What is “Arbitration” and Why Does the Nursing Home Want Me to Agree to It?

Man divides conflicting sides parties with a hand on scales. - arbitration concept

If you are admitting someone you love into a nursing home, it is imperative to read all of the admission documents very carefully. Be on the lookout for an arbitration clause. This is a clause that will either be called an “Arbitration Clause” or an “Arbitration Agreement” or it may be referred to as “Alternative Dispute Resolution”. This clause will provide that if the nursing home neglects your loved one and you have to sue the nursing home that you will not be able to sue the nursing home in court, but instead must pursue the case through arbitration.

What is “Arbitration”?

You may have seen in the news recently that golfer Tiger Woods' former girlfriend is suing him and he and his legal team are trying to force the case into arbitration. Arbitration is a private proceeding where two parties can have a dispute resolved out of court. Typically, the parties present their case to one or more arbitrators who are most often private individuals, perhaps retired judges or attorneys. These private individuals preside over their dispute as opposed to having the dispute in court.

Why Do Nursing Homes Favor Arbitration?

There are lots of reasons why parties might agree to arbitration. If privacy is a concern, arbitration proceedings can be sealed. It's not public the way litigation is.

But why do nursing homes like to try to force disputes into arbitration? There are many reasons for this. In extreme cases nursing homes, particularly large chains of nursing homes, will have an agreement with a large arbitration company and because the nursing home chain is the one sending all these cases to the company they will often give preference to the nursing home.

Agreements like this have led to some cases of outright fraud. The State of Minnesota Attorney General's office sued the National Arbitration Forum (“NAF”) arguing that they had an improper relationship with a variety of large corporations with whom it had contracts. The NAF settled that case and agreed to stop conducting any arbitrations involving consumers.

Not all cases of arbitration lead to outright fraud or collusion between the nursing home chain and the arbitration company. However, nursing homes still favor arbitration because they have determined that their outcomes are typically better.

In an article in McKnight’s Long-Term Care News published on November 11, 2019, Peter Feeney the CEO of HealthCap, an insurance company that provides insurance for nursing homes, and attorney Christina Nechiporchik discussed why long-term care communities should consider arbitration agreements with their residents. Ms. Nechiporchik states the number one reason was that arbitration agreements “help reduce claims.” In response to a question about how arbitration reduces claims, she explained, “It decreases the chance of higher verdicts.”

Fighting Forced Arbitration

Arbitration was originally conceived as an Alternative Dispute Resolution method to be engaged in between businesses or between individuals engaged in business. It was never intended to be a method by which individuals, not engaged in business, would be forced to resolve their disputes against large, well-funded, sophisticated corporations. It was certainly never intended to be a method by which nursing home residents and their families would be forced to resolve their disputes against the large corporations that own nursing homes where the residents were neglected and abused.

At The Dickson Firm, we fight forced arbitration in all of our cases. Attorney Blake A. Dickson is the only attorney who argued this issue to the Ohio Supreme Court on behalf of a nursing home resident. The Dickson Firm has argued this issue in multiple courts, including multiple appeals, and earned many favorable decisions that have helped improve the law in this area.

Putting the Plaintiff at a Disadvantage

Arbitration before a private arbitrator or a panel of arbitrators, typically does not afford the plaintiff the discovery they need. One of the most important parts of any nursing home case is obtaining the necessary documents and tracking down and deposing the witnesses who have relevant information about the case. With arbitration, it's not possible to force witnesses to testify. If a witness does not want to testify and the case is in court, the parties can issue a subpoena to that witness. If the witness ignores that subpoena, there are consequences. The court can order that witness to appear and testify either at deposition or at trial. If the witness refuses to comply with the subpoena, the court can actually send the bailiff out to arrest the person.

In litigation, the parties can compel witnesses to give a deposition and then ultimately to testify at trial. This is particularly relevant for the plaintiff. Typically, the plaintiff, or the individual bringing the lawsuit, needs to talk to these witnesses to prove their case. It is often easier for the nursing home to talk to these witnesses because they're typically their employees or their former employees. If the plaintiff cannot force these employees and former employees to give a deposition and/or to testify at trial or arbitration, then the plaintiff is at a severe disadvantage. Likewise, if the plaintiff cannot get the important documents, this also puts the plaintiff at a disadvantage. The plaintiff in these cases has the burden of proof, meaning they have to prove their case. The defense benefits if the plaintiff cannot get necessary documents and/or cannot depose relevant witnesses.

At The Dickson Firm, we strongly recommend that you not sign any agreement that contains an arbitration clause. If you are reviewing admission documents for a loved one being admitted into a nursing home, ask the admission person if you can cross out the arbitration clause. If he or she says “no”, make sure you make a note of that conversation, who you asked, what you asked, and what the outcome was. If the nursing home forces you to sign the arbitration clause, then the arbitration clause is not enforceable.

Contact a Skilled Nursing Home Abuse and Neglect Attorney

Fighting arbitration clauses is just one of the many ways that we work hard at The Dickson Firm to get the best outcome for our clients. We are dedicated to the rights and the safety of nursing home residents throughout the State of Ohio. If someone you love has been neglected or abused in a nursing home, please call us at 1-800-OHIO-LAW. We would be happy to talk with you and help you in any way that we can.