthermore, UTCR 13.010(1)(a) and (b) state that UTCR Chapter 13 “does not apply to … [a]rbitration by private agreement” or “[a]rbitration under any other statute.” The policy is a private agreement, after all, and the right to binding arbitration is governed by “other statute[s]” ORS 742.504(10) and 742.520(6). However, UTCR 13.010(2) states that each judicial district may adopt an SLR requiring arbitrations under ORS 742.505 and 742.521 to be conducted pursuant to the pertinent portions of UTCR Chapter 13. Some counties have done so and others have not. Regardless, most arbitrators will rule that UTCR Chapter 13 applies. I have served as an arbitrator on hundreds of panels and I have never experienced otherwise absent the parties’ stipulation. Shorter proceeding Defense attorneys often submit few, if any, exhibits at arbitration. Sometimes they do not call a single witness. They simply rely on cross examination of plaintiff’s witnesses. Perhaps this is because they know they are fighting an uphill battle and the hill is extremely steep. As a result, they put minimal time and effort into their presentation of the case. The plaintiff should not mirror this practice. This is a risky approach that may harm your client’s case. I have served on many panel arbitraSee Arbitration vs. Trial p 22
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