frank@franksheplaw.com
Arbitrations
& Umpire Appointments
A similar form of dispute resolution, which is becoming increasingly common in the insurance industry, is “appraisal.” Many first party homeowners’ and commercial property owners’ property insurance policies issued today have a “right of appraisal” provision in the policy for the determination of “the amount of loss” when the parties cannot agree. In such cases, the insured and the insurance company each appoint an “appraiser” to determine the amount of the loss. If the appraisers cannot agree, an “umpire” is appointed by agreement of the parties or, if necessary, by a judge. The appraisal panel then reviews the record of the loss and sometimes hears expert presentations. The agreement of two of the three appraisers is necessary to resolve the dispute. The appraisers do not make “coverage” determinations during the course of their decision-making process, but the determination of “amount of loss” usually resolves the dispute between the insured and insurer.
Judge Shepherd has frequently served in both capacities. For example, he has served as the sole arbitrator by agreement in a multi-million dollar arbitration concerning land use, density, water access, and club charges relating to an island residential community. In Judge Shepherd's capacity as a member of the approved panel of neutrals for the American Arbitration Association (AAA), he has been appointed to serve as the sole arbitrator or as one of three arbitrators in AAA arbitrations where the amounts in controversy range from just a few thousand dollars to the millions of dollars. . Judge Shepherd is especially proud of the fact that, recognizing his decades of experience in the field of construction from every professional vantage point, lawyers for both claimants and insurance carriers often agree on him as either an arbitrator or umpire, attesting to the hard work and fairness with which he approaches all parties and claims.
Arbitration is a form of dispute resolution agreed upon by the parties that can be either binding or non-binding. The agreement to arbitrate usually appears in a contract executed by the parties at the beginning of a commercial relationship. However, an agreement to arbitrate a dispute can be agreed upon by the parties at any time. A major advantage to arbitration is that the parties maintain much more control over the process than they have in a court proceeding, including such things as who will be the “judge” or constitute “the panel,” discovery and the like. As a result, arbitration typically offers a more expeditious and less expensive resolution of the dispute. Most important to many litigants, the arbitration and its outcome can be kept confidential. During the last year, as the Courts have been closed to jury trials, many civil court judges have ordered non-binding arbitration of jury cases so that the parties can get an idea of how an impartial arbiter might see their case. In either type of arbitration, the proceeding can take the form of a full-blown evidentiary hearing, a mini-trial, or simply “on papers” submitted by the parties. The decision can be rendered in the form of what is sometimes called “a reasoned decision” (an opinion) or a simple one line “decision,” in accordance with the wishes of the parties.