Sherri L. Warfel

Nursing Home Negligence: Arbitration Clauses in Nursing Home Contracts

As an New Jersey injury attorney, one of my specialty areas of practice is nursing home negligence. Neglect of the elderly, ill and infirmed happens every single day in nursing homes across the U.S. The most common nursing home negligence issues are bed sores, pressure wounds and preventable falls, but there are a whole host of other mistakes by nursing home staff and avoidable accidents that regularly do occur.

Most people believe that when a loved one is the victim of neglect, the nursing home can be sued for damages. Unfortunately, that is not necessarily a correct assumption. During the admissions process, a contract is signed with the facility. More and more these days I am finding “mandatory arbitration clauses” in those agreements. The purpose of this article is to warn you about such clauses and to explain the consequences associated with them.

Over the years, you’ve probably heard about “arbitration.” It’s a method of resolving a legal dispute that is used as an alternative to a trial in a court of law. At arbitration, there is no judge or jury. Rather, a person or panel of people, known as the arbitrator(s), reviews the evidence and renders a decision that is legally binding on both sides. 

Arbitration can be a good thing when it is deliberately selected by the parties to a dispute as the best course of action for them under the circumstances. This is called “voluntary arbitration” — a conscious and informed decision is made, with input from the parties’ respective attorneys, to relinquish the right to a trial by jury and instead pursue arbitration. Some of the reasons for choosing arbitration are that the parties can select a knowledgeable and unbiased arbitrator or panel of arbitrators who will decide the case, and it is often faster and cheaper than the trial route.

Today, arbitration clauses are being included in nursing home contracts.  By signing on the dotted line or clicking on-line to “I AGREE” to the terms of service,” patients and their families, often unknowingly, are being relegated to “mandatory arbitration” upon terms dictated by the nursing home.

Mandatory arbitration in a nursing home negligence situation is generally not a good thing. Usually the nursing home gets to choose the arbitrator, and when the arbitrator depends on the nursing home for repeat business, there of course is an inherent incentive for the arbitrator to rule against the patient. Usually the arbitration is private and confidential so that the nursing home can avoid bad press and public scrutiny. The arbitration is binding, in which case the patient waives his or her rights to access the courts and to have a judge or jury decide the case. Usually the patient cannot recover attorneys’ fees and certain consumer protections laws, like treble or punitive damages, are unavailable. There are very limited avenues for appeal, which means that an erroneous decision cannot be easily overturned. Often, the patient is required to pay for part of the cost of the arbitration, and arbitrators charge hundreds of dollars per hour.

The Courts of the State of New Jersey regularly enforce such mandatory arbitration clauses unless they are unconscionable, that is, so one-sided and onerous as to be characterized as unfair or unjust.

Here is an example of a mandatory arbitration clause:

Any action, dispute, claim, or controversy of any kind now existing or hereafter arising between the parties in anyway arising out of, pertaining to or in connection with the provision of nursing home services, any agreement between the parties, the provision of any other goods or services by the nursing home or other transactions, contracts or agreements of any kind whatsoever, any past, present or future incidents, omissions, acts, errors, practices or occurrence causing injury to the patient whereby the nursing home or its agents, employees or representatives may be liable, in whole or in part, or any other aspect of the past, present, or future relationships between the parties shall be resolved by binding arbitration administered by The American Health Care Association.[1]

So what’s to be done about a mandatory arbitration clause in a nursing home contract? Look for the contract in your admissions package. It may very likely be buried in the pile of documents you will be asked to sign. It is unlikely that anyone will bring it to your attention and adequately explain your rights. Read the contract before you decide on a facility. Ask for a copy to review.   You may even want to consult a nursing home negligence attorney before signing. There is an easy way to avoid being forced into mandatory arbitration in a nursing home. You do not have to sign the arbitration agreement if you don’t want. If signing the arbitration agreement is a condition to the admission of your loved one to the facility, you may want to consider another facility. You should also strongly consider the trustworthiness of this facility in the care of your loved one if you are being dealt with this way upon admission. The decision to sign is up to you, but make it your decision, not a mandate of the facility. Remember in almost every instance signing the arbitration clause means you are giving up your loved one’s rights – the right to a trial, to collect certain damages, and other rights.

Learn more about: Nursing Home Abuse & Negligence

[1] The American Health Care Association represents more than 11,000 long term care facilities.

Sherri L. Warfel

Personal Injury, Nursing Home Abuse & Neglect

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