Disputed Damages and Rule 2-5 in TRS

The Arbitration Forums, Inc. Rules (effective October 1, 2019) includes updates that support TRS as the exclusive platform for Auto cases. 

Rule 2-5 specifies: “For new Auto filings, damages must be disputed where provided.” In TRS, “where provided” is the Feature Response workflow step.
Screenshot of the feature response
We are sharing the following scenarios to help you better understand Rule 2-5 in TRS. 

Scenario 1
The Filer sought $7,020.64 in Auto Damage. The Responder disputed Auto Damage, entered the Proposed Amount of $6,422.23, and argued LKQ parts should have been used because the vehicle was six years old. 
Screenshot of the justification
Did the Responder meet the terms of Rule 2-5 in TRS? 

Yes. The Responder disputed the correct Damage Type in the Feature Response, included its Proposed Amount, and presented its Justification regarding vehicle age and appropriate comparable parts. The difference between the amount sought and amount owed can be easily calculated. The fact that the Responder did not provide specific dollar amounts for each part should not preclude the dispute from being heard. Whether or not the reduction is proven will depend on the Responder’s evidence.
The help text for the Responder in TRS clarifies what is required: “Each itemized damage item can be disputed. Once the dispute option has been chosen, the damage item will expand, allowing you to enter the required information: Proposed Amount, the Justification, and the Dispute Type(s).” 
NOTE: If the Responder proves all of its reductions for parts costs, it might be sufficient to dispute parts with a single reduction (i.e., $300 total for three parts). However, if the arbitrator decides that the Responder proved only some of the parts reductions, and the Responder did not provide individual pricing, it may be appropriate to deny the damage dispute, noting that a reduction could not be given because the Responder did not provide the necessary individual pricing to calculate the reduction accurately.   

Scenario 2 
The filer submitted total loss damages, and partially itemized its damages by lumping the storage in with the salvage figure (see illustration). As a result, the Responder did not have the opportunity to choose Storage as a disputed item. With no alternative, the Responder disputed Valuation noting its storage challenge. 
Screenshot of the company-paid damages

Did the Responder meet the terms of Rule 2-5 in TRS? 

Yes. It is the responsibility of the filer to enter its damages accurately. The arbitrator has discretion whether or not to consider the amount the filer entered improperly as part of its subrogation claim. Per the current Reference Guide to Arbitration Forums, Inc. Agreements and Rules: “If the responding company disputes the damages claimed, it must clearly outline its position where provided, and note the amount that it feels is owed.” When the type of damage is not specifically named by the filer, the Responder does not have the opportunity to enter the dispute where it is provided in TRS, and the Responder is then allowed to raise the dispute in a different portion of its damage dispute.

Scenario 3
The filer sought $2,750.00 in Auto Damage and $300 in Rental. The Responder entered a challenge under the Auto Damage only as follows:“We challenge $250.00 of the Auto Damage as unrelated and $100.00 of the rental as unnecessary.” The Rental area did not include a challenge by the Responder. 
 Screenshot showing the damages sought
Screenshot with the amount challenged highlighted
Did the Responder meet the terms of Rule 2-5 in TRS?

Yes and No. The challenge to the Auto Damage is acceptable, but the challenge to Rental is not. The disputed Rental should have been entered in the Rental field.

As a neutral evaluator, the arbitrator should approach each damage dispute by giving it every consideration possible. A dismissal of a damage dispute based on Rule 2-5 in TRS should be rare because TRS has been designed to support the clear articulation of damage challenges, with the Proposed Amount field, the ability to dispute damages by item, and the ability to link/embed supporting evidence into the damage arguments.  

Article published in: December 2019 E-Bulletin