Published on:

Legislation Introduced to Remove Unfairness of Mandatory Arbitration Clauses

Our Illinois nursing home neglect lawyers have previously shared information on the harm caused by mandatory arbitration clauses. Many of the largest nursing home companies often seek to insulate themselves from certain liability in the regular civil justice court system by steering all disputes into arbitration. Most consumers are unaware of the intricacies of these agreements and often have no idea that they are required parts of their admission procedure.

Arbitration agreements are essentially components of a contract whereby a party agrees that they will have all disputes settled by an “arbitrator” instead of via the regular justice system. In other words, in the assisted-living facility context, if a resident dies because of gross mistreatment at the home, the victim’s family cannot immediately file a nursing home abuse lawsuit to hold the facility accountable for this conduct. Instead, an alternative arbitration process must be entered into. There are many concerns about these arbitration processes. For one thing, they are often guided by the wishes of the defendant who selects where it will take place, who will be the arbitrator, and so on. Obviously the settling of a dispute must be made in a rigorously impartial fashion-which is exactly why the civil justice system exists to begin with. Tampering with that basic judicial principle is almost always a recipe for unfairness. It is very troubling that the arbitrators themselves have a built –in incentive to side with the largest companies in the proceedings, because it is virtually always the company that picks the arbitrator. This essentially means that the arbitrator is employed by the company for whom he or she must decide liability.

In addition, arbitration clauses are often used by the largest companies to prevent class-action lawsuits. These lawsuits are vital at times in order to hold wrongdoers accountable for small systematic harm that they cause to a large group. If those victims are forced to hold the wrongdoer accountable individually, it is usually cost prohibitive. However, if those harmed are able to band together, pool resources, and pres for accountability on a systematic scale, then it is often possible to ensure that the company acts fairly. However, if every individual is forced to go through arbitration, then class-action suits are essentially eliminated. This has the effect of allowing certain companies to harm large group of consumers with little risk of recourse. As one individual involved with the legislation noted, “these forced arbitration clauses in contracts deny consumers their right to hold companies accountable when something is wrong. They basically let companies off the hook.”

As recently explained in a New York Times piece, these and other concerns have led some legislators to consider passage of a bill known as the Arbitration Fairness Act. Our Illinois nursing home neglect attorneys know that the measure would have a beneficial impact on many residents of long-term care facilities and their families. Specifically, the bill seeks to make clear at the federal level that all arbitration contracts in consumer and employment contracts are invalidated. The United State Supreme Court had previously ruled that such clauses were acceptable, even when state law deemed those clauses to be unfair to consumers. This measure would be an important step forward in ensuring that consumers of all stripes have the fair access to the legal system that justice demands.

See Our Related Blog Posts:

Arbitration Agreements Continue to Unfairly Limit Rights of Nursing Home Neglect Victims

U.S. Senate Arbitration Fairness Act Would Provide Fairness for Nursing Home Abuse Victims