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JUSTICE BRESLIN delivered the opinion of the court:

The issue before the court is whether an insurance policy's underinsured motorist arbitrationprovision is contrary to public policy if it permits a trial de novo only for awards in excess of theminimum liability set forth in the Illinois Safety and Family Financial Responsibility Law (625 ILCS5/7-100 et seq. (West 1998)). The trial court concluded that such a structure is contrary to publicpolicy and entered a judgment confirming an arbitration panel's award in favor of the insured, DennisParker. Defendant American Family Insurance Company (American Family) appealed and weaffirmed. American Family filed a petition for leave to appeal to the supreme court. The supremecourt denied the petition but entered a supervisory order directing us to vacate our judgment andreconsider this case in light of Reed v. Farmers Insurance Group, 188 Ill. 2d 168, 720 N.E.2d 1052(1999). Having done so, we again affirm and hold that the insurance policy provision at issue hereviolates public policy, as expressed in Fireman's Fund Insurance Cos. v. Bugailiskis, 278 Ill. App.3d 19, 662 N.E.2d 555 (1996).

Parker was injured in a motor vehicle accident while he was a passenger in a car. The vehiclethat struck the one in which Parker was riding had liability insurance limits in the amount of$20,000. Parker filed suit against the driver of that vehicle and settled the case for the $20,000 policylimit. He then filed for arbitration with his own insurance company, American Family, as permittedby the arbitration provisions for underinsured motorist coverage in his American Family policy. Thepertinent provisions of the policy provided as follows:

"Arbitration

We or an insured person may demand arbitration if we do not agree:

1. That the person is legally entitled to recover damages from the owner or operator of an underinsured motor vehicle.

2. On the amount of payment under this part.

Any arbitration award not exceeding the minimum limit of the Illinois SafetyResponsibility Law:

1. Will be binding; and

2. May be entered as a judgment in any court having jurisdiction.

If any arbitration award exceeds the minimum limits of the Illinois SafetyResponsibility Law, either party has a right to trial on all issues in any courthaving jurisdiction."

An arbitration panel awarded Parker $75,000 minus the $20,000 received in the settlement. Parker filed a petition for judgment on the award in the circuit court. But, American Family movedto dismiss the petition and filed a counterclaim for a trial on all issues. Relying on Fireman's FundInsurance Cos. v. Bugailiskis, 278 Ill. App. 3d 19, 662 N.E.2d 555 (1996), the trial court found thatthe arbitration clause was one of adhesion which violated public policy. The court subsequentlydenied American Family's petition and entered a judgment on Parker's petition. We affirmed andnow reanalyze this case in light of Reed v. Farmers Insurance Group, 188 Ill. 2d 168, 720 N.E.2d1052 (1999).

ANALYSIS

The arbitration clause in dispute is common to insurance policies. A majority of courts havedetermined that these "escape hatch" clauses are unenforceable because they are contrary to publicpolicy. See O'Neill v. Berkshire Mutual Insurance Co., 786 F. Supp. 397 (D. Vt. 1992); Field v.Liberty Mutual Insurance Co., 769 F. Supp. 1135 (D. Haw. 1991); Mendes v. Automobile InsuranceCo., 212 Conn. 652, 563 A.2d 695 (1989); Worldwide Insurance Group v. Klopp, 603 A.2d 788(Del. 1992); Schmidt v. Midwest Family Mutual Insurance Co., 426 N.W.2d 870 (Minn. 1988);Hanover Insurance Co. v. Losquadro, 157 Misc.2d 1014, 600 N.Y.S.2d 419 (1993); NationwideMutual Insurance Co. v. Marsh, 15 Ohio St. 3d 107, 110, 472 N.E.2d 1061, 1063 (1984) (Sweeney,J., concurring); Pepin v. American Universal Insurance Co., 540 A.2d 21 (R.I. 1988).

In finding that the escape hatch clauses are contrary to public policy, the courts generallyfollow two lines of reasoning. In the first line, the courts invalidate the clauses because they conflictwith state policies regarding arbitration. Several courts have determined that the clauses frustratethe state's requirement of binding arbitration. E.g., Pepin, 540 A.2d at 22-23. In the second line,courts void the clauses on the basis that they unfairly favor the insurer. E.g., Bugailiskis, 278 Ill.App. 3d at 24, 662 N.E.2d at 558. Since our state encourages arbitration, whether it be binding ornonbinding (see Mayflower Insurance Co. v. Mahan, 180 Ill. App. 3d 213, 535 N.E.2d 924 (1988)),the policy considerations in the first line of reasoning are not relevant. We need address solelywhether the clause is void because it unfairly favors the insurer. American Family asserts that theclause is proper and not against public policy because it promotes arbitration and does notunreasonably favor itself over the insured.

Comments from courts in our sister states have described the clause as creating a "manifestinequit[y]." Mendes, 212 Conn. at 660, 563 A.2d at 698. Although facially equal, such escape hatchclauses are not truly equal in their effect on the parties. Marsh, 15 Ohio St. 3d at 110, 472 N.E.2dat 1063 (Sweeney, J., concurring). This is true because both parties are bound by a low award, whenan insurance company is unlikely to appeal, and not bound when there is a high award, when aninsurance company is more likely to appeal. Klopp, 603 A.2d at 791; Schmidt, 426 N.W.2d at 873-75. Thus, the benefits of the clause truly only favor the insurer (Klopp, 603 A.2d at 791; Schmidt,426 N.W.2d at 873-75), which can use the clause to escape the unwary claimant. Mendes, 212 Conn.at 659-60, 563 A.2d at 698. Policies with such clauses have been found to possess "earmarks of anadhesive contract." Schmidt, 426 N.W.2d at 874. They are said to lack mutuality of remedy and tobe the result of unequal bargaining positions in which the purchaser has little opportunity for arm's-length negotiation. Schmidt, 426 N.W.2d at 874; see also Losquadro, 157 Misc. 2d at 1019, 600N.Y.S.2d at 423 ("[T]he appearance of mutuality is an illusion").

Courts in Florida and New Jersey reject these descriptions. They note that the insured alsohas a right to reject an award over the statutorily prescribed level and demand a jury trial. Roe v.Amica Mutual Insurance Co., 533 So. 2d 279 (Fla. 1988); Cohen v. Allstate Insurance Co., 231 N.J.Super. 97, 555 A.2d 21 (1989)). Thus, they see no unconscionable result.

Recently, in Bugailiskis, the second district of this appellate court interpreted a clause similarto the one at issue here which also involved underinsured motorist coverage. After an analysis ofthe cases from various jurisdictions, the court concluded that the clause was simply an "escapehatch" for the insurance company and because of its unequal application, cost, delay and the fact thatthe contract possessed many "earmarks of a contract of adhesion," it violated public policy and wasunenforceable. Bugailiskis, 278 Ill. App. 3d at 23, 662 N.E.2d at 558. Accordingly, because of theoppressive nature of the agreement, the insurer had no right to a trial and the court held that thearbitration provision was enforceable except to the extent that it provided for a trial de novo.Bugailiskis, 278 Ill. App. 3d at 24, 662 N.E.2d at 558.

More recently, our supreme court addressed a similar clause concerning uninsured motoristcoverage in Reed v. Farmers Insurance Group, 188 Ill. 2d 168, 720 N.E.2d 1052 (1999). In Reed,the court held that the clause did not violate public policy because the requirement of such a clausewas codified with respect to uninsured motorist coverage in the Illinois Insurance Code (InsuranceCode)(215 ILCS 5/1 et seq. (West 1998)). Section 143(a) of the Insurance Code provides that anydecision made by arbitrators in an uninsured motorist case "shall be binding for the amount ofdamages not exceeding the limits for bodily injury or death set forth in Section 7-203 of the IllinoisVehicle Code." 215 ILCS 5/143a (West 1998). In other words, when arbitrators issue awards of lessthan $20,000, those awards are binding upon the parties. Given that the legislature had declared thepublic policy of the state with regard to uninsured motorist coverage, the Reed court reasoned that"'the judicial department must remain silent, and if a modification or change in such policy is desiredthe law-making department must be applied to, and not the judiciary, whose function is to declarethe law but not to make it.'" Reed, 188 Ill. 2d at 175, 720 N.E.2d at 1057, quoting Collins v.Metropolitan Life Insurance Co., 232 Ill. 37, 44, 83 N.E. 542 (1907).

Unlike Reed, there is no such provision in the Insurance Code pertaining to underinsuredmotorist coverage. In fact, the court in Reed distinguished Bugailiskis on this basis alone, pointingout that the statute concerning underinsured motorist coverage at issue in Bugailiskis "does notrequire a similar arbitration provision." Reed, 188 Ill. 2d at 174, 720 N.E.2d at 1057. The courtfound that "this distinction [was] dispositive of [the] issue." Reed, 188 Ill. 2d at 174, 720 N.E.2dat 1057. Given that the legislature has not given us any guidance concerning underinsured motoristcoverage, we must rely on the decisions of our courts. See People ex rel. Nelson v. Wiersema StateBank, 361 Ill. 75, 197 N.E. 537 (1935)(when a state's constitution and statutes are silent upon asubject, the public policy of the state concerning that subject is embodied in the decisions of itscourts); see also City of Champaign v. Department of Revenue, 89 Ill. App. 3d 1066, 412 N.E.2d211 (1980)(same). Thus, we agree with Bugailiskis and hold that the trial de novo clause isunconscionable and contrary to public policy. We further note that the supreme court has notaddressed the issue presented by this case and decided by the appellate court in Bugailiskis. Nor hasthe legislature altered the insurance code in response to the Bugailiskis decision.

What remains to be determined is whether the entire arbitration scheme of the policy shouldbe voided, or whether only the escape hatch provision should be stricken.

American Family contends that the proper remedy is to strike the entire arbitration sectionfrom the contract and remand the case to the circuit court for trial. The parties, however, entered intoan arbitration agreement when they were not statutorily required to do so. See 215 ILCS 5/143a-2(West 1998). Therefore, in order to preserve the parties' agreement to the greatest extent possibleand because arbitration is an encouraged form of dispute resolution in Illinois, we hold that only thetrial de novo clause is unenforceable and that the trial court properly entered a judgment confirmingthe arbitration panel's decision. See Bugailiskis, 278 Ill. App. 3d at 24, 662 N.E.2d at 558; Klopp,603 A.2d at 791-92; Schmidt, 426 N.W.2d at 875.

For the foregoing reasons, the judgment of the circuit court of DuPage County is affirmed.

Affirmed.

SLATER, P.J., concurs. HOLDRIDGE, J., dissents.

JUSTICE HOLDRIDGE, dissenting:

I respectfully dissent. In order for the majority to find

that the trial de novo provision is unconscionable, and thus

unenforceable, it has engaged in the unsupported assumption that

only the insurance company would seek to avoid an arbitration awardof more than $20,000. Such an assumption is nothing more than purespeculation. I see no empirical evidence to support the majority'sbald assertion that "as a matter of common sense, the party who islikely to be dissatisfied with an amount over $20,000 is theinsurer, not the insured."

Unlike appeals based upon the law, appeals to common sense

often depend upon who is the appellant. Indeed, as long as we areengaging in pure speculation and appeals to common sense to supportour holdings, I could speculate that a plaintiff expecting a$100,000 award from an arbitrator would invoke the de novoprovision to avoid an arbitration award of $21,000, much to thechagrin of the insurance company that would have been happy to paythe arbitrator's award.

I admit that from among our sister states that have ruled on

this identical issue, only the Florida Supreme Court (Roe v.American Mutual Insurance Co., 533 So.2d 279 (Fla. 1988)),the NewJersey Appellate Court (Cohen v. Allstate Insurance Co., 231 N.J.Super. 97, 555 A.2d 21 (1989)), and the Arizona Appellate Court(Liberty Mutual Insurance Co. v. Mandile, 259 Ariz. Adv. Rep. 71(December 30, 1997)) have rejected the temptation to speculate thatan insured would never reject an arbitral award above the statutoryfinancial responsibility limit. However, I find their analysismore persuasive.

I agree with the reasoning of the Arizona court in Mandile

that:

"When a plaintiff who thinks his case is worth

$300,000 gets only $50,000 from the arbitrators,

that plaintiff will want the option of appeal (and

may use that option as a leverage point in

settlement discussions). Conversely, an insurance

company that thinks a case is defensible, and is

ordered to pay $14,999, may wish it could appeal

but will lack the right to do so. The de novo

appeal right, overall, is probably as important to

plaintiffs as to defendants." Mandile, 259 Ariz.

Adv. Rep., slip op. at 6.

Similarly, in rejecting the same unsupported speculation

adopted by the majority in this matter, the Cohen court noted that:

"A variety of situations can be hypothesized

in which an insured would welcome the opportunity

to reject an arbitration award and demand a trial.

* * * In short, while we might speculate that the

policy provision is unfairly tilted in favor of

Allstate, that would be nothing more than

guesswork. We cannot properly base a determination

of unconscionability on unsubstantiated impressions

and personal intuition. Evaluation and adjustment

of the competing public and private interests are

best left to the legislative and administrative

process." Cohen, 231 N.J. Super. at 102, 555 A.2d

at 24.