Wash. Legislature Approves Bill That May Raise Mandatory Arbitration Settlements

The Washington State legislature has approved a bill that could lead to higher settlements in mandatory arbitration cases.

The House passed Senate Bill 5373 last week, one week before the 2002 session is to adjourn, and sent it to Gov. Gary Locke for his consideration. The legislature may have to come back in a special session if budgetary and transportation issues are not resolved by then.

“SB 5373 will put pressure on defendants to settle at higher levels when an arbitrator’s award is appealed,” National Association of Independent Insurers (NAII) Northwest Manager Michael Harrold, commented.

Current law provides that an appealing party must pay attorney’s fees and costs if it fails to improve its position as determined from the arbitrator’s award. SB 5373 would allow a non-appealing party who makes a compromise offer to have the offer, rather than the arbitrator’s award, stand as the new benchmark for determining improvement of position if the appeal continues.

“SB 5373 would encourage defendants to settle at higher levels due to the increased risk of failing to improve their position at appeal,” Harrold said. A number of unsuccessful amendments to the bill were offered in the House Judiciary Committee and on the House floor. The Washington Trial Lawyers’ Association has sought to get such a bill enacted for the last five years, he noted.

Bills that died during the closing days of the session included:

SB 5028, which would have shifted the burden of proof regarding reasonable and customary medical fees to healthcare providers instead of the individuals protesting the fees. NAII and other insurers opposed the bill, which was supported by the state Trial Lawyers Association.

SB 6525, which would have banned the sale of single-premium credit insurance policies associated with a mortgage loan in Washington. In declining to approve the bill prior to the March 8 cut-off deadline, some House members expressed concern that the bill would deny insurance choices to consumers.

House Bill 1118, on the use of cameras to identify motor vehicles that run red lights, railroad crossing barricades or violate speeding laws.

SB 6352, preventing the masking of driving offenses.

Topics Washington