State supreme court takes on arbitration agreements

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A family member must have an explicit right to waive a long-term care resident's right to a jury trial when signing an arbitration agreement, otherwise it cannot be enforced, the Kentucky Supreme Court has ruled.

The Supreme Court ruling concerned three personal injury and wrongful death lawsuits filed against nursing homes by relatives or representatives of residents who had died in the facilities. In all three cases, the nursing home moved to dismiss the suit and arbitrate the dispute based on signed arbitration agreements.

In those cases, the court ruled last week, the arbitration agreements were not enforceable because the signing parties did not “clearly and convincingly” show they had the authority to give up the decedent's right to a jury trial. In order to waive the decedent's right to trial, the families involved in the cases would have to “explicitly” set out their authority in the power-of-attorney document, the court ruled.

In its ruling, the court compared entering an arbitration agreement to terminating parental rights, putting a child up for adoption or giving up the right to worship freely.

“Without any doubt, one may expressly grant to his attorney-in-fact the authority to bargain away his rights to access the courts... by entering into a pre-dispute arbitration agreement,” the court's opinion reads. “We will not, however, infer from the principal's silence or from a vague and general delegation of authority to ‘do whatever I might do,' that an attorney-in-fact is authorized to bargain away his principal's rights of access to the courts.”