Legal documents are always tricky. Filled with language that some lawyers can't even understand, and words that haven't been used since the 1800s. We wouldn't blame you for skimming over the exact wording of a nursing home's contract and just signing on the bottom line.
But after a US Supreme Court decision on February 21, 2012, that contract got a whole lot trickier.
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The case was called Marmet Health Care Center v. Brown and here's the brief version: the Court upheld an elder care facility's right to include binding arbitration clauses in the contracts residents sign before entry.
In short, nursing homes can legally prevent residents and their loved ones from suing, even after personal injury, even after a wrongful death caused by nursing home neglect or abuse.
In the event that a resident is seriously injured by a facility's negligence, loved ones may be forced to seek resolution through "arbitration," very different than a true court case.
It all depends on the contract you sign. And it's perfectly legal. But that little clause can have a huge impact on a nursing home patient's life.
We've already mentioned the most obvious, and important, change that binding arbitration clauses force: you can't sue a nursing home.
Of course, you'll still be able to allege that a nursing home acted improperly, and bring a claim of negligence against them. You just won't be able to do it in court.
Instead, you'll use a form of "alternative dispute resolution" called arbitration.
In some ways, arbitration is very similar to a lawsuit.
You still present evidence and use witness and expert testimony to argue your side of the dispute. The nursing will be able to do the same.
All this will be presented before an "impartial" third-party who, in the end, will make a legally-binding decision and determine how much, if any, the nursing home must pay to settle the dispute. But that third-party will be an "arbitrator" not a judge and jury.
During litigation (a lawsuit), neither plaintiffs nor defendants can pick the judge who will hear their case. And while they have some say over the members of the population who will comprise their jury, the idea there is to weed out people who would be biased toward either side's case.
In arbitration, the third-party is actively chosen. Granted, the arbitrator will have to be mutually agreed upon by both sides in the dispute. But many arbitrators actually advertise their services to specific industry groups, making that "objectivity" they claim highly debatable.
A nursing home would be more likely to select an arbitrator who tends to side with elder care facilities. Worse, many arbitration clauses specify arbitrators in advance. The deck seems stacked from the beginning. You'll have to be vigilant, researching an arbitrator's credentials, before you even sign an admission contract.
That's a crucial difference, and there are several more that could mean everything.
Arbitration hearings, during which arbitrators review arguments, evidence and eventually hand down a decision, are almost always closed.
Private, unpublished, with no public oversight or court review for legality. Even the final decision is usually hidden from sight behind a non-disclosure agreement. Many legal scholars argue that this lack of transparency means arbitration proceedings are more likely to be biased.
But the biggest problem? If a nursing home's indiscretions can be concealed from potential residents, people who might move there, elders aren't getting the full story. You might be considering an elder-care facility that is regularly accused of negligence and never know it.
The rules in arbitration are much looser than those governing litigation. Most critically, there's no "discovery" phase during arbitration. During discovery, each party is allowed to request vital information from the other side.
Sometimes this information is gained through "depositions," question and answer sessions. It also involves accessing documents that are not publicly available.
Investigating the facts of a case relies almost solely on "discovery." In arbitration, you can't do it.
Because a binding arbitration clause prevents you from entering a courtroom, it also prohibits you from appealing a decision made in the other party's favor.
And the "binding" part of "binding arbitration" means that all decisions are final. In short, you have no recourse if you lose, whether or not the arbitrator's decision was unjust.
With closed rooms and binding judgments, it's a good thing that arbitration proceedings preserve your basic legal rights.
Effective representation is critical. You can be sure that the nursing home will have an attorney representing them during arbitration. So should you.
When it's not forced on you through a contract, the arbitration process is actually very popular.
According to the Federal Mediation & Conciliation Service, the average arbitration took about 485 days, or 15 months, from grievance to award. A similar lawsuit could take up to 3 years.
Arbitrators aren't just people off the street; they're attorneys themselves. As legal professionals, they're much more likely to understand nuances within your State's laws than the members of a jury.
But they're also less likely to be swayed by the emotional aspects of a case, which can be bad for plaintiffs with gut-wrenching stories.
Because arbitration is usually so much shorter than litigation, many argue that it's also less expensive. And while many associated costs do depend on time, it's pricier to start arbitration.
Public Citizen, a consumer watchdog group, found that a plaintiff would be charged $221 to file a lawsuit valued at $60,000 in a County Court. The National Arbitration Forum would charge $10,925 just to initiate the same case.
In a lawsuit, you only have to pay the judge or jury members indirectly. Their costs are covered by taxpayers. But you will have to pay your arbitrator. Average costs vary widely by state. In New York, the average arbitrator makes $1,363 every day. Multiplied by 4.07 days, the average amount an arbitrator will actually work on your case, and you get $5,547.
Add to that fees for legal counsel and expert testimony, which studies have shown to be higher in arbitration than in court, and alternative dispute resolution looks like less of a bargain.
Here's an example of a typical binding arbitration clause. This one was provided by the American Arbitration Association:
"Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof."
That's the language to look out for. But once you've spotted it, is there anything you can do?
Not really. You can try negotiating the contract's terms. If the nursing home is hard-pressed for residents, they may be willing to alter or remove the clause. Beyond changing the contract, your power lies in not signing it.
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