Your editor has been arbitrating more and more AAA No-Fault disputes over the past couple years. This is apparently the result of a major reduction in the pool of arbitrators following some rule changes, discussed below.
This is an excellent opportunity to review the basics of no-fault arbitration. Your editor will discuss some rule changes, advocacy styles, and outline a simple but effective arbitration book.
Where have all the arbitrators gone? In 2003, the No-Fault Standing Committee adopted more stringent qualifications. For the past few years, arbitrators have been required to annually renew their biographical information and certify that they qualify under the rules. The Policy Statement of the No-Fault Standing Committee states:
No-fault arbitrators must also have at least one-third of their practice involving auto insurance claims. If the arbitrator is not actively representing clients but maintains an ADR practice, at least one-third of the ADR practice must involve motor vehicle claims, not including or separate from no-fault matters.
AAA Vice President Kathryn Stifter reports that there are currently 693 arbitrators down from a high of about 1,200 just a few years ago. The Standing Committee is undertaking further review of qualifications which may impact these numbers.
Ms. Stifter points out that there are certainly less arbitrators outstate and it is becoming more difficult to provide a panel within the 50-mile radius.
Thus, most of the remaining arbitrators have been getting many more cases assigned. If you still qualify as an arbitrator, and you haven’t noticed this increase maybe it’s because you forgot to recertify! Dropped arbitrators do not get a separate notice. Please find your recertification and fax it in right away; the insurance company lawyers certainly will!
Timing of Filing. When is the best time to file a No-Fault arbitration? Opinions vary, and have been discussed in this column.[1] Filing immediately:
Waiting to file has some advantages:
Arbitration versus district court. The statute requires that No-Fault claims of $10,000 or less at the time of filing must be arbitrated.[3] Most lawyers will waive $1,000 or $2,000 of the benefits in excess of $10,000 because of the many perceived disadvantages of a district court No-Fault lawsuit. These include:
But how much in benefits can be waived and still be reasonable? An efficiently tried case could be done in a day. Keep in mind that the insurer, too, is suffering from most of the same downside. Juries are tending to award special damages, and certainly favor direct claims against insurers. Your editor would suggest that a long hard look at district court might be appropriate as the amount waiver increases, especially for ‘harder’ special damages.
“Postponements Rule” Changed. There was a change in Rule 15 that no-fault practitioners should know:
Inadequate disclosure or late discovery could result in the slow party footing the bill for the other party’s postponement request!
No Fault Arbitration Advocacy. The recent spate of arbitrations has allowed your editor to observe presentations made by a variety of attorneys. There was certainly a wide variety of styles and skills. The reader may benefit from these observations.
Respondent’s attorneys, for the most part, showed a high level of knowledge and skill, but a lower level of preparation. While their exhibit books were almost all submitted on a timely basis prior to the hearing, they tended to be fairly sparse and bare bones. I suppose this is because they tend to rely on the Claimant to include all the medical records or perhaps they want to avoid helping the Claimant to prove their case. While I generally approve of the tree-saving conciseness of the typical Respondent’s exhibit book, at least bringing copies of impeachment materials would be wise. At a recent arbitration, there were substantial questions about the Claimant’s credibility relating to prior medical records but no one even had a copy of the actual records (the impeachment was attempted from the adverse examiners’ recital of the records). While the respondent faxed the records after the hearing, the impeachment might have been much more effective with the records.
Claimant’s attorneys’ presentations are much more variable; from brilliant to pathetic. I have had several older, more experienced attorneys make excellent presentations. Their direct examinations tended to be shorter, but covering the important issues in the case. They were confident (but not cocky), clear and to the point. In closing, they were not afraid to exhibit a bit of emotion when appropriate, but did not beleaguer the obvious. Not surprisingly, the best of these presentations tended to be from lawyers whose names were frequently seen in the case reports next to large jury verdicts.
A Simple Arbitration Exhibit Book.
Some plaintiff lawyers question whether a complete arbitration book always makes sense. They complain that the time and expense to prepare a book is unreasonable for many arbitrations.
A No-Fault arbitration book can be simple, efficient and inexpensive if the law firm takes the time to assemble all the tools necessary and have a system in place in advance. The remainder of this article will address some elements helpful to a simple but persuasive arbitration exhibit book.
Index. Organization is important, and an index to the book helps the arbitrator find the exhibits. The index should be fairly prominent.
Statement of the Case including legal brief. Why wouldn’t every arbitration book include some sort of a statement of the case? Since you already have an excellent no-fault legal brief (you do have a copy of the Joe Crumley or Mike Bryant comprehensive no-fault briefs from the MTLA brief bank, don’t you?), you’re 90% done before you start. Customize the brief by dictating a short description of the accident, the injuries and the treatment. You may have already done this for your liability demand; if not, you’ll be able to re-use that work when you are ready to send your liability demand.
Itemization of Claim. It seems silly that a claimant would not list the claim being made. And yet your editor has heard arbitrations where claimants presented no written itemization of claim, but attempted to orally recite the claims that were outstanding. In a recent example, claimant’s attorney then proceeded to waive a portion of the pre-filing wage loss claim to keep the total from exceeding $10,000. Later review of the PIP log revealed that two of the claimed medical bills had actually been paid. Thus, claimant waived over $1000 unnecessarily. This probably would have been avoided with a simple up-to-date itemization.
Frankly, a Comprehensive Itemization of Arbitration Claims, prominently placed in the book or in the body of the brief serves as a roadmap for the arbitrator and an answer to that frequent first question “Just what’s in dispute here today?” It would contain subheadings for all the benefits being claimed, including costs and interest/penalty.
In the past, your editor has substituted a proposed and fully-completed Award worksheet, patterned after the form given to the arbitrator by the AAA. One major difference – this one is filled in already. If the case is fully proved, the arbitrator can just sign and be done.
Bills. Duh. You’d be surprised.
PIP log? Should you prove the payments made by the defense? Arguments go either way.
Interest Calculations. Why make the arbitrator calculate your interest? Why allow the defense attorney to suggest that you interest calculations have no basis. MTLA’s website has spreadsheet templates to allow your staff to easily calculate interest in a clear and correct manner.
Reasonable and necessary letter or narrative. A reasonable and necessary letter is unnecessary for most bills. Usually, the medical records themselves make it clear that the need for treatment arose from the car crash. The “reasonable” portion is a little redundant and maybe silly; what medical provider is going to characterize their own treatment as being “unreasonable” in price?
Still, why give a conservative or skeptical arbitrator an excuse to deny your claim? If you have already secured a narrative report from the treating physician, it should already include the proper language, confirming that that the “Charges are reasonable for necessary treatment arising from the car crash.” If not, most treating physicians will issue such a two line letter with only minimal prompting.
In addition, if your claim involves lost wages or replacement services, medical support for your client’s disability is wise.
Police report? The police report is arguably excluded from evidence by statute.[4] Still, many arbitrators ignore this argument completely, and simply accept the report into evidence. Certainly, if the report will assist the arbitrator or prove an important aspect of the claimant’s case, the attorney should include it.
Property Damage Photos and Repair Estimates are sometimes helpful to prove the physical magnitude of the impact.
Medical Records. Some lawyers, hoping that the arbitrator will never need to refer to as the insurer’s exhibits, will provide every medical record in their file. Most lawyers provide at least the records associated with the unpaid bills, hoping that the defense attorney will not produce any impeaching records. But even ‘sparse records’ advocates should keep in mind the strong persuasive power of the emergency room reports and the immediate treatment notes. If your client has clearly documented the areas and the severity of his injury in those early records, they can go a long way in proving the need for later care.
Adverse Exam. It is unlikely that the defense will forget to bring the adverse exam. Many claimant lawyers include it in their materials, others choose not to.
Depositions. As discussed here in the past, why not include one or two damning depositions from the adverse doctor in your no-fault arbitration book? Even the most knowledgeable arbitrator may be unaware of the dirty details of the adverse doctor’s past testimony.
Wage Loss claims are all different. Provide the arbitrator whatever documentation you can secure proving the past wages and income and the loss. Your client probably stopped getting disability slips when the insurer stopped paying, so be sure you have medical support for the ongoing claim.
Don’t forget the no-fault carrier may have wage proof documentation in their file.
Replacement Services. Obviously, checks and receipts for out of pocket amounts paid would be helpful along with medical support. If the claim if for the reasonable value of the primary homemaker’s lost service, get Richard Harden’s excellent materials from MTLA to provide full support for your claim.
Transportation expenses. Many lawyers overlook this benefit if the client has not reminded them. Advocates should review the insurer's payment logs to make sure that mileage[5] has been paid since initiation of the claim. Often, the insurer will stipulate to pay mileage corresponding to undisputed past treatments. The IRS business expense rate is considered by some to be a fair average, and is highly accessible.[6]
Insurers often assert a low mileage rate, even using the statutorily capped IRS charity and medical expense rate.
A more accurate assessment of the costs related to vehicular use is computed by the nonprofit American Automobile Association. These studies factor in all costs associated with auto use, such as gas and oil, tires, maintenance, insurance, licenses, registration, taxes, depreciation and even finance charge costs. These usually compute to substantially higher than the maximum IRS rate.
AAA's ANNUAL DRIVING COST ESTIMATES[7]
| YEAR | COST PER YEAR | COST PER MILE |
|---|---|---|
| 2005 | $8,410 | 56.1 cents |
| 2004* | $8,431 | 56.2 cents |
| 2003 | $7,754 | 51.7 cents |
| 2002 | $7,533 | 50.2 cents |
| 2001 | $7,654 | 51.0 cents |
| 2000 | $7,363 | 49.1 cents |
| 1999 | $7,050 | 47.0 cents |
| 1998 | $6,908 | 46.1 cents |
| 1997 | $6,723 | 44.8 cents |
| 1996 | $6,389 | 42.6 cents |
| 1995 | $6,185 | 41.2 cents |
| 1994 | $5,916 | 39.4 cents |
*AAA adopted a revised methodology for calculating driving costs to more fully capture costs incurred by average drivers.
The publication “Your Driving Costs” 2005 American Automobile Association further breaks down costs by type of car and average mileage.[8]
2005 Vehicle 10,000 Miles/Year 15,000 Miles/Year 20,000 Miles/Year
Chevrolet Cavalier 4-cyl., 2.2 liter 59.9 cents 47.6 cents 42.0 cents
Ford Taurus 6-cyl., 3.0 liter 69.1 cents 57.2 cents 51.4 cents
Mercury Grd Marquis 8-cyl., 4.6 liter 75.7 cents 63.4 cents 57.2 cents
Chevrolet Blazer 6-cyl, 4.3 liter 77.7 cents 63.8 cents 56.7 cents
Dodge Caravan 6-cyl., 3.0 liter 66.1 cents 55.3 cents 50.0 cents
Fuel costs based on the late-2004 average gas price of $1.939 per gallon.
Why not include these materials in your book?
Some lawyers claim only the costs of reports and records secured exclusively for the arbitration while others include very single expense they’ve incurred, including the cost of the arbitration books. A list of these expenses should be sufficient, but it’s nice to have copies of all the receipts handy for when the defense attorney impugns your honesty by questioning the costs. And certainly some arbitrators may require the proof be produceded.
Statutes and Case Law. Keep readable copies of the important case law in stock to include in your arbitration book, with important passages highlighted. At a minimum, you should provide the arbitrator with a current copy of portion of the No-Fault Act, Minn. Stats.:
As well as copies of important cases like Wolf, Scheibel, and Great West.
Arbitration Drawer. If you haven’t got one already, fill a drawer with the materials you need to put together your books, including covers, exhibit tabs, case law, etc. Some arbitrators like comb-binded books, and others, especially those with school age children, like reusable 3 ring binders.
Alternatively, copy services will usually also provide binding services for an extra charge. Either way, if you have prepared in advance, your arbitration exhibit book will be as simple as 1-2-3.
