April 2020 E-Bulletin for Arbitrators

This month's E-Bulletin topics include:

  1. Clarification of “Not Signatory to Forum” Affirmative Defense
  2. Decision: Explain Yourself
  3. Tips for Hearing a Case in TRS
  4. Reporting Suspected Illegal, Dishonest, or Fraudulent Activities
  5. A “Prima Facie” Case – How Much Evidence is Enough?

Clarification of “Not Signatory to Forum” Affirmative Defense

illustration of a car accidentWhen a responding party asserts the exclusion of “Not Signatory to Forum,” it is intended to indicate that the responding party itself is not signatory to the forum. This exclusion is not applicable to assert that there is another potential tortfeasor that is not signatory to the forum.
Rule 1-4 addresses the scenario in which a responding party believes another party(ies) bears a degree of negligence for the filing company’s damages. In this instance, the responder’s options depend upon whether the other party(ies) is signatory to the forum. If signatory, the responder can bring the party(ies) into the case by adding the party(ies) to the case. If the party(ies) is not signatory to the forum, the responder can argue the negligence of the other party(ies) in its contentions. When the filer reads the response, it can amend its application (OLF) or withdraw the filing (TRS). If the filer allows the case to move forward when the negligence of a non-signatory was argued, it agrees to accept the award, if any, against any responding company as final resolution of its claim.
Image of Rule 1-4
As the arbitrator, it is important to understand that the exclusion of “Not Signatory to Forum” should only be upheld if the responding party itself is not signatory to a particular forum. 
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Decision: Explain Yourself

Image of post it notes hanging from a clothes lineArbitrators are charged with reviewing contentions and evidence, then writing a clearly worded decision describing their findings. The arbitrator must keep in mind that the standard for liability to be proven is a preponderance of the evidence weighing in favor of the theory of the applicant. Arbitrators are charged with weighing all the evidence and explaining what the evidence tells them, or how the evidence was lacking. All of the possible alternative explanations need not be specifically ruled out for the applicant to prevail. An arbitrator must determine, based on the evidence, whether the applicant’s theory is more likely true than any other alternative explanations proposed by the respondent.

A liability percentage is entered in the Liability Decision section, and an integral part of the explanation is written in the text box located just below the liability percentage. This is where the duties owed and duties breached by each party must be listed.

The What Evidence section (Explanation in Special) near the bottom of the decision form is a place for the arbitrator to clarify the basis of his or her decision. Using AF’s long-standing equation Contentions + Evidence = Fact, arbitrators must look to the evidence to support their conclusions. The parties often reference specific evidence items in their respective contentions.  An arbitrator’s explanation must point to that evidence, what it said, and how it does or does not support the parties’ arguments. The explanation must also include any other evidence that informed the decision. This approach improves the clarity of the decision for the parties to the arbitration and reduces any confusion the parties might have after the decision has been published.
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Tips for Hearing a Case in TRS

Helpful tipsTRS is designed to streamline the filing and responding process, reduce cycle time and errors, and improve Decision Quality. To support you as you hear cases in TRS, we are sharing the following tips:
1) Add a specific comment about the embedded evidence item(s). Explain what the item contained and/or what it proved (or did not prove) concerning the associated argument. For example, if the Adverse Party argues the Recovering Party parked illegally, and embeds a copy of the police report as support, an example of a specific comment could be: “The officer’s narrative stated Alpha was parked illegally in a no parking zone.”
2) While filers and responders are strongly encouraged to attach evidence where applicable within the workflow, evidence must be considered regardless of where it is attached. To review all attached evidence, follow the Workflow steps shown in the images below:
Screenshot of the workflow steps and the decision actions

3) Review and consider the pre-rebuttal damage arguments when considering the Adverse Party’s damage dispute.   

4) Use your discretion to decide if the Recovering Party has proven its damages when it has not properly itemized them. For example, if the towing charges are lumped into the vehicle valuation field instead of where they belong in the towing field.                                                                                                                               

5) Consider only policy limits raised in the proper area. The Adverse Party must assert Policy Limits in the Coverage Response - Collision Workflow Step (Illustration A). In the arbitrator view, asserted limits should appear in the Liability Policy Limits Workflow Step (Illustration B). 
Screenshot of the Coverage Response - Collision

Screenshot of the Liability Policy Limits Finding - Collision
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Reporting Suspected Illegal, Dishonest, or Fraudulent Activities

Image of a pawn holding a sign with a circle with a line through itArbitration Forums, Inc. (AF) is committed to providing an environment free of illegal, dishonest, or fraudulent activity.

AF has contracted with a third-party service called Lighthouse Services, through which arbitrators may anonymously report suspected illegal, dishonest, or fraudulent acts or violations by an AF employee.

View the flyer for information and details about Lighthouse Services.
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A “Prima Facie” Case – How Much Evidence is Enough?

Image of hands holding a cell phone taking a photo of cars after an accidentAs an intercompany arbitrator, you know there are no default judgments in intercompany arbitration (Rule 4-1). The filing company does not prevail simply because the responding company did not submit an answer. The filing company still must prove its case.

Further, there are no formal rules of evidence (as is in litigation). All evidence is to be considered and given “weight” based on its relevancy and credibility to all the other evidence presented at the hearing. If the filing company’s evidence proves liability and/or damages, the applicant has proven a “prima facie” or “minimum standard” case.

Remember, the burden of proof in intercompany arbitration is “preponderance of the evidence” (civil matters) not the threshold of “beyond a reasonable doubt” (criminal matters). This simply means that the applicant does not need to provide indisputable proof, i.e., the only possible explanation of what happened, but only needs to show that its factual explanation is more likely true than any other alternative explanations. It also means that all possible alternative explanations need not be specifically ruled out for the applicant to prevail. Many cases are decided within the confines of circumstantial evidence so, when appropriate, remember it is the totality of the circumstantial evidence that matters and whether that proves or does not prove a party's contention. In addition, please note that hearsay evidence can be accepted in arbitration. It can be the reliability of the hearsay that the arbitrator needs to address.
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