Mandatory Arbitration Clauses Require Residents to Forfeit Their Rights

Deciding to place a loved one in a nursing home can be difficult. Adding to the difficulty is the fact that many nursing homes seek to take advantage of families in vulnerable situations by including arbitration clauses in nursing home contracts. These provisions require that the parties settle any disputes through binding arbitration.

Arbitration was originally used to resolve disputes between businesses, but in the 1980s its use expanded to cover consumer disputes, including cases of nursing home abuse or neglect. Nursing home executives found that arbitration was faster and less expensive than submitting a case to litigation.

By agreeing to arbitration (sometimes unwittingly), nursing home residents and their families forfeit their right to have a dispute in court and instead agree to have any disputes decided by a panel of three arbitrators, often without the right to appeal. This decision can become a problem if the family later learns that the nursing home or its staff was responsible for injuries to or the death of a nursing home resident.

What Is Arbitration and Why Do Nursing Homes Prefer It?

A mandatory arbitration clause in a nursing home contract requires that any dispute between the family of a nursing home resident and the nursing home be submitted to binding arbitration, with the results of the arbitration to remain confidential.

Some nursing home contracts may specify that claims against the nursing home be submitted to arbitration in a particular jurisdiction, which is not always a city or state that is convenient for the nursing home resident or their family. For example, a nursing home chain that has its corporate headquarters in Delaware might require that all disputes be submitted to arbitration in Delaware and decided according to Delaware law. While this is perfectly legal, unsuspecting families of prospective nursing home residents may not read the fine print in a nursing home agreement and may unwittingly sign a contract by which they waive some of their rights.

Nursing homes often prefer arbitration because it is less expensive than litigation, arbitrators generally return lower awards in cases of personal injury and wrongful death, and because the results of an arbitration often must remain confidential.

U.S. courts have traditionally upheld mandatory arbitration clauses as being enforceable, in part because they reduce the burden on the court system.

Changes to the Laws Regarding Arbitration Clauses in Nursing Home Agreements

Under the Obama administration, the Centers for Medicare and Medicaid Services (CMS) passed a rule that prohibited nursing homes that accept Medicare or Medicaid from requiring residents to sign a mandatory arbitration clause.

The Trump administration has reviewed the rule and now allows nursing homes to include arbitration clauses in nursing home contracts, but prohibits nursing homes from requiring that residents sign an arbitration clause as a condition of admission.

Problems with Arbitration Clauses in Nursing Home Contracts

Families seeking to admit a loved one to a nursing home are often under pressure to act quickly and may not thoroughly review a nursing home contract before signing. There is also a disparity in bargaining power between the family of a prospective nursing resident and a large nursing home corporation, and the resident’s family may feel powerless to negotiate the terms of the contract.

Nursing home executives claim that arbitration clauses improve efficiency, which benefits both the nursing home and its residents. However, an arbitration clause in a nursing home contract means that nursing home residents and their families give up a number of important rights and protections.

Nursing home executives claim that arbitration clauses improve efficiency, which benefits both the nursing home and its residents. However, an arbitration clause in a nursing home contract means that nursing home residents and their families give up a number of important rights and protections.

Significantly, by signing a nursing home admission agreement that includes a mandatory arbitration clause, nursing home residents and their families give up their right to a jury trial which is guaranteed by the Seventh Amendment to the Constitution.

While forfeiting the right to a jury trial may seem insignificant, it has repercussions that make it more difficult for victims of nursing home abuse or neglect to seek justice. The rules of evidence in arbitration are relaxed and may allow the nursing home to present evidence in the form of rumors and speculation that can be used to discredit the victim, which would ordinarily not be permitted in a jury trial.

Many arbitrators, while claiming to be neutral, are biased towards nursing homes because they want to arbitrate more cases for nursing homes. It is likely that nursing home executives will have multiple cases that go to arbitration, while for nursing residents and their families this is likely the only arbitration in which they will be involved.

Most arbitrations are confidential, which means that even if there is a result that is favorable to a nursing home resident, industry watchdog groups will be unable to identify trends that could point to a pattern of abuse.

Finally, most arbitration decisions cannot be appealed, which means that if a nursing home resident felt the process was unfair they have no recourse.

Robenalt Law – Holding Nursing Homes Accountable

If someone you care about was injured or killed due to the negligence of a nursing home, you should contact an experienced nursing home neglect attorney immediately. A lawyer can advise you about your rights, identify whether there is an arbitration clause in the contract you signed, and help you prepare for arbitration or litigation.

Not all arbitration clauses hold up under court scrutiny, but assessing whether an arbitration clause is enforceable is a technical and complicated process.

Ohio nursing home neglect lawyer Tom Robenalt has been seeking justice for victims of nursing home abuse and neglect for more than 25 years. He will investigate your case, and has the experience, resources, and expertise to hold negligent nursing homes accountable.

Contact Robenalt Law today to schedule a free consultation. Call us at 216-233-7573, email trobenalt@robenaltlaw.com, or complete our online form.

Tom Robenalt started his litigation career representing nursing homes at a large firm in Cleveland. For the past 25 years, he has used that experience to help victims and the families of those injured by negligent health care providers.