HOUSE BILL ANALYSIS

                  HB 1759

Title:  An act relating to mandatory arbitration of civil actions.

Brief Description:  Changing provisions relating to civil actions subject to mandatory arbitration.

Sponsors:  Representatives Constantine, Lambert, Hurst, Barlean, Dickerson, Gombosky, Sullivan, Edmonds and Lantz.

                    Brief Summary of Bill

CIncreases the dollar limits on cases subject to mandatory arbitration.

CProvides an offer or compromise procedure that effects the award of reasonable attorney fees and costs when an arbitration award is appealed to superior court.

HOUSE COMMITTEE ON JUDICIARY

Staff:  Bill Perry (786-7123).

Background:

Arbitration is a nonjudicial method for resolving disputes in which a neutral party is given authority to decide the case.  Arbitration is intended to be a less expensive and time consuming way of settling problems than taking a dispute to court.  Parties are generally free to agree between themselves to submit an issue to arbitration.  In some cases, however, arbitration is mandatory.

A statute allows any superior court, by majority vote of its judges, to adopt mandatory arbitration in prescribed cases.  In counties of 70,000 or more population, the county legislative authority may also impose this mandatory arbitration.  This mandatory arbitration applies to cases in which the sole relief sought is a money judgment of $15,000 or less.  By two-thirds vote, the judges of the superior court may raise this limit to $35,000.  These limits were set at their current levels in 1988, when they were raised from $10,000 and $25,000, respectively.

An award by an arbitrator may be appealed to the superior court.  The superior court will hear the appeal "de novo."  That is, the court will conduct a trial on all issues of fact and law, essentially as though the arbitration had not occurred.

The mandatory arbitration statute  provides that supreme court rule will establish the procedures to be used in mandatory arbitration.  The statute also provides that the supreme court rules may allow for the recovery of costs and reasonable attorney fees from a party who demands a trial de novo and fails to improve his or her position on appeal.  The determination of whether or not the appealing party's position has been improved is based on the amount awarded in arbitration compared to the amount awarded at the trial de novo.

Summary of Bill:

The basic limit on the amount of money damages sought in a case subject to mandatory arbitration is raised from $10,000 to $25,000.  The limit than can be adopted by a two-thirds vote of the superior court judges is raised from $35,000 to $50,000.

An "offer of compromise" procedure is provided for mandatory arbitration cases that are appealed to the superior court.

CA nonappealing party may serve an appealing party with a written offer to settle the case.

CIf the appealing party does not accept the offer, the amount of the offer becomes the basis for determining whether the party that demanded the trial de novo fails to improve his or her position on appeal for purposes of awarding attorney fees and costs under the court rules.

CAt a trial de novo, the offer of compromise will not be made known to the trier of fact until after a judgment is reached in the trial.

CThe award of attorney fees and costs against an appealing party who fails to improve his or her position is made mandatory in statute.  The superior court is also authorized to assess these same fees and costs against a party who voluntarily withdraws a request for a trial de novo.

CFor purposes of these awards, "costs" include any costs provided for by statute or court rule, plus expenses related to expert witnesses that are found to have been reasonably necessary after the appeal was filed.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

                 Office of Program Research