Disputing Damages? You May Want to Read This

If you respond to arbitration filings and have occasion to dispute the damages sought in the filing, there are two important things to keep in mind:

  1. Comply with Rule 2-5
  2. Provide the arbitrator with the information needed

Rules 2-5 and 3-5 (e) specifically state that damages arguments contained anywhere other than in the Dispute Damages section may not be considered by an arbitrator. So, when disputing damages, it is critical to enter the arguments in this area only. Entering "See damages arguments in Contentions" will not suffice, as the arbitrator cannot consider the damages arguments in the contentions. (An exception to the above is where you, as the Respondent, assert that the damages sought are excluded from compulsory arbitration's jurisdiction, i.e., diminished value sought by an auto leasing company.)

Damage Dispute Entry Screen

Equally important is providing the arbitrator with sufficient information regarding the type and amount of damages in dispute. Needless to say, the more detailed the information is regarding what damages are disputed and what amount, the easier the arbitrator will be able to resolve the dispute. Simply arguing that the Applicant overpaid the claim or that "rental was excessive" without a specific reason or what the proper amount should be will make it difficult for the arbitrator to consider your argument or agree with your position. The arbitrator would have the discretion to deny the Respondent's damage dispute and award all proven damages. The exception to this is where the responding company has not been provided with the damages proofs. This is the scenario the "if known" in Rule 2-5 is intended to address. Specifying the disputed dollar amount(s) necessitates that information as to what the filing company is seeking has been shared. If documentation has not been shared, a responding company may ask the arbitrator to review the Applicant's proof to ensure all payments were reasonable and necessary. The arbitrator will have discretion as to what damages to award and the amount.

In closing, the key to any argument is the evidence that is submitted to support it. When deciding a dispute regarding damages, the arbitrator will "look to the evidence." What evidence has the Respondent submitted to prove its arguments for a reduction? What evidence has the Applicant submitted to prove its payment?

Article published in: May 2016 E-Bulletin