Arbitration; costs, process, duration, etc.

tecate

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I'm in dispute with an insurer. There's an arbitration clause in the policy and I'm currently inclined to invoke it. I'm currently having engineers professional opinion formalised by way of a report.

The issue concerns building defects in relation to my home. I'm trying to figure out what resources I need to make available to see this through. i.e. once we agree an arbitrator, can it be as simple as the submission of reports from each side - with the arbitrator weighing up matters on the basis of same? ....or ....Will I have to have my engineer present?

How protracted is the arbitration process? i.e. Is it likely to involve multiple meetings (the matter is of importance to me personally but I wouldn't imagine it's the most complex of matters that get thrashed out in arbitration or elsewhere) - and drag on for a considerable length of time?

How can I gauge financial exposure (in the event of being the unsuccessful party in arbitration and having costs go against me)? I intend to represent myself - and back up my position by way of the engineers report and the engineers direct input into the process if it's deemed necessary. Presumably the other party (an insurer with deep pockets) will rock up with solicitor(s), claims management agent & engineer(s).

In the event of an unsuccessful outcome, will I have to pay for such costs or solely for the cost of the arbitrator? Can anyone provide a very rough outline of what an arbitrator would charge for a matter of this nature?
 
Rough guess - Arbitrator €12/15K. You will have other expenses with witnesses, engineer and maybe legal representation. If you win, insurer will have to comply with whatever Arbitrator will award. If you lose, you pay the insurers costs as well as Arbitrators.

Have you suggested the Arbitrator or have you agreed to Insurers suggestions?

Pencil in €25K as a ballpark.
 
Thanks for your input Ravima. Will the Arbitrator quote prior to the process starting? I have not invoked the clause yet - but have no intention of agreeing to the insurers choices. They'd have a wealth of experience of dealing with many arbitrators up and down the country...i'd have concerns in that respect.
 
Both sides must agree to the one Arbitrator. If there is no agreement, then each nominates their own and they in turn agree on a third who hears teh case. The Arbitrator will give you his fee per hour and any other expenses prior to commencing. Be aware, that the fee is per hour. It will include travel, hearing, research and delivering the Award (decision). It will not be possible to say how many hours it will take.

As for picking Arbitrator, both sides usually suggest three to the other. You should submit your three to the other side and if they don't agree to any of them, they will in turn suggest three to you. Some contracts allow for President of Law Society to nominate and agree to be bound by him/her.

Like all law, there's nothing certain in it, save expense!
 
A few hours with a solicitor familiar with this area before you go ahead with the arbitration might be money well spent.
 
A few hours with a solicitor familiar with this area before you go ahead with the arbitration might be money well spent.
True. Have been working on that front also. May yet go directly to litigation. All depends..
 
You can't go 'directly to litigation' if there is an Arbitration clause in the policy.
 
You can't go 'directly to litigation' if there is an Arbitration clause in the policy.
Yes, that was my previous understanding. However, I'm trying to bring this to Arbitration. If I don't have the cooperation of the insurer, then it goes to litigation. This is the legal opinion that I've been provided with.
 
Then get another opinion. By Opinion, do you mean an actual written barrister/Senior counsel Opinion, or an oral opinion from someone in the pub?

If you have a Policy with an Arbitration condition, then thats the only way to proceed.
 
That's professional opinion that's been paid for - not pub talk. It will go to arbitration so long as the insurer facilitates same.
 
That's professional opinion that's been paid for - not pub talk. It will go to arbitration so long as the insurer facilitates same.

If your contract has an Arbitration Clause as per Ravima's comments it must go to Arbitration under international articles of agreement. If the insurers wish to litigate, your solicitor (or you) simply have to walk into court hold up the arbitration clause in the Contract and the Judge is obliged to kick it out of court to Arbitration. You need to be careful that you do this at an early stage as if you engage in litigation you run the risk of the court refusing to force arbitration. Loads of case law on this topic but amazingly the legal profession are not always up to date on the topic.

The process is straightforward; To start you simply notify ("refer") the other party that you are going to Arbitrate the issue under the relevant clause in the Contract. Suggest 2/3 names and send it off. The other side if they do come back will come back with 2/3 of their owns names which you can accept or reject. If you reject you go the the body mentioned in the arbitration clause (generally Chartered Institute of Arbitrators or Law Society in the context of insurance) and request a nomination. There is generally a fee for this that you pay to the relevant body. €300-500. When someone is appointed they will issue their fees, terms and conditions and will generally look for an upfront payment. It should be noted that as soon as they accept the nomination they are appointed and both parties are liable for the fees of the Arbitrator. The Arbitrator will progress with the issue, direct when to meet, when to issue documents etc up to the point when they issue their award. Within the award will include who wins/loses, what remedies (who pays who etc) and who pays the costs. All in all the process should take a fraction of the time of litigation and a fraction of the cost. All depends on who the Arbitrator is.

Its my experience that if you seek to invoke the arbitration clause, insurance companies generally sit up and listen and it may be like loading a gun without ever having to pull the trigger. It all comes down to the issue and background of the actual dispute
 
Just some brief notes to supplement the previous observations.

The arbitration condition is what is known as an "ouster clause". It's specific purpose is to oust the jurisdiction of the courts to deal with disputes arising under the contract. Not every dispute is automatically suitable for arbitration, as for example, if there is an issue of fraud.

Although arbitration is less expensive than formal litigation the result is equally binding. Therefore, you might reconsider the question of legal representation. If you are completely comfortable with the technical engineering issues and the relevant legal issues that is fine. However, you need to be careful not to prejudice your best interests by not having proper legal representation to protect you.

Generally, in insurance disputes, the onus of proof rests with the policyholder to prove that an insured peril has operated and that indemnity should be provided. Therefore, you carry the burden of assembling and presenting the relevant proofs to stand up your case.

BTW did you consider the Financial Services Ombudsman Bureau ? It costs nothing if the decision goes against you - only your own costs and outlays. However, their decision is legally binding and can only be appealed to the High Court by way of Notice of Motion. I am not recommending this path particularly but mention it for interest.
 
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