- What's the Difference?
- Can the Arbitrator Change My Valuation Coverage?
- What if a Moving Company Doesn't Have Arbitration?
- Arbitration is Better for Everyone
- ALL Companies Are Required By USDOT Law to Have Arbitration
1. What's the Difference?Most shippers choose moving arbitration versus small claims court simply because filing paperwork for a court case can be difficult to understand, quite lengthy and expensive. Arbitration is the cheaper and faster alternative to going to small claims court, as an arbitrator is a median that settles disputes outside of the court system. A shipper must first allow the carrier the opportunity to settle their claim using their existing claims procedures, regardless of whether they would like to file for arbitration or for small claims court.
Once a carrier makes a settlement offer or denies the shipper’s claim, only then does the shipper have the option of filing for arbitration or small claims court. One of the major reasons that the arbitration program requirement became a law was because it helps prevent courtrooms from becoming backlogged with cases that can be settled through arbitration without occupying a courtroom. Furthermore, a judge could deny a court case if the shipper does not follow through with the company’s arbitration option.
2. Can the Arbitrator Change My Valuation Coverage?
One thing to keep in mind is that neither the arbitrator nor a judge can change the valuation coverage option that was selected by the shipper at the pickup location. Meaning that if the shipper elects for the free, sixty cents per pound per article coverage, that is the coverage that must apply to the claim, regardless of the situation. The same can be said for the full value protection and any applicable deductibles.
3. What If A Moving Company doesn't have Arbitration?
If a moving company fails to establish and maintain an active membership with an arbitration program, they may be subject to violations from the Department of Transportation which may also be accompanied by fines that are often times very costly. Moving Authority can help you be compliant with this legal requirement. The Moving Authority Household Goods Arbitration Program is a fair and easy process for carriers and their valued customers. With more than 75 lawyers and ex-judges who hold the legal authority to arbitrate on our panel, you will be compliant with all arbitration requirement regulations.
Moving Arbitration Vs. Small Claims Court
4. Arbitration Is Better for Everyone
There are many factors that come into play when a moving company and a client decide to do business together. Unfortunately, despite everyone’s best efforts to be professional and conduct great business, there are always hiccups along the way. Often times these problems lead to legal issues between the moving company and their clients, and there are many ways to go about handling such problems. The most common question is weighing Moving Arbitration Vs. Small Claims Court.
Moving Arbitration is always the best first step when dealing with a dispute instead of going directly to small claims court. Going to small claims court is a lengthy process that can also cost an arm and a leg for both parties. Court also involves stacks of legal paperwork that can be confusing and if filled out incorrectly it can slow the process down even further. Since the Department of Transportation (DOT) has taken note of how many cases sent to small claims court slow down the court system and how frequently they take place the DOT now requires all moving companies to have a moving arbitration program in place to legally operate their business. Because of this legal requirement if a client or a moving company tries to bypass their arbitration system and go directly to small claims court it may be thrown out by a judge before it is even heard. This is because small claims court should be the last step, only if the problem could really not be resolved by Arbitration. Remember that even though the moving company has purchased arbitration services, this is a neutral third party that is going to take a fair, legal and honest stance based on the facts at hand and helps each party come to an agreement.
It is important to note that neither an arbitrator nor a judge can change the valuation coverage that was previously agreed upon in the shipper/client contract. Going to court and bypassing the Arbitration will have no effect on this as it is legally binding.
5. ALL Companies Are Required By USDOT Law to Have Arbitration
Because all companies are required by law to have a moving arbitration program in place, and have that arbitration certificate displayed in a public place and renewed every year, operating your business without one is risky and could result in your company getting fined or even shut down if a client attempts to take you to court because you don’t have an arbitrator. The same goes for the customer; if you find a company operating without this, steer clear of them because it's most likely that isn’t the only place they have cut corners on in their business.
All moving companies that transport shipments across state lines are required by the department of transportation to maintain an active membership with a company that provides an arbitration program. Federal regulation code 49 CFR 375.211 provides a list of a minimum of 11 requirements that an arbitration program must meet:
(1) The arbitration program must be provided in an unbiased manner. This means that neither party can have any special advantages over the other.
(2) Each shipper must be provided with information about the arbitration program that the carrier participates in before the carrier executes the order for service.
(3) If requested, the shipper must be provided all of the forms and or information necessary to initiate the arbitration process.
(4) The arbitration program must be able to ensure that each person authorized to arbitrate is unbiased toward both parties. The arbitrator must be able to obtain all information that is relevant to the dispute so that he or she may provide a prompt and fair decision making process.
(5) The arbitration program cannot charge the shipper more than half of the total arbitration cost. The arbitrator does however have the authority to determine the party that will be responsible for paying the arbitration costs. This includes any cost for initiating the arbitration proceedings.
(6) Neither the carrier nor the arbitration provider can require to participate in arbitration before a dispute arises. Meaning that you may not revoke the shipper’s right to file a claim using the carrier’s claims procedures.
(7) Any dispute submitted for arbitration must be binding if the claim is for $10,000.00 or less.
(8) If the shipper requests binding arbitration for claims exceeding $10,000.00 and the carrier agrees to it, then binding arbitration must be provided.
(9) An oral representation of a dispute can only be provided if both parties agree.
(10) An arbitration determination must be provided within 60 days from the date that the written notification of the dispute was provided. The decision made by the arbitrator can include any remedies appropriate given the circumstances of that individual dispute.
(11) Should either party fail to provide, in a timely manner, any information that the arbitrator determines to be reasonable, the arbitrator at his or her discretion may extend the 60-day period requirement for a reasonable period of time.