Why They Should Be Prohibited in Admission Agreements
No citizen of California should be required to surrender basic constitutional
rights and civil protections to secure a bed in a nursing home or in a
residential care facility or as a condition for adequate care. This is
particularly true when the citizens being asked to sign these agreements
suffer from a variety of physical and mental ailments, and when they and
their family members do not understand what they are signing.
Yet, this is exactly what is happening in California today. In an effort
to prevent residents from being able to sue for abuse or neglect, nursing
homes and residential care facilities are asking new and current residents
to sign admission agreements that include binding arbitration provisions.
What is Binding Arbitration?
By signing an RCFE or nursing home admission agreement that includes
an arbitration provision, the parties are agreeing to give up their constitutional
right to have a dispute, including neglect and abuse cases, decided in
a court of law in front of a jury, and instead are agreeing to the use
of binding arbitration. This means that the decision of the arbitrator
is final and there is no appeal. This means that, rather than having the
issue decided in public by a jury of their peers in front of a judge,
the matter will be decided in private, by a private (and very expensive)
arbitrator. Arbitration proceedings are not part of the public record
and not subject to judicial review.
Myths and Facts About Arbitration Agreements
Myth: Agreements are Voluntary
The providers of care would have you believe that residents and their
family members are voluntarily signing these agreements. These
pre-dispute arbitration provisions are usually part of a host of documents
involved in an admission to an RCFE or a nursing home.
They are usually presented in a take it or leave it setting.
Family members often feel compelled to sign such agreements to ensure
that the care of their family member is not compromised. If they dont
sign the agreement, they probably wont be admitted to the facility
in the first place. Few of the residents or their representatives understand
the consequences of the agreement, nor are they represented by counsel.
Yet they are asked to sign a legal document drafted by the facilitys
legal counsel relinquishing their right to a trial by jury. What bargaining
power does a Medi-Cal resident or an aged or disabled consumer have in
Myth: Arbitration is Neutral
According to one nursing home industry attorney: The greatest
appeal of arbitration for the provider is that this process takes the
case out of the hands of the jury (whose biases we are all too familiar
with) and entrusts it to a neutral arbitrator.
The truth is that this neutral arbitrator is a private judge
whose services can cost anywhere from $400 to $1,000 an hour or more.
The plaintiff bringing a neglect case is a one-time customer for the private
arbitrators, while corporate defendants and insurance companies will be
involved in cases again. Some judges take this into account: if they want
repeat business, they know if they impose a high compensatory award -
let alone punitive damages - the corporate defendant or its insurance
company wont use their services again.
Myth: Arbitration is Faster
Requiring arbitration agreements actually denies quick access to justice
for the aged and the disabled. Under current California law, a plaintiff
who is 70 or older or one in compromised health can ask for a preference,
i.e., an expedited hearing. When the Court grants a preference, the trial
must be set within 120 days. In arbitration proceedings, where the plaintiff
is ill or dying, the defendants can and do drag out the selection of the
arbitrator and seek indefinite postponements of the hearing until the
plaintiff is dead. The arbitrator also can ignore the requests of dying
plaintiffs to a speedy hearing. The victims of such delays have no recourse
to a higher court and no right to an independent review of procedural
Myth: Arbitration is Cheaper
Given a choice, what would you rather have? A public judicial officer
who is paid by the taxpayers or a private judge, whose services can add
$10,000 to $20,000 in out-of-pocket costs to your lawsuit. Few nursing
home residents, 64% of which have their costs paid for by Medi-Cal, can
afford a private arbitrator. Indeed, arbitration might be cheaper for
the nursing home or RCFE, since the moneys not coming out of their
pocket - but the pocket of the insurance company. Victims of neglect and
abuse need protection from the public courts and the jury system, not
higher costs and added risks.
Prohibit Pre-Dispute Arbitration Agreements
Californias policy makers should prohibit pre-dispute arbitration
clauses in RCFE and nursing home admission agreements. If the parties
choose to enter arbitration after a dispute arises, that is their right.
But the process should be voluntary, without coercion, and the residents
admission or stay in a facility should not be conditioned upon the signing
of a one-sided agreement.