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Watch Out! How Forced Arbitration Can Leave You Vulnerable

It’s a trend we see across the country and in virtually every industry. More and more businesses are including arbitration clauses in their contracts and terms of service.

Nursing home and care facilities are no different. While it’s supposed to protect residents and providers alike, forced arbitration can leave you exposed and vulnerable. The clause is often buried deep within the entry agreement, hidden in the small print and unnoticed until it’s too late.

What is Arbitration?

Arbitration is an alternative dispute resolution method. Both parties – whether individuals or companies – agree to submit their issue to an impartial arbitrator and allow him or her to settle the dispute for them. This all takes place outside of the formal court system.

In theory, it can work quite well. It’s designed to be faster and easier than a traditional lawsuit.

An arbitrator will make a binding decision based on the evidence presented. Arbitration is guided by state and federal laws, but it’s important to remember that an arbitrator is not a judge or even a lawyer.

No Legal Recourse

Let’s imagine for a moment that your mother has recently moved into a nursing home. Within a few weeks, you notice a change in her behavior: she seems withdrawn and nervous. Then one day you find a large bruise on her shoulder and discover that one member of staff has been physically abusing your mother since day one.

Upon bringing this to the attention of the home administrator, she promises to get to the bottom of it. And then she reminds you that you’ve signed an arbitration agreement.

Your hands are tied. Launching a lawsuit against the home, making them accountable for the abuse, is no longer an option for you and your family.
In this scenario, you wouldn’t even be able to find out if that staff member has ever been in trouble for this before, as arbitration cases are private and have no obligation to report abuse, negligence, or mistakes.

Increased Vulnerability

It’s easy to see why nursing homes want that clause in their contracts. They’re protected from lawsuits that could cost them millions and have their name splashed across newspapers and websites.

But for you or your loved ones, forced arbitration puts you at the mercy of an imperfect system.

Arbitration does provide choice of arbitrator and greater convenience, privacy, and efficiency when compared to a lawsuit.

But it can be much more expensive – the cost is split between both parties – and you have no right to appeal any decision. Too often, an arbitrator will go with a “split the baby” mentality and give both sides a little bit of what they want.

On top of that, there is drastically reduced accountability for facilities at fault. They know they won’t have to face the injured party in a court of law. There will be no press coverage, or angry public backlash. The entire procedure is private and confidential.

The financial compensation for victims, even in cases of gross negligence or abuse, is considerably lower than those determined by a judge. Arbitration awards are 35% less on average according to some studies, and an analysis of nearly 1500 claims between 2003-2011 found that over 30% of those handled by arbitration awarded no financial compensation at all.

Sadly, even when you “win”, the money awarded can be woefully inadequate to make up for pain, suffering, and stress, or even to cover the legal and medical costs resulting from the abuse itself.

And although they’re supposed to be neutral, many arbitrators favor repeat “customers” (i.e. the nursing homes) in their decisions. The odds are sometimes stacked against you.

The Reform of Requirements for Long-Term Care Facilities proposal would like to adjust the industry practice of burying arbitration clauses deep within contracts and agreements. The biggest changes would include making it 100% voluntary, and it could not be a condition of acceptance to the home.

In the meantime, you’re under no legal requirement to sign it if presented with one at a care facility. Read through the contract carefully, and if you find mention of forced arbitration, cross it out. Refuse to sign it. Explain to the administrator that you see it, but will not agree to it.

If you or a loved one have suffered at a nursing home, even if you’ve agreed to arbitration already, all may not be lost. Several high profiles cases have had the clause thrown out for various reasons. Contact the experts at Duffy & Duffy, PLLC to see if you have a case.

Forced arbitration is no friend to victims of abuse or negligence. It’s there to protect the providers. Period. Let us tip the balance for you. We can help.