February 2016 E-Bulletin for Arbitrators

This month's E-Bulletin topics include:

  1. QwikShare Recap: Affirmative Defenses
  2. Credit for Prior Payments
  3. Upcoming Arbitrator QwikShares — Enroll Today!
  4. Items Considered

QwikShare Recap: Affirmative Defenses

AF recently facilitated a QwikShare on affirmative defenses that covered:

  • The definition of affirmative defense as applied within the intercompany arbitration agreements
  • The purpose of affirmative defenses and from which they are derived (Article Second)
  • Recognizing when an affirmative defense has been asserted
  • Examples of common and less common affirmative defenses that are asserted

Nearly 150 arbitrators attended one of the four QwikShares that were offered and asked many questions. Due to the popularity of the QwikShare and the number of questions asked, more sessions will be offered later this year. Look for announcements in upcoming issues of the E-Bulletin for Arbitrators.

For those who could not attend, below are a few of the questions:

  1. If policy limits is asserted as the affirmative defense, and the Applicant has not indicated that it will accept policy limits, do we simply uphold the affirmative defense?

    No, you must hear the case to decide liability and determine the award amount. If the award will exceed the policy limit, and the Applicant has not agreed to accept the policy limit, then you will grant the affirmative defense and explain why.
  2. What do you do in the scenario in which you have related cases, the Respondent asserts policy limits on both filings, but only one Applicant agrees to accept the policy limits? Do you award policy limits on one filing and grant the affirmative defense on the other? Or do you grant the affirmative defense on both?

    Each case stands on its own, even though they are related. This is why the Respondent has asserted the affirmative defense of policy limits on both. Assuming the award on both cases exceeds the Respondent's policy limits, you will grant the affirmative defense on both cases. The one case is easy because the Applicant did not agree to accept policy limits. The affirmative defense is granted on the other case because, even though that Applicant agreed to accept policy limits, we know another claim is pending; awarding the policy limits puts that Respondent in an excess position.
  3. What do we do if the Applicant states that arbitration is mandatory in the loss state, and the Respondent asserts the affirmative defense that it is not signatory?

    In states where arbitration is mandatory and AF is designated as the provider, asserting the affirmative defense that a company is "not signatory" is not relevant, and the affirmative defense should be denied. This assumes that arbitration is, in fact, mandatory in the loss state and for the forum in which the case was filed. See the Frequently Asked Questions for information on states that mandate arbitration and designate AF as the provider.
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Credit for Prior Payments

The February 2015 E-Bulletin for Arbitrators covered common scenarios involving prior payments — where the Applicant acknowledges receipt of the payment or the Respondent has provided proof of the payment being received by the Applicant. The following are other, less-common scenarios that raise questions:

  1. Parties Note Different Payment Amounts — If the prior payment amount differs between the Applicant and Respondent, you will need to determine what amount was proven to give the proper credit. Lastly, no credit should be given for out-of-pocket payments made to an insured, except for a partial or full deductible payment.
  2. Credit for Prior Payment to Applicant's Insured — If the payment represents the insured's deductible, credit should be given against the award in the deductible field. Payments for any of Applicant insured's out of pocket expenses, other than the deductible, should not be credited.
  3. Prior Payment Exceeds the Award — If the amount of the award is less than the prior payment, the prior payment amount must be manually reduced by overriding the automatic award calculation to zero out the negative award. In the "explanation of override" box, the explanation must be given as to why the full payment amount is not being credited.
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Upcoming Arbitrator QwikShares — Enroll Today!

Webinar graphicEnroll today for our upcoming Arbitrator QwikShare Webinars! Our QwikShares are 20-minute, topic-specific Webinars that focus on issues that frequently generate questions from arbitrators and post-decision corrections, and attendees may ask questions via Chat. We know your time is valuable. We hope you'll appreciate and take advantage of the opportunity for AF to quickly share important feedback and tips without a significant investment of your time.

Enroll in Handling Prior Payments. Learn how to confidently handle disputes involving prior payments during a brief, 20-minute instructor-led Webinar! This session includes when to credit the prior payment argued by the Respondent, how to complete the Damage Dispute section when crediting a prior payment, and the opportunity to ask questions via Chat.

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Items Considered

Directly above the "Decision Information" section of the online decision entry screen is a section titled, "Arbitrator(s) considered the following when rendering the decision (Hearing Representation Information)."

Located within this section are check boxes to indicate what you, as the arbitrator, considered when hearing the case: the application (Applicant) or response (Respondent), contentions filed by either party, all listed evidence received, and if either of the parties made a personal appearance. There is also a box to check if the Respondent did not answer the filing.

Most filings will call for the first three boxes to be checked. You must check all that apply.

If one or more of the members made a personal appearance (more commonly today by phone), that section will expand so the arbitrator can enter the name and the role that person has with the filing.

Finally, it is important to note that if the Respondent fails to answer, only the "No Answer" box should be checked. Obviously, if there was no answer, by definition, no response, contentions, or evidence was received, and no request for a personal appearance could be made.

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