Mundy will conduct the review of the system for choosing neutral arbitrators, who are used extensively in insurance cases stemming from accidents involving uninsured or underinsured drivers. Many insurance policies require arbitration rather than a jury trial in such disputes.
In such cases, each side typically picks its own arbitrator. If they cannot agree on a third, neutral arbitrator, either side may ask the court to appoint one.
Articles published this week in the Legal Intelligencer, a Philadelphia-based legal journal, and The Citizens’ Voice, examined concerns about the fairness of the system for choosing such arbitrators in Luzerne County.
The Legal Intelligencer reported “rampant” rumors of “case-fixing.”
Numerous attorneys have reported hearing that the federal corruption probe that led to charges against two county judges and the county court administrator has now turned toward examining arbitrations in uninsured/underinsured motorist cases.
The article yesterday alluded to Luzerne County being one of the the highest places in the state for such awards:
Insurance Federation President and CEO Samuel R. Marshall denied claims by one attorney in the Legal Intelligencer article that his group wanted the regulation overturned because of large arbitration awards in Luzerne County.
“That case was not specific to any one county or part of the Commonwealth. It was dealing generally with the problem with arbitrations,” Marshall said.
He said arbitration was seen as a favorable option for insurance companies decades ago.
“It was meant to be an efficient, fair and balanced and predictable means of resolving claims. It worked out in many ways to be inefficient. It worked out that it wasn’t predictable. It worked out that throughout the Commonwealth it was producing claims that were out of line with claims that were going through the judicial system.”
Marshall acknowledged that Luzerne County does have a reputation — backed up by industry studies — as a place where plaintiffs win larger court awards than in other counties, particularly in medical malpractice cases.
“You do see claims patterns and claim awards patterns that have always had Philadelphia and Luzerne County at the high end as opposed to Allegheny County or other parts of the state.