The two areas for defined dynamics within claims are facts of the loss not in dispute (such as two cars backing into each other in a parking lot) and facts of the loss in dispute (such as green light/red light). At this point, the focus is on the facts of the loss and not who may or may not be at fault. These dynamics are important as they help qualify the evidence necessary to successfully support and negotiate the subrogation demand or persuade an arbitrator to rule in your favor if you go to hearing.

Fundamental arbitration advocacy says to work within the evidence, knowing what is clearly in dispute and what is not. (Photo: Shutterstock)

Planning for a successful hearing

The variables inherent in so many auto claims include point of impact, eyewitness accounts, transcribed statements of each party's insured, photographs, adjuster's notes and police reports. While not an all-encompassing list, many of these are vital to any subrogation demand and the negotiations that take place for a party seeking to recover. However plausible to establish fault, what if that is not enough to get the check issued and you are headed to subrogation arbitration? What approaches might be helpful to succeed at hearing?

The first thing to establish is the kind of case going to arbitration. Chances are you already identified much of that with the initial subrogation demand. If not, consider whether this case is one where the facts of the loss are not in dispute by the parties, such as two cars backing into each other across an aisle parking lot or two cars side-swiping each other on the freeway. Or is it a claim where the facts are very much in dispute between the parties, such as a claim where the asserted tortfeasor turned left at the intersection on a changing light or swerved around a truck backing up in the middle of the road.

Next, identify all possible scenarios including position of the vehicles, points of impact, speed, conditions and the negligence laws applicable to the fact pattern. From there the theory begins to take shape around how the accident occurred and an all-important theme develops that will be used to traverse the entirety of the storyline presented to the arbitrator. Given the dynamic that the facts of the loss are not in dispute, the question becomes: Will we be asking for 100 percent recovery in arbitration or taking a more reasonable tone toward comparative negligence and perhaps seeking 75 percent?

Core issues & turning points

Why are the defined dynamics for facts of the loss important? It involves what one must prove to the arbitrator within the confines of the case presentation. If there is no dispute that both vehicles were backing up; that is one less element of the case you have to support. If there is a dispute as to the color of the light when the driver turned left; then this is clearly an element of the case you need to be ready to prove.

Fundamental arbitration advocacy says to work within the evidence, knowing what is clearly in dispute and what is not. This establishes the foundation of the core issues on which the arbitrator must rule and the key turning points on which he or she must decide. Core issues in arbitration are things like liability, damages or a noted discrepancy in a police report. Turning points are items such as the light was yellow or red when the driver turned left or the insured had already backed out of the parking space and was actually moving forward when hit by the other driver in the lot.

When writing contentions in an intercompany arbitration case, consider using the following questions as a template: What is the core issue for the arbitrator to rule on in this case? What is the key critical turning point on which the arbitrator must decide? This helps establish in the arbitrator's mind a rolling hypothesis about what the claim dispute entails and what the parties' intentions are likely to be towards proof.

Related: What do claimants really want? The answer might surprise you

Claims professionals who process a good deal of intercompany arbitration cases develop an innate ability to breakdown the adverse party's contentions. (Photo: Shutterstock)

Evidence matters

How does one leverage evidence to succeed in challenging the auto liability case? The decision to pursue recovery may have been made if the adverse party initiates an arbitration filing. Assuming there are damages to recover; it would be wise to answer that case and file as counter applicant. If your team is going second, read the adverse party's contentions and look for unsupported assertions while scrutinizing their declared evidence list.

Intercompany arbitration works on a preponderance of evidence standard, so it is important to convey a more than likely scenario for the fact pattern present to the arbiter while meeting the prima facie burden in order to succeed. Filing the counterclaim provides a window into the adverse party's world. Claims professionals who process a good deal of intercompany arbitration cases develop an innate ability to breakdown the adverse party's contentions; look for what is said and not said, and tabulate what is missing from the adverse party's narrative and evidence. They then use their instinctive skill set to transition the arbitrator away from the opposing party's portrayal and toward their own via their contentions.

Parties may not pursue subrogation or arbitration because they believe the fact pattern and evidence are insufficient to induce a settlement or be successful in arbitration. The problem with that logic is not knowing what evidence (or lack thereof) the adverse party has.

Good faith effort to settle

Under the Rules of Arbitration, a good faith effort must be made to attempt to settle a claim before filing subrogation arbitration (Condition Precedent), so some form of a demand is forthcoming. The question is do parties fully exchange all available proofs in that effort to settle or are some held back and put forth once the case goes before an arbitrator? One may be able to prevail in intercompany arbitration even with a tough or marginal case based on the preponderance standard and the weight of the evidence in your favor since the arbiter evaluates both parties' proofs. Keep in mind the explanation for the way the accident occurred does have to be the only explanation for what happened, it simply has to be the more logical of any offered.

Lastly, how you construct the challenging liability case can also have an impact on whether the intercompany arbitrator accepts your theory. Develop a well thought out narrative that incorporates demonstrative exhibits; things like scene photos and diagrams (to show what occurred), compliment that with direct evidence (that maintains the theme) of what parties actually said at the scene or when giving a statement.

Mix in documentary supports like police reports or adjusters' notes to validate the theory. Consider adding in some circumstantial evidence (like skid marks or the adverse driver's actions at the scene that may infer fault), since arbitrators frequently draw inferences in their decision-making.

Recovering a company's dollars on a tough auto liability case need not be so arduous if one establishes the defined dynamics; appreciates the preponderance standard inherent in arbitration, and strategically leverages evidence to construct a narrative that is persuasive and impactful.

Kevin Pike ([email protected]) is with arbitration client services at Claims Resource Services, one of the nation's top five firms filing intercompany arbitration cases. His background encompasses 30 years in arbitration and the dispute resolution field, and he writes a weekly blog on intercompany arbitration disseminated throughout the insurance industry.