Who Pays for Arbitration in Washington State?

September 16, 2022

Have you been ordered to participate in mandatory arbitration in Washington State? If so, you may wonder what arbitration is, how it works, and who will pay for the costs of the process. You might also wonder if you need to have a lawyer when you are involved in the arbitration process.

What Is Arbitration?

Arbitration, to put it simply, is an alternative to the traditional court process of litigation. A judge isn’t the presiding official. Instead, a neutral third-party acts as an arbitrator. Arbitration usually takes place in a conference room or some other meeting room outside the traditional courtroom.

Typically, arbitration is a less formal process than litigation, and it’s also less expensive. Although, the price of the process depends on the arbitrator. Often, an arbitration process resolves disputes faster because there is no lengthy court docket like there is with a traditional litigation process.

Binding or Nonbinding Arbitration in Washington

Two forms of arbitration are available for dispute resolution. Binding arbitration is a form of arbitration where the parties agree to follow the arbitrator’s decision. The courts will enforce the decision.

On the other hand, nonbinding arbitration is a form of arbitration by which either person can dispute the arbitrator’s decision through a court proceeding. When one of the parties disputes the arbitration solution, it’s as if you never went through the arbitration process. Of the two forms of arbitration, binding is the more common form to deal with.

When Is Arbitration Beneficial?

Like other legal processes, arbitration is most often used in specific scenarios. You will most likely use arbitration for:

  • Family law matters
  • Business/consumer disputes
  • Labor disputes

Often, contracts contain an arbitration clause that makes arbitration a dispute resolution requirement. When the arbitrator has made a decision, that decision is legally binding with no chance for appeal.

The Arbitration Process in Washington

Arbitration is a process in which the disputing parties bring their dispute before an arbitrator who acts like an informal judge in their case. The arbitrator will listen to both sides of the dispute at the arbitration hearing. After hearing both sides, the arbitrator will decide how to resolve the argument and make an arbitration award.

Like court, arbitration has specific rules. However, you don’t have to worry about formal rules of evidence or how to make motions in an arbitration setting. You won’t have to write lengthy briefs detailing what happened, and you don’t have to worry about rules regarding collecting and presenting evidence.

With the arbitration process, you could be allowed to use an informal discovery process and present documents of what you found. In other words, you can do your own investigation of your case and collect evidence to support your position. You might also be allowed to interview witnesses. Remember, the testimony in an arbitration proceeding, like in a courtroom, is given under oath.

When the arbitration process is complete, the arbitrator has thirty days to issue a final decision in writing. The arbitrator must serve all parties to the proceedings with a copy of the decision. Proof of service of the decision must be filed with the court, and that service must conform to the rules for the superior court in section CR 5(b).

Advantages and Disadvantages of Arbitration

Arbitration can be a good choice for a simple dispute that can easily be resolved in one day. However, in some instances, arbitration is not advantageous to the disputants. If you aren’t sure if arbitration is the right choice, knowing the advantages and disadvantages of the process might help you.

Advantages of Arbitration

Typically, arbitration is a faster, more straightforward process than litigation. It offers more flexibility and is more efficient. Rather than the public forum of a courtroom, disputes are settled in a private setting which often leads to a less hostile environment. Another advantage is the parties involved can select an arbitrator that has knowledge in the field encompassed by the arbitration rather than relying on a judge who may not have such knowledge.

Disadvantages of Arbitration

Now for the disadvantages. A binding arbitration ruling is static; it can’t be appealed, unlike a traditional court ruling. The only way to set aside a binding arbitration ruling is if the arbitrator is proven to be biased or violated public policy. You also don’t have an automatic right to discovery in the arbitration process, but you can include a discovery requirement in your arbitration clause or your rules of arbitration.

Mandatory Arbitration

In Washington State, arbitration is sometimes made mandatory in areas where there is a population greater than 70,000. This is especially the case if the only relief sought in the dispute is monetary restitution. Mandatory arbitration is overseen by the court system, and it can only be used if the dispute is for a value of $35,000 or less.

Arbitration in Washington State follows Chapter 7.06 RCW, mandatory arbitration of civil actions, rules that the supreme court adopted as the superior court mandatory arbitration rules. Any local rules for mandatory arbitration that the superior court in that region has adopted also apply. If the superior court has not adopted Chapter 7.06 RCW, the local rules for mandatory arbitration that apply to King County apply. The exception is that the presiding superior court judge must accept the duties of the director of arbitration.

If one of the parties to the matter to be arbitrated has already filed a petition with the court regarding the matter set for arbitration, all of the other parties to the proceedings must file a reply with the arbitrator. If they haven’t previously filed their reply, they must do so within ten days of the arbitrator being appointed or selected.

Cost of Arbitration in Washington State

Both state and local statutes govern arbitration in Washington State. Counties that allow arbitration, and those that are subject to mandatory arbitration, have filing fees in place. Those fees range from $200-$250, depending on the area. For example, Spokane has a $200 filing fee, while King County and Snohomish County require a $250 filing fee.

These are simply the fees to file for the arbitration process to begin. Other costs associated with arbitration include attorney’s fees, expert witness fees, and compensation for the arbitrator’s services. The arbitrator sets their own compensation rate, which must be paid unless the parties and the arbitrator reach a different agreement before the arbitration process begins.

The fees are agreed on up front and documented in the written arbitration agreement between the arbitrator and the parties to the dispute. This written agreement must also include the terms of the arbitration and the process that will be followed to conduct the arbitration.

Who Is Responsible for the Costs of Arbitration in Washington State?

The filing fees for arbitration must be paid upfront to the superior court in the county where you file the petition. Those fees are just the tip of the iceberg of arbitration fees. If you can’t afford those fees, each county has forms you can complete requesting a reduction or waiving the filing fees.

Typically, the parties participating in arbitration must accept an equal portion of the arbitration costs, including the arbitrator’s compensation. Each person participating in the arbitration process must pay their own legal fees as well as the costs for any expert witnesses they may have present evidence. The fee agreement becomes part of the written arbitration agreement we mentioned earlier.

The arbitrator can determine who pays what portion of the arbitration fees. The arbitrator can order any costs, including attorneys’ and expert witness fees, to be paid by any party to the proceedings. This must be done in an effort to preserve justice.

If the matter isn’t resolved in arbitration, it will revert to a litigation matter. In that case, the court presiding over the case can determine who pays the fees. The judge can direct parties to pay both arbitration fees and court fees depending on the resolution of the matter.

Why You Should Have A Lawyer During Arbitration

You aren’t required to retain an attorney for an arbitration proceeding. However, it is typically a good idea to do so. Here are a few of the reasons you might want to have an attorney assist you with the arbitration process:

  • The decision made by the arbitrator affects your rights, and in binding arbitration, the decision is final.
  • It can be difficult to present a well-founded case without the assistance of an attorney. If there are laws that support your position, the attorney will be able to present those and help you create a more complete argument.
  • If the arbitration is a dispute with a company or your employer, the process often favors a more powerful entity like a large company. An attorney helps to keep the proceedings fairer.
  • The other party in the proceeding may be more familiar with the process or the specific arbitrators in the area. You want someone on your side who knows the process as well, if not better than the other party.
  • The decision made in arbitration can significantly affect your life, such as whether you can continue your job or whether you will lose money. An attorney can help you reach a more favorable outcome for the proceedings.

The Takeaway

The arbitration process can seem overwhelming if you attempt to handle it yourself. A qualified attorney from Aberdeen Law can help guide you through the process of arbitration in Washington State.

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