Sample Arbitration Agreement

This example binding arbitration agreement is provided an example agreement that outlines the terms and conditions under which any disputes arising from a car accident claim will be resolved through arbitration, rather than through traditional court proceedings.

This sample agreement sets forth the rights, responsibilities, and procedures that will govern the arbitration process, providing clear guidance for all involved. By agreeing to these terms, both parties, of course, commit to giving the arbitrator complete power to decide your case.  So choose your arbitrator wisely.

Example Car Accident Arbitration Agreement

Plaintiffs Clint Denver and Julia Denver, (hereinafter referred to as “Plaintiffs”) by their attorneys, Ronald V. Miller, Jr. Laura G. Zois, and Miller & Zois, LLC; and Defendants Gilberto J. Martinez and J&J Jakob Enterprise, Inc.(“Defendants”) by their attorney,Michael J. Talbott, hereby agree that the case known as Denver v. Martinez, which arises from an alleged occurrence on or about April 28, 2023 (the “occurrence”), and is currently pending in the Circuit Court for Montgomery County is to be dismissed with prejudice prior to the trial and it is further agreed that Plaintiffs’ claims will be resolved through binding arbitration according to the terms set forth below:

1. Claims: Cary Denver and Leanne Denver each have their own claim for economic and non-economic damages and share a claim for loss of consortium. The parties desire that all claims asserted by both plaintiffs against both defendants shall be submitted to the arbitrator, including any and all claims of negligence, contributory negligence, economic damages, non-economic damages, causation, and permanency.
2. Arbitrator: The parties agree that Judge Christopher Kline, Esq., will serve as the arbitrator, and that the arbitrator’s fees will be shared equally by the parties.
3. Issues: The binding arbitration will resolve all issues regarding liability and damages. The decision of the arbitrator is final. Each party agrees that no appeal may be taken from the arbitrator’s decision.
4. High/Low Agreement: The parameters for the damages award are as follows: The “high” or maximum amount the Plaintiffs may recover is $1,750,000.00, which is the amount of automobile liability insurance that Defendants maintained through State Farm Mutual Automobile Insurance Company. There is no other applicable liability insurance maintained by Defendants and the Plaintiffs have relied upon this representation made by the Defendants in making the decision to resolve this case by binding arbitration. The “low” or minimum amount that the Plaintiffs will recover is $800,000.00. Plaintiffs are guaranteed to receive the amount of $800,000.00 from Defendants regardless of the arbitrator’s decision on any of the issues to be presented at the arbitration including a Defendants’ verdict on the issue of liability. The existence and terms of this “high/low agreement” shall not be disclosed to the arbitrator.
5. Notification of the Court: This case is specially assigned to the Honorable Ronald M. Rubin. The parties agree that on June 20, 2024, they will jointly notify Judge Rubin that a Binding Arbitration Agreement has been reached and that the case should be dismissed with prejudice.
6. Entry of dismissal: After notifying Judge Rubin that the parties have agreed to binding arbitration, the parties agree to execute and file a Stipulation of Dismissal with prejudice, with all open costs to be paid by Defendants. The parties agree that Plaintiffs may not reinstate the Circuit Court case or file any lawsuit against the Defendants seeking any damages or other relief arising from the auto accident described in the pending Circuit Court case, if the arbitration goes forward and the defendants comply with the terms of this agreement. The only future claims or lawsuits permitted will be any action needed to enforce the terms of this Binding Arbitration Agreement.
7. Arbitration Hearing: The arbitration hearing will take place between July 19-22, 2024 at Miller & Zois.
8. Expert Opinion Evidence: The parties agree that opinion evidence from physician expert witnesses shall be presented by way of de bene esse deposition or by live testimony, and that written reports of medical expert witnesses shall not be used as evidence at the arbitration, unless testimony from that witness has also been admitted. Non-medical opinion evidence may be admitted by way of written report, as long as any such reports have been exchanged by the parties during discovery.
9. Authenticity and Evidence: The parties stipulate to the authenticity of all materials exchanged in discovery so that records custodians are not required. Further, any and all items submitted into evidence will be admissible, if (1) they have been previously exchanged in discovery, (2) the items submitted into evidence do not violate any of the terms of this Arbitration Agreement, and (3) the evidence sought to be admitted complies with the Maryland Rules of Evidence. If either party seeks to submit any item into evidence, the opposing party has the right to object to the admission of the item into evidence. The determination of what evidence will be admitted shall be solely within the discretion of the arbitrator.
10. Admissibility of Medical Bills: The parties agree that all of the Plaintiffs’ medical bills (or a summary thereof) that have previously exchanged in discovery are authentic, fair and reasonable and shall be admitted into evidence at the arbitration. However, Defendants will retain the ability to present evidence and/or argument as to whether the bills are medically necessary and or causally related to the occurrence.
11. Satisfaction of Award and Releases: Prior to the tender of any draft in satisfaction of any arbitration award, Plaintiffs will execute a general release. Payment in satisfaction of any award shall be made no later than thirty days after to the execution and production of the general release.
12. Liens: Plaintiffs, all parties, and all Counsel further agree that the Plaintiffs will be solely responsible for the satisfaction of any and all liens, related or allegedly related to this occurrence including but not limited to Workers’ Compensation liens, liens related to the repair of the vehicle owned or operated by the Plaintiff(s), medical liens, disability benefit liens, Social Security liens, Medicare liens, Medicaid liens and all other liens; and Counsel for the Plaintiffs are solely responsible for protecting all liens.
13. Choice of law: The parties agree that the arbitrator shall apply Maryland law in resolving the issues to be decided at the arbitration. The arbitration itself shall take place pursuant to the Maryland Uniform Arbitration Act.
14. Advice of Counsel: Plaintiffs understand and have been advised by their attorneys that this Arbitration Agreement is binding, that they have waived their right to a jury trial and all appeal rights, and that the lawsuit in the above-captioned case must be dismissed before the scheduled trial date. Similarly, the Defendants
    understand and have been advised by their attorney that this Arbitration Agreement is binding, that they have waived their right to a jury trial and all appeal rights, and that the lawsuit in the above-captioned case must be dismissed before the trial date.
15. Drafting of the Agreement: All parties expressly agree that the drafters of this Agreement have done so solely for the convenience of all parties; and any terms of this Agreement, or any ambiguity or confusion regarding the interpretation, construction and/or meaning of this Agreement, will not be decided or construed in favor of the non-drafting party(ies).
16. Quality of Representation: The Plaintiffs are represented by John B. Bratt and Laura Zois. The Plaintiffs are satisfied with the legal representation that has been provided by their attorneys, and their attorneys have fully explained this Agreement and answered any questions to Plaintiffs’ satisfaction.
17. Actual Authority: All attorneys who sign this Agreement have the full expressed authority of their client(s) to fully bind their clients to the terms of this Agreement.
18. Representations of Executing Parties: All of the individuals who have signed this Agreement have: a) carefully read the entire Agreement, b) are of sound mind, c) have had this Agreement fully explained by the parties’ attorney, d) fully understand its contents, e) entered into this Agreement voluntarily and with full authority, f) have not been pressured or coerced to enter into this Agreement, g) believe the terms of this Agreement to be fair and h) will be bound by all of terms of this Agreement.

VERY IMPORTANT: SIGN THIS AGREEMENT ONLY AFTER YOU HAVE READ, FULLY UNDERSTAND AND AGREE TO ALL OF THE TERMS IN THIS BINDING ARBITRATION AGREEMENT.

The High Low Agreement in an Arbitration

The battlefield in negotiating an arbitration agreement is usually over the high-low.  In the case in the arbitration agreement template above, there was a meeting of the minds to arbitrate the case from the very beginning but it took months to hammer out the high-low.

A high-low arbitration agreement is a pre-arranged agreement between the parties involved in a dispute that sets a minimum and a maximum limit on the amount of compensation that the arbitrator can award.  This type of agreement is often used in personal injury cases, including car accident claims, to provide a range within which the arbitration award must fall, thereby limiting the financial exposure and risk for both parties.  Few insurance companies will agree to an arbitration unless the high is capped at the policy limits.

Example of How a High-Low Works

Imagine a car accident case where the plaintiff is seeking damages for injuries sustained in the accident, and the defendant is disputing the extent of liability and damages. Both parties agree to arbitration but want to manage their financial risks. They might agree on a high-low range with a minimum of $50,000 and a maximum of $200,000. In this scenario, the arbitrator will conduct the hearing and determine an award based on the merits of the case.

Regardless of the arbitrator’s decision, the final award will be adjusted to fall within the agreed high-low range. For instance, if the arbitrator awards $30,000, the plaintiff will receive the minimum amount of $50,000. If the arbitrator awards $250,000, the plaintiff will receive the maximum amount of $200,000. If the arbitrator awards an amount within the range, such as $100,000, the plaintiff will receive the exact award determined by the arbitrator.

• Pros and cons of arbitration