An arbitration service organization is claiming that arbitrationcan save the property/casualty insurance industry more than $700million in litigation costs annually through programs that resolveinsurance claims disputes outside of the courtroom

The CEO of Arbitration Forums, Inc. (AF), W. Russ Smith, toldthe National Association of Subrogation Professionals at its annualconference last week that the Tampa-based AF resolves more than475,000 inter-insurance company disputes annually, with a claimvalue of over $2.3 billion.

Disputes leading to arbitration typically arise when insuranceor self-insured companies believe their insureds are not at faultor due to disagreements over the percentage of liability or theamount of damages, Smith explained. Over 80 percent ofinter-company arbitration disputes involve auto collisions.

Smith urged more claims and subrogation professionals to becomearbitrators, noting that a minimum of three years of claimsexperience is required before one is qualified to take thecertification exam administered by AF.

Calling volunteer arbitrators “the backbone of the entireinter-company arbitration process,” Smith said the organization wascommitted to enhancing the quality of arbitration decisions.

He further observed that arbitrators must abide by highstandards of conduct to guarantee integrity and fairness, arequalified to hear appropriate cases and derive their authority fromthe respective arbitration agreement. “Objectivity and neutralityare the foundations of a credible arbitration system,” saidSmith.

Looking ahead, Smith said “AF will continue to embrace newtechnology, utilize a single platform to work toward a paperlessoperating environment, and seek non-traditional avenues to providebest- in- class service to its members.”

One of the new applications of cutting edge technology is theE-Subro Hub, which provides members with a single web-basedplatform to interactively issue and respond to subrogation demands,share and manage documents electronically, as well as file andrespond to arbitration cases.

As an electronic clearinghouse, the E-Subro Hub speeds up thesubrogation process and reduce costs to insurers, self-insureds,Third Party Administrators and claims service organizations, Smithsaid.