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Posted in Car Accidents on January 8, 2016   |  by Gary Burger

Mandatory Arbitration for Uninsured and Underinsured Motorist Claims in Illinois

If you have an uninsured or underinsured motorist claim in Illinois, your claim is subject to mandatory arbitration. See 735 ILCS 5/2-1001A et seq. The same is true if you have an automobile accident and the value is less than $50,000. Id. Illinois has taken steps to try to put efficiency in resolution of underinsured, uninsured, and smaller personal injury cases. However, injured parties give up their right to a jury trial in these claims.

The seventh amendment of the United States Constitution guarantees that Americans have the right to have their civil suits tried before a jury of their peers. Legislators and Courts have placed certain types of claims outside this and have tried to remove from the right to a jury trial by classifying them as administrative types of claims, or given companies the right to contractually mandate arbitration, or lastly they do this by creating a sub docket or lower docket of cases. So, if you file a case in Illinois, you have to certify that a case is over $50,000 or it will be sent to an arbitration docket, where a judge will more quickly resolve the claim. Luckily, many judges are fair and that is not a bad thing. However, if you have a case where a jury would get very angry, you sometimes don’t get as high of a result.

For claims that are under $50,000, Illinois Supreme Court Rule 86 sets for the eligibility requirements. 155 Ill 2d R. 86.  A party who reasonably believes he or she has a reasonable basis for removing the matter from arbitration may move the court for such relief prior to the hearing. 155 Ill 2d R 86(d), Committee Comments.  Since the hearing is evidentiary, parties may compel the appearance of witnesses and other parties pursuant to Rule 237(b) notice. 134 Ill 2d R 237(b). Promptly after the hearing, the arbitrators shall make a written award that disposes of all claims for relief. 155 Ill 2d R 92(b). A party who challenges the validity of an arbitration award must provide it improper by clear and convincing evidence. Thomas v. Leyva, 276 Ill App. 3d 652, 654, 659 NE 2d 24, 26 (1st D 1995).

Illinois has permitted insurance companies to put mandatory arbitration claims in their policies for uninsured and underinsured claims. So, uninsured and underinsured claims in Illinois typically have mandatory arbitration provisions in the policies and they typically will be arbitrated. This can prove to be an efficient resolution, sometimes not.

We recently tried an uninsured case for Christopher Smith and Sheronica Washington in Illinois before an arbitrator. We litigated the case for 2 years, and made a demand on the insurance company to pay the full $40,000 two uninsured claims of $20,000 each. Unique Insurance Company would not answer our letter or respond to our claims at all. So, we tried the case. The lawyer for the defendant walked in the hearing saying he didn’t know why he was there because there was no defense to the claim.  We won the case and got the full recovery. However, this was a long delay and justice was not served. Justice delayed is justice denied. We have now filed a separate suit for bad faith refusal to settle against Unique Insurance Company which is current pending. We will let you know how that goes.

Another area where mandatory arbitration provisions are provided is in employment agreements or contracts with big companies. Employees are forced to sign mandatory arbitration agreements which get rid of their right for a jury trial. Credit card companies, schools, student loan companies, and other big powerful companies and also tuck arbitration provisions into their contracts. These are often enforced. To get around them, people have to prove that they are procedurally or substantively unconscionable-and it is hard to do. However, the Court and Bowers v. Fee Asbury St. Louis Lex, LLC ED 102229 (Mo App ED. July 7, 2015) found that a mandatory binding arbitration clause was invalid and unenforceable. This was because it was so one sided-the employer got to change the arbitration rules and it was to one-sided. So, if there are two owners or to one-sided, the court might find them invalid.  This harkens back to a requirement that if the premises are only by the employee and not the employer, and the employer can change its mind, the promised arbitrator is really allusory because the one party retrains the unilateral right to change it.  Baker v. Bristol Care, Inc. 45 S.W. 3rd 770, 776 (Mo Banc 2014).