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The Problem With Mandatory Arbitration Clauses in Nursing Home Contracts

Contract laws are often complex. In general, individuals are free to contract with one another as they see fit. The courts exist to enforce those contracts. However, our Chicago nursing home neglect lawyers know that it is rarely that simple. Power differences in the modern world mean that the principles of negotiation in business dealings simply do not exist in some settings. That is why for decades courts have acted as a key intermediary ensuring that egregious contract terms, usually forced upon one without knowledge or ability to negotiate fairly, are not upheld.

This debate continues today, including on issues related to nursing home neglect. In particular, there remains much disagreement about mandatory arbitration clauses in nursing home admission contracts. These clauses force residents to give up their basic legal rights in the event that a dispute arises related to the care they receive at the home. Essentially, the clauses mean that if a nursing home causes harm by acting negligently, the victims cannot use the regular civil justice system to seek relief.

A recent letter to the editor from The Legal Intelligencer poignantly discussed the problems with these clauses. The letter points out the extreme emotions in play when a loved one is forced to move into a nursing home. This is an incredibly stressful time, often faced by seniors and their adult children. The contracts and clauses must be signed in the middle of the emotional rollercoaster. Our Illinois nursing home attorneys appreciate that this fact must be taken into account when evaluating the merits of these legal arrangements.

Some claim that arbitration is actually a superior model of resolving disputes, and residents are better served by using arbitration. If that were true, then residents could always agree to arbitration when the dispute arises. However, these clauses are always included “pre-dispute” when the family does not have the aid of counsel. Clearly, these companies place the clauses in the contract for their own benefit at a time when virtually no nursing home neglect lawyer would advise the agreement be signed.

Many supporting these clauses seek to avoid a jury under the assumption that juries are always “guided by emotion.” Yet, this perspective flies in the face of the 7th Amendment to the U.S. Constitution, which guarantees a right to a trial by jury. Obviously jury verdicts will always go against one side in a dispute. That side will likely argue that the jury made a mistake and was guided by improper principles. At the end of the day, however, our Founders rightly identified that the only way to fairly settle disputes was via an impartial group of individuals pulled from the community. Flaws can be pointed out, but that does not mean the jury system itself should be replaced contrary to constitutional dictates.

We continue to urge all local residents to be aware of the details of agreements signed during a nursing home admission. No one should ever have to deal with the legal consequences of a loved one harmed by nursing home negligence. However, if the need does arise, the family deserves the same basic access to the justice system guaranteed by the constitution.

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