Washington was a frontier state in the enactment of legislation in 1979 requiring mandatory arbitration (MAR) of a civil action having an amount in controversy of no more than $15,000 upon demand of either party under Revised Code of Washington (RCW) 7.06. Since 1979, the MAR limit has been increased several times but, for the past several years, the MAR maximum has remained at $50,000. On March 13, 2018, Washington Governor Jay Inslee signed into law revised RCW 7.06, increasing the MAR maximum to $100,000 and raising the fee for requesting a trial de novo from $250 to $450 effective September 1, 2018.
Washington's MAR system is separate from private contractual arbitration. Unlike private arbitration, MAR is governed by a set of MAR rules having the purpose "primarily to alleviate the court congestion and reduce the delay in hearing civil cases." Christie-Lambert Van & Storage Co. v. McLeod, 39 Wn. App. 298, 302, 693 P.2d 161 (1984). To that end, the MAR rules curtail or streamline discovery and relax the evidence rules. A MAR case is adjudicated by an arbitrator drawn from a pool of Washington attorneys with licensure of at least five years who have volunteered for inclusion in the arbitrator pool. The constitutional right to a jury trial is ostensibly preserved in MAR by allowing a party dissatisfied with the arbitrated outcome to request a trial de novo upon the filing of a request for a trial de novo along with a statutory fee. Trial de novo is discouraged, however, by imposing attorney fees and costs against a party who requests a trial de novo but fails to improve the arbitrated outcome at trial. "Once a party requests a trial de novo . . . the clerk must seal the arbitration award. The trial de novo is then conducted as though no arbitration proceeding had occurred." Malted Mousse, Inc. v. Steinmetz, 150 Wn.2d 518, 528, 79 P.3d 1154 (2003). This includes that no "pleading, brief, or statement (written or oral) during the trial de novo may refer to the arbitration proceeding." Id.
Since the enactment of MAR legislation attorneys on both sides of the bar have offered heated legislative testimony about its efficacy and fairness. Plaintiffs' bar has argued that MAR promotes access to justice for small cases. The defense bar has often argued that MAR raises defense costs by imposing an additional hurdle to a jury trial and by imposing a biased tribunal that is heavily populated by plaintiff-leaning arbitrators wherein the defense has limited access to discovery. Since 1979, the plaintiffs' bar has lobbied to successively ratchet up the MAR limit. In 2003, MAR had a limit of $35,000 and, at present, the MAR limit is $50,000, where it will remain until September 1, 2018, when it is raised to $100,000. This arbitration limit applies to each claimant in MAR; thus, when there are two or more claimants in one lawsuit, each claimant is entitled to claim the maximum MAR amount. See Twitchell v. Kerrigan, 175 Wn. App. 454, 463, P.3d 1025 (2013). MAR is, therefore, not strictly limited to low-value cases. Increasingly, attorneys are joining multiple claimants in a single action, thereby raising the amount for determination by an arbitrator in MAR.
Although MAR does substantially curtail discovery and creates an additional hurdle to securing a trial by jury, MAR does not necessarily result in the dire outcomes often predicted by the defense bar; nor does MAR necessarily result in the easy wins hoped for by plaintiffs' counsel. Attorneys can often ameliorate the restrictions of MAR discovery by using MAR arbitration motions to secure additional discovery and by using expert testimony early in the case. Removal to federal court remains an option in cases where the amount in controversy exceeds the removal minimum of $75,000 and the parties are residents of different states. Under the amended MAR legislation, MAR remains inapplicable to claims other than for monetary damages.
Lewis Brisbois' Washington attorneys have arbitrated numerous matters to favorable outcomes in MAR—including having secured full defense adjudications in many cases. The Washington attorneys of Lewis Brisbois have extensive experience in commercial, insurance, and defense litigation at trial and in arbitration.
A copy of Washington's newly enacted MAR legislation can be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
