Arbitration

Arbitration is defined as a “dispute-resolution process in which the disputing parties choose one or more neutral third parties to make a final and binding decision resolving the dispute.” ARBITRATION, Black’s Law Dictionary (11th ed. 2019) (emphasis added). The goal is to have neutral arbitrators. But for several reasons, that’s not always the case.

A possible outcome from the presuit medical malpractice process is that damages can be resolved through arbitration. But it’s important to note that “[v]oluntary binding arbitration . . . [does] not apply to rights of action involving the state or its agencies or subdivisions, or the officers, employees, or agents thereof . . . .” § 766.207(1), Fla. Stat. In other words, the arbitration process does not apply to claims involving the state of Florida.

For all other parties, the presuit process could lead to arbitration in multiple ways.

Initiating Arbitration

Under section 766.106(3)(b), a prospective defendant or their insurer or self-insurer could make “an offer to arbitrate in which liability is deemed admitted and arbitration will be held only on the issue of damages.” (Emphasis added.) And that “offer may be made contingent upon a limit of general damages.” Id.

Or “[u]pon the completion of presuit investigation with preliminary reasonable grounds for a medical negligence claim intact, the parties may elect to have damages determined by an arbitration panel.” § 766.207(2), Fla. Stat. (emphasis added). This “election may be initiated by either party by serving a request for voluntary binding arbitration of damages within 90 days after service of the claimant’s notice of intent to initiate litigation upon the defendant.” Id.

“Upon receipt of a party’s request for such arbitration, the opposing party may accept the offer of voluntary binding arbitration within 30 days.” § 766.207(3), Fla. Stat. But “in no event shall the defendant be required to respond to the request for arbitration sooner than 90 days after service of the notice of intent to initiate litigation under s. 766.106.” Id. A party’s “acceptance within the time period provided by this subsection shall be a binding commitment to comply with the decision of the arbitration panel.” Id. But any insurance liability limits remain. Id.

Arbitration Procedure

Various sections of Florida’s Administrative Procedure Act, found in Chapter 120, Florida Statutes, control the evidentiary standards. The arbitration must be “conducted by all of the arbitrators, but a majority may determine any question of fact and render a final decision.” § 766.207(7)(l), Fla. Stat. “The chief arbitrator shall decide all evidentiary matters.” Id.

The panel “shall be composed of three arbitrators, one selected by the claimant, one selected by the defendant, and one an administrative law judge furnished by the Division of Administrative Hearings who shall serve as the chief arbitrator.” § 766.207(4), Fla. Stat. If there are “multiple plaintiffs or multiple defendants, the arbitrator selected by the side with multiple parties shall be the choice of those parties.” Id. And if those multiple cannot agree on their arbitrator, “each of the multiple parties shall submit a nominee, and the director of the Division of Administrative Hearings shall appoint the arbitrator from among [those] nominees.” Id.

Section 766.203(5) requires that arbitrators “be independent of all parties, witnesses, and legal counsel, and no officer, director, affiliate, subsidiary, or employee of a party, witness, or legal counsel may serve as an arbitrator in the proceeding.”

An arbitrator’s pay rate is “set by the chief judge of the appropriate circuit court by schedule providing for compensation of not less than $250 per day nor more than $750 per day or as agreed by the parties.” § 766.207(6), Fla. Stat. “In setting the schedule, the chief judge shall consider the prevailing rates charged for the delivery of professional services in the community.” Id.

The result is binding and if the parties have agreed to arbitration, it is the sole remedy for the claim against any participating defendant. § 766.207(7), Fla. Stat. But, even if you are in the arbitration process, the parties can agree to settle at any time. § 766.207(7)(l), Fla. Stat.

Damages in Arbitration

Damages in arbitration are “awarded as provided by general law, including the Wrongful Death Act” but there are also significant additional limitations. Id.

• Noneconomic damages, like pain and suffering, are “limited to a maximum of $250,000 per incident, and shall be calculated on a percentage basis with respect to capacity to enjoy life.” § 766.207(7)(b), Fla. Stat. For example, “a finding that the claimant’s injuries resulted in a 50-percent reduction in his or her capacity to enjoy life would warrant an award of not more than $125,000 noneconomic damages.” Id.
• “Net economic damages shall be awardable, including, but not limited to, past and future medical expenses and 80 percent of wage loss and loss of earning capacity, offset by any collateral source payments.” § 766.207(7)(a), Fla. Stat.
• Future economic losses must be paid by “periodic payments pursuant to s. 766.202(9) and shall be offset by future collateral source payments.” § 766.207(7)(c), Fla. Stat.
• Punitive damages are not recoverable. § 766.207(7)(d), Fla. Stat.
• Defendants are “responsible for the payment of interest on all accrued damages with respect to which interest would be awarded at trial.” § 766.207(7)(e), Fla. Stat.
• Defendants must “pay the claimant’s reasonable attorney’s fees and costs, as determined by the arbitration panel, but in no event more than 15 percent of the award, reduced to present value.” § 766.207(7)(f), Fla. Stat.
• Defendants are obligated to “pay all the costs of the arbitration proceeding and the fees of all the arbitrators other than the administrative law judge.” § 766.207(7)(g), Fla. Stat.
• Defendants who arbitrate are “jointly and severally liable for all damages assessed pursuant to this section.” § 766.207(7)(h), Fla. Stat. This means each defendant is responsible to pay all the damages of all the defendants. But “[a]ny defendant paying damages [where there are multiple defendants] shall have an action for contribution against any nonarbitrating person whose negligence contributed to the injury.” § 766.208(6), Fla. Stat. See section 766.208, Florida Statutes, for more on arbitration involving multiple defendants.

Miscellaneous Information on Offer or Acceptance to Arbitrate

A “defendant’s or claimant’s offer to arbitrate shall not be used in evidence or in argument during any subsequent litigation of the claim following the rejection thereof.” § 766.207(7)(i), Fla. Stat. And under § 766.207(7)(j), the “making or accepting an offer to arbitrate shall not be admissible as evidence of liability in any collateral or subsequent proceeding on the claim.”

Under 766.207(k), “[a]ny offer by a claimant to arbitrate must be made to each defendant against whom the claimant has made a claim.” And, “[a]ny offer by a defendant to arbitrate must be made to each claimant who has joined in the notice of intent to initiate litigation. Id.

In the event there is insurance, the “insurer or self-insurer shall not offer to arbitrate or accept a claimant’s offer to arbitrate without the written consent of the defendant.” § 766.207(8), Fla. Stat.

Failure to Offer or Accept Arbitration

Florida law states that “voluntary binding arbitration is an alternative to jury trial and shall not supersede the right of any party to a jury trial.” §766.208(1), Fla. Stat. But failing to offer or accept arbitration in a medical malpractice case has consequences.

If neither side requests or agrees to arbitration, the case will proceed to litigation, where a jury trial is generally the way these cases are decided. See § 766.209(2), Fla. Stat.; § 766.209(5), Fla. Stat.

But if plaintiff offers arbitration and a defendant refuses, “[t]he claim shall proceed to trial, and the claimant, upon proving medical negligence, shall be entitled to recover damages . . . , prejudgment interest, and reasonable attorney’s fees up to 25 percent of the award reduced to present value.” § 766.209(3)(a), Fla. Stat. The “award at trial shall be reduced by any damages recovered by the claimant from arbitrating codefendants following arbitration.” § 766.209(3)(b), Fla. Stat.

If, on the other hand, defendant offers arbitration and plaintiff refuses, “[t]he damages awardable at trial shall be limited to net economic damages, plus noneconomic damages not to exceed $350,000 per incident.” § 766.209(4)(a), Fla. Stat. “Net economic damages reduced to present value shall be awardable, including, but not limited to, past and future medical expenses and 80 percent of wage loss and loss of earning capacity, offset by any collateral source payments.” § 766.209(4)(b), Fla. Stat. And “[d]amages for future economic losses shall be awarded to be paid by periodic payments pursuant to s. 766.202(9), and shall be offset by future collateral source payments.” § 766.209(4)(c), Fla. Stat.

Payment of Arbitration Award

Within twenty days of the arbitration ruling, the defendant must either pay the award, including interest, to the claimant; or submit any dispute among multiple defendants to arbitration. § 766.211(1), Fla. Stat. Beginning ninety days from the arbitration award, interest accrues at 18% per year. § 766.211(2), Fla. Stat.

Arbitration Appeals and Enforcement

Even though arbitration is not processed by an active judge, parties can seek help from the courts to appeal and/or enforce arbitration awards.

Under 766.212(1), an appeal of an arbitration award “shall be taken to the district court of appeal for the district in which the arbitration took place, shall be limited to review of the record, and shall otherwise proceed in accordance with s. 120.68.” The appellate court can review the “amount of an arbitration award or an order allocating financial responsibility, the evidence in support of either, and the procedure by which either is determined.” § 766.212(1), Fla. Stat. However, even if a party appeals an arbitration award, that does not stay (or stop) the award, nor does it stay interest from accruing. § 766.212(2), Fla. Stat. But the appellate court “may order a stay to prevent manifest injustice.” Id.

As to enforcement, under 766.212(3), “[a]ny party to an arbitration proceeding may enforce an arbitration award or an allocation of financial responsibility by filing a petition in the circuit court for the circuit in which the arbitration took place.” But the “petition may not be granted unless the time for appeal has expired.” Id. Also, “[i]f an appeal has been taken, a petition may not be granted with respect to an arbitration award or an allocation of financial responsibility that has been stayed.” Id.

Lastly, under section 766.212(4), “[i]f the petitioner establishes the authenticity of the arbitration award or of the allocation of financial responsibility, shows that the time for appeal has expired, and demonstrates that no stay is in place,” it can have a court “enter such orders and judgments as are required to carry out the terms of the arbitration award or allocation of financial responsibility.” Those “orders are enforceable by the contempt powers of the court; and execution will issue, upon the request of a party, for such judgments.” Id.

If you or anyone you know needs an attorney to seek justice in a medical malpractice case, please call us at 754-400-5150 or contact us online. Let the Law Offices of Evan M. Rosen serve you!