Arbitration Agreements are Unfair to the Elderly

In our Northern California practice we often handle nursing home disputes in which the nursing homes try to force the cases into binding arbitration.  These arbitration agreements are usually signed by the elderly patient or their relatives at the time of admission before the resident is aware of any problems with the home. These “pre-dispute” agreements are now rampant in the nursing home industry and it is NOT to benefit the residents.  They are presented to the resident or their family at the time of admission when the last thing on the resident’s mind is whether he or she is being treated fairly by the facility.   Of the numerous persons we’ve talked to who have signed those agreements, none have understood their importance at the time they were signed and all believe that the signing of those agreements was necessary to allow them to be placed into the nursing home.  (It’s not.)

These agreements are prepared by the facilities’ attorneys, and the admissions directors are coached on how to get the residents to sign them and criticized if they don’t.  What we have found in discovery in these cases is that the nursing homes  intentionally place the arbitration agreements towards the end of the packet of documents to be signed so that “trust” will be built up before they get to that agreement.  When asked by the residents what these agreements are about (and few ask), the facility representatives  explain the supposed benefits of those agreements (“it will keep costs down,” “save money,” “be more quickly resolved”).  Yet they never explain that the resident is giving up their right to a jury trial.  They also don’t explain that arbitration proceedings are secret and that there is no ability to obtain appellate review except in the most limited of circumstances.   What they also don’t tell the resident is that the nursing homes often have special relationships with those providing arbitration services and that the arbitrators depend on the repeat business of the nursing home for their livelihood.  On the rare occasion that the resident has the arbitration agreement reviewed by their attorney, they are routinely advised not to sign.

In a recent study for the healthcare industry it was shown that claims resolved under ADR (Alternate Dispute Resolution) agreements are 21% less costly than claims resolved in court.  In other words, the resident receives 21% less than if they had pursued their action in court.  (2012 Long-Term Care Actuarial Analysis by AON Risk Solutions.)

Unfortunately, our current Supreme Court seems enamored with pre-dispute arbitration agreements, regardless of their lack of fairness to consumers.  Until either the law is changed or there is a change in the make up of the Supreme Court, the elderly will continue to receive the short end of the stick when they are tricked into signing such agreements.

Don’t let them trick you.  If you or a family member is being admitted to a nursing home, DON’T SIGN THE ARBITRATION AGREEMENT!!!