I have been practicing medical malpractice defense in California for about seven years. If I understand your question correctly, one of the named plaintiffs in such a case has decided that she no longer wants to pursue her claim. She may find some basic information on dismissal helpful.
In California, parties to civil lawsuits - including medical malpractice cases - can dismiss all or part of the case, or a party, etc., with or without prejudice, by signing, filing and serving a Request for Dismissal form. The Judicial Counsel has provided a free form for this purpose, and it can be obtained in various formats at the Judicial Counsel forms web site: http://www.courtinfo.ca.gov/forms/. There is even a fillable pdf form available at http://www.courtinfo.ca.gov/forms/fillable/civ110.pdf.
It is important to note that filing a dismissal without first obtaining an agreement that each party will bear his or her own costs might make the defendant a "prevailing party" for cost shifting purposes and subject a dismissing plaintiff to an award of costs. This is particularly true if a statutory offer to compromise has been made.
As a practical matter, the defendant will often agree to waive costs in exchange for a dismissal with prejudice (which means that the dismissing party could not re-file the lawsuit even if the statute of limitations has not run). The attorney who is handling the arbitration for the Plaintiffs would probably be willing to help fill out the Request For Dismissal form, and if not, the defense attorney may be willing to do so.
I am not entirely sure that I have completely answered your question because it is not clear to me whether the matter involves a judicial arbitration following the filing of a civil lawsuit (in which case the dismissal would still be the appropriate way to dismiss the claim), or some other sort of arbitration that may have its own procedural requirements for dismissal. In the such instances, the procedural rules governing the specific arbitration must be consulted.
Caveat: I am only licensed to practice law in California. This answer is intended as legal information rather than legal advice, and it should not be relied on in any particular set of circumstances. Because each situation is fact specific, it is impossible to accurately evaluate a legal problem and suggest a course of action without a comprehensive consultation and review of all the facts and documents. The provision of this information does not create an attorney-client relationship.
If your question is that a choice to proceed with Arbitration was based on a misunderstanding of the length of time, and that a claimant wants to go to suit instead, (as opposed to the learned reponse above), I suggest you consult with a skilled Medical Malpractice lawyer to determine whether that is feasible. If however, your question was as consdered by my colleagues, I concur with the above advice. I practice in Illinois but consult with California Plaintiff's Attorneys on malpractice cases. Good Luck.