Mandatory arbitration provisions are riding a wave of popularity of late. Encouraged by recent favorable decisions handed down by five current Justices who are at present a majority of the U.S. Supreme Court, corporations are increasingly encouraged to insert mandatory arbitration provisions in all their contracts. See, e.g., "'Thrown Out of Court' in Insurance Coverage Disputes Too?" on Insurance Claims and Issues Blog on August 25, 2014.
Will insurance companies insist on mandatory arbitration of bad faith claims under such provisions?
Actually, the idea that these provisions require "mandatory arbitration" is correct as far as it goes, but that does not fully describe them. Here is a representative provision taken from a filing in a Federal Court case: Download Weller-case-dkt-53.4-d-colo-2013-arbitration-etc.-agreement. The provision necessarily involves more than mandatory arbitration. The provision is also a waiver of jury trial.
It may only be a matter of time before the extent and validity of such mandatory insurance contract provisions are ruled on by Courts in bad faith cases.
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