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Miraldi & Barrett Co., LPA

Striking Down Mandatory Arbitration Provisions

Nursing homes are routinely adding provisions to their admission papers that include a requirement that any dispute between the resident and the nursing home be submitted to mandatory arbitration.  These provisions often favor the nursing home because litigants in arbitration do not have the same ability to get information from the other side as they would in a court case.  In addition, an arbitrator may not award as much in losses as would a jury.

If a resident is injured or dies as a result of the negligence of a nursing home's employee,  the resident or family would normally want to file a lawsuit to hold the nursing home accountable.   If the resident filed an admission document that included mandatory arbitration, the nursing home will attempt to get the case dismissed and require the resident to proceed under arbitration. 

The courts have drawn a distinction between wrongful death claims filed by a resident's family members and injury action brought by the resident.  In wrongful death cases brought by the surviving family members, the court will not enforce the binding arbitration provision if it was signed by the resident and not his family members.  The wrongful death action is brought to compensate the family members for the losses that they sustained because of the death of their family member. The family members are not bound by something that the nursing home resident signed.

In other situations where the nursing home resident was injured but did not die from the injuries, the courts have reached different results about the enforceability of the arbitration provision.  Some courts have enforced the provision finding that arbitration is favored over jury trials.  Other courts have struck down the provision if two conditions are present:  (1) the nursing home had a far superior bargaining position than the resident and (2) the arbitration provisions unfairly favored the nursing home (e.g. losing party required to pay other side's attorney fees, nursing home could sue in courts for its bills against the resident.)

In a recent decision, the Ohio Supreme Court refused to invalidate an arbitration agreement between a 95 year old resident and the nursing home.  The agreement took away the resident's right to a jury trial, attorney fees, and punitive damages.  To read more about this recent case, click here.

In any case where a resident is injured in a nursing home, a competent attorney in this area should review the admission agreement.  If there is a mandatory arbitration provision, the attorney should immediately determine whether the family should seek to invalidate the provision.