Beware of the Fine Print – Nursing Home Arbitration Agreements

Now it’s time to sign all the nursing home admissions documents.  But watch out.  Buried within that mountain of documents is almost always an arbitration agreement.  Arbitration is a form of alternative dispute resolution in which the parties agree to resolve their dispute in a private proceeding before an arbitrator without litigating in court before a jury of your peers.  So if a legal dispute later arises, a nursing home arbitration agreement tries to prohibit you from suing the nursing home in court and instead force you to go through the arbitration process.

And there are more reasons why it’s a bad idea to sign a nursing home pre-dispute arbitration agreement.  Because the arbitration agreement is carefully drafted by the nursing home’s lawyers, it will – of course – heavily favor the nursing home.  That’s the lawyers’ job – protect the nursing home.

For example, the arbitration agreement will wipe out your constitutional right to a trial by jury before your peers.  And the arbitrator’s decision will most likely be your final recourse, which means you will not be allowed to appeal to a court if you believe the decision was wrong or unfair.  Just as bad, the arbitration agreement will dictate how the arbitrator must be chosen.  After all, arbitrators are in business to make money, and almost all of them who service nursing homes market their services to the nursing home industry and the massive health corporations that comprise it.  This business motive raises the concern that the arbitrator’s final decision may not be objective and may instead lean in favor of the industry that keeps the arbitrator employed and making money.  Moreover, an arbitration is a private – not a public – proceeding, and the arbitrator’s decision is usually not publicly accessible.  By its very nature, it lacks openness and transparency, a back-room climate that facilitates biased judgment and lack of accountability.  Finally, the cost of arbitration is continuously rising and, depending on the dispute and the particular language in the arbitration agreement, it could be a more expensive alternative for you than litigating in court before a jury of your peers.

Remember, arbitration agreements are contracts and therefore they will be treated and protected as contracts if they are legally enforceable.   Not all arbitration agreements are enforceable; however, there is no guarantee that a court will relieve you from the onerous and restrictive obligations of that contract.

If you’re presented with a proposed nursing home arbitration agreement, you should always first seek the advice of an attorney before signing it.  And if you’ve already signed one and now have a legal dispute with the nursing home but are being told that it must go to arbitration, you should still seek the advice of an attorney – because an attorney’s review may reveal that it’s not legal enforceable and that you therefore have other legal recourses.