When Arbitration Clauses Fail . . . You Win!

signing docsWhat do nursing homes owners fear most? A panel of eight citizens hearing a case of nursing home abuse and neglect. That’s why they try to keep themselves out of court by enforcing nursing home arbitration clauses.

What is arbitration?

Arbitration is a way to settle disputes; it’s an alternative to bringing cases before a jury in a courtroom. Arbitration began as a way for similarly situated businesses to quickly resolve disputes without filing lawsuits and going to court. This worked because corporations had the same bargaining power, had access to lawyers, and were familiar with routine practices within their industries.

But in the last few years, corporations have been using arbitration against consumers. Just about every consumer contract — like phone service, credit cards, and lately nursing homes — contains arbitration clauses. In fact, the subject of arbitration clauses in consumer contracts has been the subject of a recent series in The New York Times.

What does an arbitration clause look like?

A typical clause can sound as harmless as this: “Any controversy, dispute, disagreement, or claims of any kind arising between the parties after the signing of this document in the resident or their family claims a violation of any of right of the resident shall be settled exclusively by binding arbitration.” But the consequences of signing and agreeing to such a clause will affect the value of your entire dispute and the rules by which you can present a claim.

You’ll frequently find these “dangerous” clauses buried in the Admission Agreement, which is often many many pages long. The admission process is a stressful time for residents and their families, so why would a nursing home present a stack of legal documents for signature? One reason might be that they’re trying to hide something — like an arbitration clause. I find it hard to believe that residents would knowingly give up their right to have their case heard by a jury in favor of a panel of corporate lawyers. Residents and families often sign such agreements without full knowledge of the consequences.

Is arbitration fairer and quicker?

No. My practice has seen an increase in nursing home companies trying to prevent families from bringing neglectful care disputes to court. Instead of a jury of ordinary citizens, the corporations that own nursing homes want disputes heard by lawyers who often have worked for the long-term care industry. And they want those disputes heard in a forum where the rules of evidence and powers of the court do not apply.

Nursing home arbitration clauses deny residents the option to have a jury hear their cases. Why would a nursing home want to avoid a citizen jury in cases of nursing home neglect and abuse? The answer is money — isn’t that always the case? The long-term care industry’s own research shows that in cases of proven neglect, jurors deliverer higher-dollar verdicts than arbitration panels would award. Arbitration panels are usually stacked with corporate lawyers who have served the nursing home industry.

Can signing nursing home arbitration clauses be a condition of admission?

No. Ohio law is clear on this: A nursing home cannot force you to agree to arbitration to be admitted. So be educated and be aware! Make sure to look for such a clause in your paperwork. If you find one, you can choose to cross it out and refuse to sign that clause. You will be surprised when the admission director says nothing or agrees.


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