Arbitration Clauses in Nursing Home Contracts Challenged

March 21st, 2016 by beasleyferber

The New York Times (2/22/16) has reported on an interesting nursing home case in Massachusetts. The case arises out of a very tragic incident: in 2009 a 100-year-old nursing home resident suffering from dementia murdered her 97-year-old roommate. The roommate, due to her dementia, was deemed unfit to stand trial, and she was committed to a state hospital. The victim’s son, however, tried to hold the nursing home responsible for the death. He claimed that the roommate had a history of problems, and should not have been placed in the same room with his mother. However, he was barred from taking the nursing home to court, because the admission contract contained an “arbitration clause.” This is a clause stating that any dispute, even one as serious as this, must be handled by arbitration, and not a lawsuit. This is important because arbitration is private, i.e., not subject to public scrutiny, and there is no judge or jury. The clauses are often buried deep in the “fine print,” and many people, especially frail elders, do not understand them. This is especially true because people are almost emotionally vulnerable when admitting a family member to a nursing home.

In the past, it has been very hard to challenge arbitration clauses in court. The reason is that courts are loathe to interfere with the terms of an otherwise valid legal contract. In this case, though, the attorneys representing the man made a very clever argument: He signed the contract in his capacity as power of attorney for health care, and as such, his attorneys argued, he did not have legal authority to agree to an arbitration clause. The case is scheduled to go to trial, which is a positive sign. It will be very interesting to see where this case goes, and whether it will eventually set a precedent.

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