Academic journal article Journal of Risk and Insurance

Alaska Supreme Court Affirms Broad Power and Discretion of Arbitrators in UIM Claim

Academic journal article Journal of Risk and Insurance

Alaska Supreme Court Affirms Broad Power and Discretion of Arbitrators in UIM Claim

Article excerpt

ALASKA SUPREME COURT AFFIRMS BROAD POWER AND DISCRETION OF ARBITRATORS IN UIM CLAIM

Wing v. GEICO Insurance Co., 17 P.3d 783 (Alaska 2001)

Ursula Wing's car was hit in the rear by another driver's car in August 1994 and incurred economic loss, medical damages, and noneconomic loss. GEICO, her insurer, made preliminary payments of more than $13,000 ($7,527.36 for medical expenses; $6,000 for economic loss). In 1997, GEICO offered $21,000 to settle the remainder of her claim. Wing rejected the offer and "instead filed an uninsured motorist (UIM) arbitration claim seeking a greater award." GEICO in 1998 then made "what it called an 'offer of judgment' of $33,557 to resolve the arbitration. Wing rejected the settlement offer, in part because GEICO sought to reserve a right to set off benefits previously paid to Wing. See 17 P.3d at 785-86.

The arbitration proceeded and the panel made a preliminary award of $33,078.00 but did not award costs or counsel fees because it found that the governing policy provided that each side would bear its own counsel fees and that this contract provision did not violate public policy. Alaska Rule of Civil Procedure 82 is something of an "English rule" that ordinarily provides that the losing party must pay the prevailing side's reasonable counsel fees. The arbitration panel then reduced the award to $14,987.70, presumably by allowing GEICO a setoff for benefits previously paid (the arbitration award was silent on this point) as well as deducting allowable expert witness fees. The three-member arbitration panel then required Wing to pay in full for the arbitrator she selected (pursuant to the state arbitration act) and for one-half the cost of the neutral arbitrator selected by the two party-appointed arbitrators. …

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