Lachenmeier, Enloe & Rall - February, 2004 Publication

Immediate Consent to Binding Arbitration Letters Required for all Injury Claims

A recent decision of the Oregon Court of Appeals in a UIM case underscores the need for immediate issuance of letters to insureds consenting to binding arbitration at the first knowledge that an insured has been injured in an auto accident—whether or not the insured appears to have injuries that would implicate UM or UIM coverages.

In the case of Hall v. Speer, decided July 20, 2011, the Oregon Court of Appeals held that a combination of the insured’s application for PIP benefits, the results of a PIP IME, and correspondence from the insured’s counsel that did not make a UIM claim on behalf of the insured, provided the UIM insurer with enough notice that the six month clock under ORS 742.061 had started running, long before a UIM claim was asserted. Click here to read the entire decision.

     When the insured then did, considerably later, expressly make a UIM claim, and the insurer sent its consent to binding arbitration letter two months later, that was held to not be timely for purposes of preventing an attorney fee claim (which currently, under ORS 742.061, is one-sided only and never provides for attorney fees to the insurer, even if the insurer prevails at trial).

     Unless the Oregon Supreme Court were to accept a Petition for Review of the Hall case, or the legislature were to change its effect, insurers would be well-advised at this time to develop a pattern letter, to be used in all injury claims (starting with PIP), advising the insured that coverage is accepted and that if a dispute as to liability of the adverse driver or the amount of benefits due under PIP, UM, or UIM coverages ever arises, the insurer consents to have such dispute resolved by way of binding arbitration. Doing so immediately should seriously reduce the risk of the one-way provisions of ORS 742.061 applying to make attorney fees owed.

     If you have any questions, please feel free to contact the author: Jay D. Enloe (jay@lerlaw.com) at 503-768-9600.