A New Jersey appeals court ruled Wednesday that, absent specific contractual language, in-person arbitration cannot be compelled.

So long as the process is fair, “we hold that the [New Jersey Arbitration Act] does not require an in-person hearing for every arbitration,” and arbitration hearings could be heard over the phone, wrote Appellate Division Judge Robert Gilson in State Farm Guaranty Insurance v. Hereford Insurance. He was joined by Judges Richard Hoffman and Jessica Mayer in the published decision.

The dispute is between Hereford Insurance Co. and Arbitration Forums Inc., and concerns the alternative dispute resolution provider's decision to forgo a live hearing in an underlying automobile case. The court didn't offer details about the accident, although the carriers involved are Hereford and State Farm Guaranty Insurance Co., and the dispute implicates an accident victim's personal injury protection benefits.

Hereford appealed a trial judge's March 2017 ruling that said Arbitration Forums was not required to hold an in-person arbitration hearing in the coverage dispute.

According to the ruling, State Farm had a contract with Arbitration Forums to settle PIP coverage disputes. Hereford was not a party to the contract, the ruling said. State Farm contracted with Arbitration Forums because it charged a fee of only $70, the court noted.

The trial judge noted that Hereford, given the chance, did not offer an alternative forum, or give a reason why Arbitration Forums should be disqualified. And, while the issue was pending, Arbitration Forums decided to abandon in-person hearings in favor of telephonic hearings.

Hereford contended that the Arbitration Act required in-person hearings. State Farm has taken no position on the appeal, according to the court.

The Arbitration Act, Gilson said, only requires that the arbitrator conduct a proceeding that is “appropriate for a fair and expeditious disposition.”

“An arbitrator is not required to conduct a hearing,” Gilson said, and ”in the absence of a contract requiring in-person hearings or a showing of specialized need, a party to an arbitration proceeding is not entitled to an in-person hearing.”

“Absent an express condition in the parties' contract, the type and manner of the hearing is left to the discretion of the arbitrator,” Gilson said.

An arbitrator also can conduct proceedings over a video link or over the internet, absent contractual terms to the contrary, Gilson added.

“Here, a telephonic hearing will afford the parties the opportunity to be heard, present evidence, cross-examine witnesses, and make arguments,” he said.

“Hereford has made no showing that the procedures provided by AF will not provide it an adequate right to be heard, to present evidence, or to cross-examine witnesses,” Gilson added. “A telephonic hearing will afford Hereford due process.”

Arbitration Forums' attorney, Leah Brndjar of the Princeton office of Goldberg Segalla, declined to comment.

Hereford's attorney, David Dickinson of Millburn's McDermott & McGee, did not return a call seeking comment.