Barry P. Goldberg
The strange case of the UM/UIM arbitration There are many twists and turns in Uninsured and Underinsured Motorist arbitration
The insured and insurer agree that
there should be Uninsured or Underinsured Motorist arbitration in the claim – now what? The California Uninsured/
Underinsured Motorist Law (UM/UIM), Insurance Code section 11580.2 was designed to provide a prompt and relatively inexpensive resolution of disputes between an insured and his or her insurer as an alternative to full-scale litigation and a trial. For the most part, the UM/UIM law suc- ceeds and is uniquely suited for resolving standard automobile collision cases. However, even though UM/UIM arbitra- tions are common, there is no clear uni- form agreement on how these arbitrations should be handled. In fact, the nuances in the law, the competing rules, and the cus- toms that have developed among counsel and arbitrators, can make for a “strange” experience if counsel is not fully aware of the various possibilities. This article provides some suggestions
to make the arbitration procedures uniform and how to reduce the arbitration time-table to achieve the prompt and inexpensive reso- lution envisioned by the UM/UIM law. In addition, there are some oddities in the vari- ous rules which may provide both pitfalls and opportunities to the successful comple- tion of the arbitration. The centerpiece of the UM/UIM law is
that the cases are submitted to a binding arbi- tration with the cost borne equally by the insured and the insurer. Despite what the insurance policy may say, “The arbitration shall be conducted by a single neutral arbitra- tor.” (Ins. Code, § 11580.2 (f).) Interestingly, that section neither explains nor suggests how such an arbitrator should be selected. Many policies are silent on the issue.
The selection process When demanding arbitration, a
party should provide a list of acceptable neutrals from which the responding party can select an acceptable candidate. The demand should also invite a competing list from the responding party in the event that the initial list is unacceptable. Care should
62— The Advocate Magazine JUNE 2011
be given to list candidates that have a rea- sonable chance of being selected by the other party. If the list is decidedly biased, the arbitrator selection process can be pro- longed. This is contrary to the advantages in the UM/UIM law favoring a prompt resolution of claims. If the selection process gets bogged
down, either party is entitled to file a Petition to Compel Arbitration pursuant to section 1281.6 of the Code of Civil Procedure. An immediate notice of motion for an order selecting the arbitrator should accompany the petition. The original list of arbitrators should be presented as viable candidates from whom the court can make its selection. Although the UM/UIM law sets out
certain guidelines which should be fol- lowed, it is silent on many of the proce- dures which many attorneys assume apply to the arbitration. UM/UIM arbitrations are considered “private arbitrations” and therefore are not necessarily subject to the rules for judicial arbitrations as found in Code of Civil Procedure section 1282. Moreover, the California Rules of Court, concerning arbitrations, also do not neces- sarily apply for the same reasons. Absent an agreement in advance, arbitrators may apply a combination of some, all or none of the various procedures listed in those statutes and rules.
Acceptance of rules The solution to these variables can be
solved at the outset by agreement. Once the case has been accepted for arbitration, coun- sel should simply request in writing an agree- ment and signed acknowledgement that the proceedings will be governed by Code of Civil Procedure section 1282, Insurance Code section 11580.2 and California Rules of Court, rule 3.823. Acceptance of these rules by both parties will provide for an orderly and predictable sequence up to and including the arbitration. Once an arbitrator is selected, the arbi-
tration should be set as soon as reasonably possible. In the event that one party will not agree to a prompt date, the arbitrator
should become immediately involved and set the date. The arbitrator has the right to schedule the matter as he or she sees fit. (Code Civ. Proc.., § 1282.2(a)(1).) Because most UM/UIM arbitrations involve limited witnesses and discovery, the arbitrator is like- ly to set the matter reasonably promptly, even over the objection of a party.
Odd exceptions Insurance Code section 11580.2(f)
mandates that the normal discovery statutes, commencing with section 2016.010 of the Code of Civil Procedure shall apply to the proceedings, with certain unfamiliar exceptions. The first odd exception of which counsel should be aware is that depositions can be taken, without leave of court, relatively shortly after the subject accident, within 20 days. (Ins. Code, § 11580.2(f) (3).) That means witnesses and parties can be deposed well before an insurer has the case designated as a UM/UIM file and before the claim has been assigned to counsel. In addition, interrogatories and requests for admissions can be served 20 days after the subject acci- dent, as well. (Ins. Code, §11580.2(f)(6).) The second odd exception is that
Code of Civil Procedure section 2025.010, dealing with requiring a party to appear for a deposition by notice, is not applicable, pursuant to Insurance Code section 11580.2(f)(4). Accordingly, witnesses and parties must be subpoenaed to their deposi- tions. Although insureds and insurers regu- larly ignore this rule and schedule deposi- tions both informally and by notice, a deponent cannot be compelled to attend his or her deposition without a properly served subpoena. This can create a serious problem if a party waits until the last minute to notice an important deposition. By the time a subpoena can be served, it may be too late to take the deposition prior to the discovery cut-off, 15 days before the arbitration.
Moreover, specifically, if a dispute aris-
es over scheduling depositions incorrectly set by notice, arbitrators are not given the power to decide those discovery disputes,
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