How Arbitration Works in Tempe Car Accident Disputes

Not every car accident in Tempe ends up in a courtroom. In fact, many claims are resolved through arbitration—a private legal process that can be quicker, less expensive, and less formal than a traditional trial. Still, for many crash victims, arbitration feels unfamiliar and intimidating.

If you're working with your insurer or an opposing party on a claim that doesn't seem to be moving, you may be told arbitration is the next step. But what does that really mean? And how does it affect your ability to recover compensation?

Whether you were hit in North Tempe, involved in a T-bone crash, or sideswiped in a parking lot, understanding how arbitration works can help you stay in control of the process. Our car accident lawyer content team breaks it down.

What Is Arbitration?

Arbitration is a method of resolving disputes outside of court. In the context of a car accident, arbitration typically involves:

• A neutral third party (the arbitrator)

• Each side presenting their arguments and evidence

• A legally binding decision (in most cases)

It’s more formal than mediation but less formal than a trial. You won’t be in front of a judge or jury, and you likely won’t be sitting in a courtroom. Arbitration may take place in an office setting or even via video conference.

Why Is Arbitration Used in Arizona Car Accident Cases?

There are a few common reasons arbitration may be used:

1. Contractual Clauses

Some auto insurance policies contain mandatory arbitration clauses, especially for uninsured motorist (UM) or underinsured motorist (UIM) claims. If you’re making a claim against your own policy and there’s a dispute, your policy may require arbitration rather than litigation.

2. Court Orders

In Arizona, if the amount in dispute is relatively low (typically under $50,000), the court may order compulsory arbitration under Rule 72 of the Arizona Rules of Civil Procedure. This is common in smaller injury claims.

3. Voluntary Agreements

Sometimes, both parties agree to arbitrate in order to avoid the cost and length of a trial.

Regardless of how it starts, arbitration is designed to resolve disagreements faster and more efficiently than going to court.

How Arbitration Differs from Mediation

Don’t confuse arbitration with mediation. In mediation, a neutral third party tries to help both sides reach an agreement—but the mediator does not make a decision. You control the outcome.

In arbitration, the arbitrator decides the outcome, and it’s typically binding. That means you usually can't appeal the result just because you don’t like it.

Learn more about the differences in our post on mediation vs. litigation.

What Happens During the Arbitration Process?

Here’s a basic breakdown of what you can expect:

1. Preliminary Setup
   Both parties agree on an arbitrator or one is assigned by the court or insurance company. You'll receive a notice of the arbitration hearing date.

2. Exchange of Evidence
   Each side will submit relevant documentation—such as accident reports, photos, medical records, repair bills, and witness statements.

3. The Hearing
   During the hearing, both sides present their version of events. There’s usually no formal witness stand or cross-examination, but each party may speak, provide evidence, and answer questions from the arbitrator.

4. The Decision
   After the hearing, the arbitrator reviews everything and issues a decision, usually within 10 to 30 days. If it’s binding arbitration, this decision is final.

When Is Arbitration Binding in Arizona?

Whether or not arbitration is binding depends on the agreement or the court order:

• If your insurance policy requires binding arbitration, then you can’t reject the outcome.

• If arbitration is court-ordered under Arizona Rule 72, you have the right to appeal and request a trial within a short window.

• If you and the other party voluntarily agreed to arbitration, you can define in advance whether the decision will be binding or non-binding.

In most cases involving insurance disputes, the decision is binding unless you take very specific steps to challenge it.

Pros and Cons of Arbitration After a Crash

Pros:

• Faster resolution compared to trials

• Lower legal costs

• Less formal setting

• May be required under your insurance policy

Cons:

• Limited right to appeal

• Less opportunity for discovery (you may not get to dig into the other side’s evidence)

• Potential bias if the arbitrator works frequently with insurers

This makes it especially important to prepare thoroughly and understand the stakes—especially if you’re facing long-term injuries like TBI or paralysis, where compensation needs to cover future care.

Do You Need Representation in Arbitration?

While arbitration is less formal than court, it's still a legal proceeding. You’ll be expected to present your claim clearly, provide evidence, and respond to arguments. The other side—especially if it's an insurance company—will likely have professionals working on their behalf.

Even if you’re not hiring an attorney, it’s worth reviewing materials on our legal resources page to understand how to present a strong case.

Final Thoughts

Arbitration can feel like uncharted territory if you’ve never been through it—but for many Tempe drivers, it’s a required part of the claims process. If you're dealing with an uncooperative insurer or trying to recover damages after a crash in Holdeman, understanding arbitration gives you an edge.

Know your policy. Know your rights. And be ready to present your case clearly, especially if you're representing yourself.