Neutral Evaluation of Sinkhole Claims by Michael Laurato

The Florida legislature has included an alternative dispute resolution process in the Florida's sinkhole law to assist policyholders and insurers resolve disputed sinkhole claims.  This process is simply known as "Neutral Evaluation."  Alternative dispute resolution is a term of legal art that refers to a settlement process, the goal of which is to amicably resolve a legal claim by mutual agreement of the parties, as opposed to actual litigation of the claim in court.  Mediation, either pre-suit or court-ordered, is a common form of alternative dispute resolution used thorughout Florida to resolve disputes without litigation.  Arbitration, both binding and non-binding, represent another common form of alternative dispute resolution utilized to avoid litigation.  In insurance matters, another common form of alternative dispute resolution is often built-in to the policy itself in the form an "appraisal" provision. 

Much like other forms of alternative dispute resolution, Neutral Evaluation has as its stated goal the desire to assist in the resolution of disputed sinkhole claims and to avoid burdening the courts with a lawsuit that may be amenable to early resolution.  Pursuant to the sinkhole statute, neutral evaluation is mandatory, if requested by either party, but it is non-binding.  Once invoked by either the policyholder or insurer, the statute requires, among other things, the parties to participate in the neutral evaluation process.  In a nutshell, neutral evaluation envisions that a "neutral" qualified expert will review all the scientific data in the case and determine whether the policyholder's or the insurer's expert is correct.  The evaluator's opinion on which expert is correct is then published in a report and provided to the parties.  Again, the neutral evaluator's opinion is non-binding, but, under the statute, the neutral evaluator's report is admissible in evidence at any subsequent trial. 

The fact that the neutral evaluator actually makes a decision on which party's findings on sinkhole or repair methodology is correct makes the statutory process more akin to non-binding arbitration or appraisal.   In both of those alternative dispute resolution processes, an arbitrer in arbitration or an umpire in appraisal, actually make a final decision in the case.  In mediation, on the otherhand,  the mediator does not actually decide which party is correct on the merits.  For this reason, neutral evaluation is a process that should be taken seriously, because the neutral evaluator will make a decision on the merits that under the statute the jury will be informed about. 

Sinkhole claims present special challenges, because of the complexity of the science and geology involved.  On the legal end, litigation of sinkhole claims often is an equally complex mixture of science and law. The neutral evaluation process adds an additional layer of complexity and for that reason, the importance of the process should not be overlooked.  Neutral evaluation first provides an opportunity to resolve a disputed claim and avoid the risk of total loss often assocaited with a trial.  Any policyholder should relish the opportunity to amicably settle a disputed claim.  After all, litigation against any large insurance company that has denied a claim is fraught with stress and risk.  Next, an intelligent and prepared approach to neutral evaluation may result in the neutral evaluator actually finding in the homeowner's favor and against the insurer, resulting in another opportunity to convince the insurance company to abide by the policy coverage and pay the claim. 

For further information about Florida's neutral evaluation process, please visit the Florida Department of Financial Services at http://www.myfloridacfo.com/Consumers/mediation/SettlingSinkholeClaim.htm.  The site contains a consumer pamphlet discussing the neutral evaluation process.  Of course, if any policyholder has any questions about the neutral evaluation process, it is recommended to consult with an attorney experienced in handling sinkhole claims and the neutral evaluation process. 

Michael V. Laurato, Esq.
Austin & Laurato, P.A.

Florida Sinkhole Law: Plant City Woman Reportedly Falls In Sinkhole by M...

Florida Sinkhole Law: Plant City Woman Reportedly Falls In Sinkhole by M...: "Both local and National media have recently reported that a Plant City woman exited her home and fell into a sinkhole. According to th..."