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Nursing Homes and Arbitration Clauses - What Happens When Residents Are Hurt?

Nursing Homes and Arbitration Clauses - What Happens When Residents Are Hurt?
My Nursing Home Contract Says I Can't Sue for Neglect? Is This Legal? What Can I Do?

Corporate America has learned that mandatory arbitration clauses are a license to steal. In our experience, arbitration panels are more favorable to defendants and frequently give smaller awards. Unfortunately, many nursing homes now mandate arbitration as the exclusive way to resolve any disputes or injury claims.

What is Forced Arbitration?

The Seventh Amendment of the United States Constitution says, “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.”

In simple terms, our Constitution guarantees the right to a jury trial for any claim exceeding $20. A mandatory or “forced” arbitration clause prevents a party from exercising their Constitutional rights. Many nursing homes require residents to submit any dispute that may arise to binding arbitration as a condition of moving into the facility. The resident is typically required to waive his or her right to sue, to participate in a class action lawsuit, or to appeal. Forced arbitration is mandatory, the arbitrators’ decision is binding, and the results are not public.

The United States Supreme Court has said in several different mandatory arbitration decisions that individuals can waive their Constitutional rights if the waiver is knowing and voluntary. It usually doesn’t matter if the nursing home resident never bothered to read the fine print in the contract presented by the facility.

Obviously, we object to these provisions. Often, we find that they are signed by patients who are mentally unable to consent. Other times they are signed by family members. Even. when residents or family members are aware of and understand the waiver, the contracts are often signed out of fear that the resident won’t be allowed to move in without signing. (Remember, many nursing home residents are vulnerable and desperately in need of care.)

Why Forced Arbitration Is Bad

Believe it or not, we have no problem with arbitration of disputes. If both parties voluntarily agree to resolve their dispute outside of court, we have no objections. Unfortunately, companies use forced arbitration to stack the deck in their favor.

Here are some of the objections we have to forced arbitration:

  • Mandatory arbitration limits the nursing home resident’s options for resolving a dispute. Patients are locked into just one way of resolving their dispute or injury claim. Typically, the nursing home has already designated the arbitration company and the rules to be used (and the arbitration forums are selected for being friendlier to the nursing home.)
  • Forced arbitration clauses generally bind the resident—not the facility. Many forced arbitration clauses are written, so that the facility can sue the resident but the resident’s only remedy against the facility is filing an arbitration case.
  • Arbitration has fewer protections When we seek redress in the courts, we get a jury of our peers. Those jurors and the judge are required to follow the law. If we believe a mistake was made, we can file an appeal. None of that happens in an arbitration. Arbitrators aren't required to follow legal precedent and there is no appeal. Arbitration hearings are not open to the public and the decisions aren’t published. This allows bad nursing homes to further hide their conduct from public scrutiny.
  • Arbitration limits discovery. In any lawsuit or arbitration, the plaintiff has the burden of proof. In a wrongful death or nursing home neglect case, that means the resident or the resident’s family has the burden of proof. Discovery is the process by which parties can obtain documents and records, take depositions and obtain witnesses. Those procedures are more limited in an arbitration proceeding. Since the patient has the burden of proof, limited discovery typically hurts the resident and favors the nursing home.
  • Damages are more limited. A resident will likely only to go to arbitration once in his or her life. Nursing homes may have many disputes. That creates an institutional bias in favor of the defendants. If I am an arbitrator and I want to keep working, my bias will be towards the company and not a one time resident.

Is that bias real? We think that bias is very real. In our experience, arbitrators are less likely to award punitive damages. In fact, the U.S. Supreme Court has said that a company can enforce a punitive damages waiver in an arbitration clause.

Forced Arbitration Injustice Repeal Act (FAIR ACT)

Congress is considering legislation to prohibit companies from forcing consumers, including nursing home residents, from waiving their Constitutional right to seek redress in the courts. The FAIR Act doesn’t prohibit arbitration, it simply prohibits companies such as nursing homes from taking away the consumer’s choice when it comes to litigating disputes.

The Act passed the House on a largely party line vote with Democrats in favor and all but two Republicans opposed. As this post is being written, the bill is now in the Senate where it’s passage is less certain.

Can Nursing Home Residents Still Get Help for Injuries?

We aren’t shy about blowing the whistle on unfair healthcare practices such as mandatory nursing home arbitration clauses. But even with forced arbitration, justice is still possible.

Not every nursing home has such a clause and occasionally a prospective resident can get the facility to remove the clause. That is rare but does happen, particularly if the facility has several unfilled beds and needs more residents.

Mandatory arbitration clauses can also be voided if signed by a nursing home resident who didn’t have the capacity to knowingly waive her rights to access the courts.

Even if we are forced to arbitrate injury claims, justice can still be found. We just have to work a little harder.

Are You the Victim Of Nursing Home Neglect?

We and our nationwide network represent residents of nursing homes, assisted living facilities and hospices. We also accept cases from families of those residents as well as homebound patients who were neglected or abused by a homecare service. Our mission is simple, we protect our older and disabled clients

To learn more, visit our nursing home abuse information page. Ready to see if you have a case? Contact us online, by email [hidden email] or by phone at 833-201-1555. Simply because you are in a nursing home doesn’t mean you must suffer poor care.



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