Ask the legal expert
Attorney John Durso, Ungaretti & Harris LLP
Following some favorable court rulings, many providers have turned to the use of mandatory-arbitration agreements in their admission contracts.
Generally, arbitration agreements can provide advantages to both parties in an admission contract: arbitration can be quicker and less expensive than litigation through the court system; it offers finality and is more predictable, less risky and possibly less hostile; it places a case with sympathetic plaintiffs in the hands of a neutral arbitrator, who usually has expertise in the underlying issue in dispute; damages are often lower than those a jury might award; and having an arbitration agreement might discourage some individuals from initiating a claim in the first place.
Though arbitration agreements present certain advantages, from the perspective of a resident (who could become a plaintiff against the facility), the idea that an arbitrator may award significantly less than a jury might award discourages many residents from signing an admission contract with an arbitration agreement.
In the face of such reluctance, all a long-term care provider can do is present these arguments in favor of arbitration and further explain to residents that the binding and legal arbitration agreement is in everyone's best interest.
Of course, one must carefully draft the arbitration agreement and disclosures surrounding those agreements. In drafting an arbitration agreement, one should first review the applicable state law. The fact that some courts have upheld arbitration agreements over contrary state law may prove short lived.