See you in ADR
|
|
See You in ADR! Insurance disputes are increasingly being resolved in a conference room rather than a courtroom. How much is a fractured skull worth? To a New York woman injured by a hit-and-run driver, it was worth $100,000, and that’s the personal-injury claim–including a substantial amount for pain and suffering–she filed with her insurer under her uninsured motorist’s coverage. The insurer called the claim ludicrous and offered $10,000. Deadlocked, both sides prepared for a court battle. Enter Edward Resnick, a mediator-arbitrator with the American Arbitration Association (AAA). With the lawyers for each side in his office, Resnick began punching holes in their cases. The woman recovered completely and was not hospitalized, he reminded her lawyer. And she appeared to have been partly responsible for the accident. On the other hand, he warned the insurer’s attorney, a miserly award could leave the company vulnerable to a badfaith claim. Did the insurer really want to risk that? After three hours of haggling, the parties settled at $30,000. Total cost of the proceeding: $350. The case was one of 54,000 filed with the AAA last year for alternative dispute resolution: arbitration, mediation or assisted negotiations. The nonprofit association has never been busier. Its caseload has been rising steadily since 1983, when it handled 39,000 cases. Alternative dispute resolution–ADR–has taken off. Arbitration Forums Inc., another nonprofit provider of arbitration and mediation, reports that its caseload has been rising 5 percent to 10 percent a year, reaching 250,000 in 1988. The Center for Public Resources, a non-profit organization that promotes ADR and orchestrates settlements, says that more than 350 major U.S. corporations have signed its corporate policy statements to try ADR before taking other signatories to court. And that’s just the nonprofit scene. For profit ADR companies like EnDispute (Washington, D.C.) and Judicate (Philadelphia) have sprung up, too. “Five years ago, there were only a couple of groups involved in arbitration and mediation,” says Tom Clarke, secretary-treasurer of Arbitration Forums. “Today you have about 200. It does look like a growth industry.” It’s easy to see why. In the overburdened civil justice system, a case can cost thousands of dollars and drag on for years. ADR typically costs a few hundred dollars and can take as little as a few hours. “In the courts, our cases typically take two to four years,” says Kathleen Cullen, director of the property/casualty claims department at The Travelers Source : accessmylibrary.com |