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New Report: Beware of Forced Arbitration Dangers

Attorneys working with families whose loved ones were harmed by inadequate care in nursing homes have long warned about the dangers of mandatory arbitration agreements. Buried in admission documents, often presented to families in the midst of emergency, these “agreements” usually prevent families from using the traditional civil justice system to protect their rights. The bottom line: These clauses should be avoided like the plague if at all possible.

The American Association for Justice recently released a new report that provides significant context to understand how these arbitration clauses arise and who benefits.

In the Interest of Big Business
As the report notes, the general purpose of arbitration clauses is to insulate big businesses from accountability. Summarizing the situation, the AAJ report explains that “forced arbitration eliminates all of the checks and balances of the civil justice system, including the right to a public forum, the right to demand information from a corporation, the right to a written record, and, most importantly, the right to trial by jury.”

In most cases, these forced arbitration clauses are written as broad as possible. This allows them to be applied no matter what the harm, from abuse to neglect and everything in between. Functionally, they act as a barrier to the court. As soon as possible, defense attorneys in these cases will assert that the clause must be upheld and get judges to force a case into arbitration, where the structure is stacked heavily against the consumer.

Secret Agreements
One particularly invidious aspect of these agreements is the way that so many consumers find themselves bound. In nursing homes, as already mentioned, they usually take the form of one piece of paper in the middle of a stack that families rarely pay attention to. In other contexts the process is even more secretive. Often, simply opening a box or accepting a package binds the purchaser to arbitration in the event of dispute. Most members of the public remain completely unaware of the way these clauses are taking away their rights. It is only in the event of problems that they learn of the situation. By then it is often too late.

The Politics
How are companies able to get away with this? The main answer is that they are operating in silence. Along similar lines, many businesses have fought for different “tort reform” causes to minimize their liability, including damage caps. However, that issue has gained national prominence and companies have been forced to defend the indefensible.

Alternatively, pushing forced arbitration clauses has gone under the radar, and so the damage is being done in many industries without much public oversight. Sadly, the “success” of these clauses has a similar effect to other more well-known tort reform efforts–taking away consumer rights and insulating businesses from accountability.

Legal Help
If you have questions about an arbitration agreement or want ot know if these issues affect your loved one who was hurt by inadequate nursing home care, please contact our attorneys today to see how we can help.

See Other Blog Posts:

New Ally in Arbitration Disputes: Small Businesses

State Supreme Court Mandates Arbitration in Nursing Home Death Case