Can You Reverse an Uninsured Motorist Arbitration Award?

Woodland Hills personal injury lawyer Barry P. Goldberg is an expert on all things Uninsured and Underinsured, including UM/UIM Arbitrations. While UM/UIM arbitrations provide a relatively inexpensive and prompt result, many drivers are concerned that the opportunities for appeal are limited—–That is a fact!

Background of the Uninsured Motorist Law

A little background is required. The Uninsured Motorist Law was enacted, at least in part, to provide a prompt and inexpensive way to resolve claims between an insured and his or her own insurance company. To resort to contentious courtroom litigation seemed inconsistent with essentially friendly parties subject to a contract of insurance. The tradeoff was that the arbitration awards are “binding” except in extraordinary circumstances. The courts have interpreted “binding” to mean that there is no right to a traditional appeal.

The Court Cannot Review the Merits of the Award

Accordingly, when parties to the insurance contract agree to waive the right to appeal the decision of an arbitrator, the grounds for judicial review of an arbitration award are extremely limited. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 26–28.) An appellate court cannot review the merits of the controversy, the arbitrator’s reasoning, or the sufficiency of the evidence supporting the award. (Id. at pp. 11–13.) Even “an error of law apparent on the face of the award that causes substantial injustice does not provide grounds for judicial review.” (Id. at p. 33.) A trial court may vacate an arbitration award only as expressly authorized in section 1286.2.

Grounds to Vacate an Award

California Code of Civil Procedure §1286.2(a) allows a trial court to vacate an arbitration award if it determines:

1. the rights of a party were substantially prejudiced by misconduct of a neutral arbitrator (§ 1286.2(a)(3));
2. the arbitrator exceeded his or her powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted (§ 1286.2(4)); or,
3. the rights of a party were substantially prejudiced by the refusal of the arbitrator to postpone the hearing upon sufficient cause being shown or by the refusal of the arbitrator to hear evidence material to the controversy (§ 1286.2(a)(5)).

Because the actual UM/UIM arbitration is so final and difficult to overturn, it is imperative that the parties adequately prepare for the arbitration and take the proceeding as seriously as possible. A seasoned trial attorney with experience handling Uninsured and Underinsured Motorist Arbitrations is essential.