Forced and Often Rigged, Arbitration Only Helps Companies
Some companies practice forced arbitration by removing its consumers and workers right to file a claim in a public court through formal, signed agreements. As defined by the American Bar Association, arbitration is “a private process where disputing parties agree that one or several individuals can make a decision about the dispute after receiving evidence and hearing arguments.” Similar to what happens in a trial, those involved will present their case along with evidence to the arbitrator. But parties may not have to follow state or federal rules of evidence. Likewise, the arbitrator is not always required to apply the governing law.
Millions are subject to the binding process, according to a new report by the American Association for Justice (AAJ). Truth About Forced Arbitration, calls the process an immunity and effort to allow companies to continue breaking the law. The AAJ collected five years of data on consumer and employment forced arbitrations reported by the nation’s two largest arbitration providers, the American Arbitration Association (AAA) and Jams and concluded these findings.
- Though there are more than 800 million arbitration clauses estimated to be in effect, this new study found there are only 6,000 consumer arbitration claims filed every year.
- On average, only 382 consumers a year win a monetary award in forced arbitration.
- Over the five years studied, consumers brought 6,012 claims valued at at least $3.7 billion in damages. They won monetary awards in just 131 cases.
- Americans are more likely to be struck by lightning than they are to win in forced arbitration.
- In the five years studied, there were only 16 nursing home arbitrations reported at AAA. No consumers won any of their cases while corporations won four of the six they initiated.
Arbitration Serves No Purpose in Providing Justice for Neglected and Abused Nursing Homes Residents
For decades, forced arbitration has been fundamentally unfair for neglected and abused nursing home residents and their families. For example, if an 88-year-old man suffering from cancer was seriously injured, sickened, or died as a result of negligent care in a certified nursing home, his family would not be able to take the issue to a jury trial because upon his nursing home admission a few years back, he signed a contract that included an arbitration clause as a precondition to being cared for. While all contracts may different, below is an example of a provision of a simple mandatory arbitration clause that may appear in a nursing home contract.
“Any controversy or cause of action resulting from or relating to this contract or any breach thereof shall be settled by arbitration before the American Nursing Home Arbitrators association. The number of arbitrators shall be three. The place of Arbitration shall be Chicago, Illinois. Illinois law shall apply.”
If you are in the process of choosing a nursing home for yourself or a loved one, we strongly suggest that you ask if the contract contains a mandatory arbitration agreement. If it does, we recommend that you do not sign it.
CMS Final Rule on Forced Arbitration, July 2019
Forced arbitration practices by nursing homes change throughout administrations. In 2016, the Obama administration banned forced arbitration by nursing homes only to be overturned by the Centers for Medicare & Medicaid on July 6, 2019. Legal rights have again been forced and stripped from residents by allowing nursing facilities to use these confusing agreements upon their admission.
Under the Final Rule published in July, long-term care facilities must now comply with the following criteria:
- Not require a resident or his or her representative sign an agreement for binding arbitration as a condition of admission to, or as a requirement to continue to receive care at the facility.
- Ensure that the agreement is explained to the resident or his or her representative in a form, manner and language that he or she understands. The resident or his or her representative must acknowledge that he or she understands the agreement.
- Ensure that the agreement provides for the selection of a neutral arbitrator agreed upon by both parties and a venue that is convenient to both parties.
- Ensure that the agreement does not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state or local officials.
- Retain copies of the signed agreement for binding arbitration and the arbitrator’s final decision for five years after the resolution of any dispute resolved through arbitration with residents. These documents must be available for inspection upon request by CMS or its designee.
- Grant residents a 30-calendar day period during which they may rescind their agreement to arbitrate.
Several long-term care providers have since sued the Federal government stating that the amended arbitration rule is in violation of the Federal Arbitration Act (FAA) and the governing bodies have no “statutory authority” under the Medicare and Medicaid acts to regulate alternative dispute resolution.
Victims of nursing home abuse and neglect fare better when given the opportunity to plead their case in front of a jury. And ultimately, abused and neglected nursing home residents and their families deserve their day in court, and these cases are deserving of public scrutiny. Nothing should get in the way of that.
How Can We Help?
Since 1992, our personal injury team has recovered more than $660 million in verdicts and settlements for our clients, including a number of record results.
If you or a loved one has suffered injury or death because of nursing home negligence, you may seek compensation to hold all wrongdoers accountable. We have experience in interpreting nursing home agreements and know when our clients are being mistreated.
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To review the new rule, visit here.