Arbitration Creativity to Resolve a Lawsuit
The injured party had had a significant injury. The defendant a product manufacturer was concerned about the possibility of a large verdict and the impact on the product which the manufacturer believed to be safe. Although the product manufacturer had good defense to the claim, the prospect of a large or run-away verdict exceeding available insurance could have put the company out of business. The parties agreed to a high-low arbitration where the arbitrator only decided the winner or loser but not the amount. The parties negotiated a low end settlement figure if the arbitrator decided no liability and an up end figure that would be paid if the arbitrator decided that there was liability. Arbitration was used to reach settlement within parameters designed by the parties with their counsel.
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