Legislation has been introduced to combat forced arbitration clause abuses.
NPR reporter Ina Jaffe’s recent piece, “Suing a Nursing Home Could Get Easier under Proposed Federal Rules,” told the story of Dean Cole, who was admitted to a nursing home due to his dementia. Two weeks later, he’d lost 20 pounds and went into a coma. He died within the month. The nursing home admission contract Dean’s wife signed contained a buried forced arbitration clause.
These mandatory arbitration clauses mean that a traditional lawsuit has been forgone and disputes will be handled by an arbitrator that has been hired by the entity that you believe has wronged you. Cole’s family had their dispute handled, essentially, by an arbitrator chosen by the nursing home and they had to pay the arbitrator over $60,000 for their services.
Two weeks later, mandatory arbitration was highlighted of the front page of The New York Times in a series entitled “Beware the Fine Print,” and, just a few weeks ago The Boston Globe featured an article entitled “Know what you’re giving up with arbitration clauses.”
This private system for handling disputes benefits corporations while denying vulnerable consumers their rights.
In many instances, it is only after a nursing facility’s negligence has resulted in abuse and/or death, does the resident or family member realize that when they were admitted to the nursing facility they had agreed, via the fine print of their contract, to settle disputes in arbitration, giving up the resident’s constitutional right to a trial.
When deciding on a nursing facility, the resident and his or her family are often operating in a state of urgency and emotion and may be far more focused on quality of care and the service offerings of a facility, and are unlikely to be able to fully appreciate the relinquishing of a critical right, and the irreversible results of signing a contract without thoroughly understanding it.
As one court put it:
“The fact that a resident is signing an arbitration agreement contemporaneously with being admitted into a nursing home is troubling. By definition, an individual being admitted into a nursing home has a physical or mental detriment that requires them to need the assistance of a nursing home… As such, this is an extremely stressful time for elderly persons of diminished health. In most circumstances, it will be difficult to conclude that such an individual has equal bargaining power with a corporation that, through corporate counsel, drafted the form contract at issue.”
This past October, Sen. Al Franken and Rep. Hank Johnson introduced the Arbitration Fairness Act, which has been co-sponsored by 16 Democrats in the Senate and another 74 in the House. This legislation wouldn’t ban arbitration; if both parties preferred arbitration instead of going to court, they could. In instances of dispute arbitration would not be forced, it would be a mutual decision.