Some ADR Firms, Plaintiffs Lawyers Shun Nursing Home Arbitration
Nursing homes are increasingly requiring arbitration of disputes over the quality of their care, and many state courts are upholding the contracts.
Some state courts have overturned the agreements because they were unconscionable or signed under duress, the Wall Street Journal reports (sub. req.). But other courts have enforced the agreements even when they were signed by patients who could not read or who suffered from confusion.
The result is a drop in the average cost of payouts, from about $226,000 per claim for 1999 incidents to a projected $146,000 per claim for 2006 incidents, according to Aon Global Risk Consulting. The amounts include legal fees.
Nursing homes adopted the agreements to hold down litigation costs after some headline-grabbing awards in the 1990s, the story says. Trial judges approved awards of $56 million for a Texas woman who suffered from bedsores and $3.6 million for a California woman who fractured her hip and shoulder after nursing home staffers dropped her. But the original awards were higher—$83 million and $95 million respectively—before the judges lowered the amounts.
Consumer advocates and even two arbitration companies dislike such agreements. The American Arbitration Association and the American Health Lawyers Association usually avoid cases involving the contracts, the story reports. Two senators, Republican Mel Martinez of Florida and Democrat Herb Kohl of Wisconsin, also see problems. They introduced federal legislation on Wednesday that would ban advance mandatory arbitration agreements in nursing home disputes.
“It is an unfair practice, given the unequal bargaining position between someone desperate to find a place for their loved ones and a large corporate entity like a nursing home,” Martinez said.
Plaintiffs lawyers also have problems with the agreements. One lawyer, A. Lance Reins, said his expenses outweighed the size of a $90,000 arbitration award to the family of a dehydrated patient. The woman had died a day after her daughter took her to a hospital because the nursing home refused to call an ambulance.
Now Reins says he’s reluctant to take mandatory arbitration cases. “You know, at the end of the day, you won’t get the relief you want,” he told the newspaper.
