Why You Should Avoid Arbitration Clauses in Nursing Home Admission Agreements

September 24, 2020

By: Matthew J. Bilker, Esquire

Choosing to live in a long-term living facility, or sending your mother or father to live in an assisted living residence, is a major life decision.  The care you might receive at a long-term living facility varies widely depending not just on the facility, but upon the staff and professionals working at that facility.  When considering the health and well-being of our closest family members, you need to be diligent and thorough in evaluating which care facility you plan on using, and what conditions govern the relationship between those facilities and their residents.

Nursing home negligence and abuse happen regularly.  No one wants to get the call from the nursing home that their mother or father “had a fall”.  They do not want to be visiting their parents to find mysterious sores on their bodies. Even suspected abuse is scary. Unfortunately, these situations happen time and time again. And when our elderly parents and grandparents are unable to thoroughly explain what happened or describe the circumstances of their broken bones or bed sores, it is left to all of us to not only make sure that our family members are safe, but that the long-term care facilities are held responsible for their acts of negligence.

Fortunately, the civil justice system helps all of us protect our family members who are residents of these facilities.

Our office regularly represents injured individuals or their estates when something terrible happens in an assisted care facility.  We have experience evaluating the documentation, comparing reports to state and federal regulations, and retaining experienced professionals to determine whether there has been a deviation from the applicable standard of care.

One of the first documents we ask our clients to provide to us when we are evaluating a case is the Admission Agreement, meaning the document that is signed prior to someone moving in to a care facility.  Nursing home facilities often try to sneak protections for themselves into these agreements before the residency even begins.

Generally speaking, parties to a lawsuit are entitled to a trial by jury pursuant to the Pennsylvania Constitution.  However, nursing homes have consistently tried to avoid facing a jury when they are being held accountable (and for good reason).  Jurors do not like to picture themselves or their family members in the situation nursing home plaintiffs are in.

So, nursing home administrators add a clause to their Admission Agreements that prohibits claims against nursing homes from proceeding to trial by jury. Rather, they are forced into mandatory arbitration.  Those arbitrations are usually decided by an allegedly “neutral” (usually nursing home friendly) attorney who do not award adequate compensation to plaintiffs under the circumstances.

So, what can you do?

Well, for starters, you can refuse to sign an agreement that forces you into mandatory arbitration.

However, if you are an agent under a Power of Attorney and are trying to make sure your parents or grandparents get the care they need, you may be able to handle this situation in a non-confrontational way.

Specifically, a Power of Attorney is a document that allows an agent to make certain decisions on behalf of a principal when he or she is unavailable or unable to do so.  The decisions that can be legally made are written into the actual Power of Attorney document.  Many of these instruments including language that reads as follows:

Claims, Lawsuits, Compromise and Miscellaneous Powers.  To pursue claims and litigation, including, without limitation:

            To demand, sue for, levy, collect, and give proper receipts for all sums of money or property now or which may hereafter become due me from any source whatsoever, including all estates or trusts, proceeds of insurance policies or other property of any kind whatsoever.

Our firm’s Estates, Wills and Trusts practice group has already started advising POA holders to include new language in their POA documents that limits the authority of agents to agree to arbitration for claims arising in the nursing home context, as seen below:

            Notwithstanding the above, this Power of Attorney expressly prohibits the agent from entering into pre-dispute arbitration and from entering into an agreement that contains an arbitration agreement with, including but not limited to, any medical, healthcare, assisted living, long term care, nursing, or skilled nursing facility.

So, if a Power of Attorney document allows the agent to make health care decisions on behalf of the principal, but does not allow the agent to waive the right to a trial by jury, an agent can admit their loved one into a hospital without forcing a subsequent arbitration (rather than a jury trial) in the event that the nursing home behaves negligently and causes injuries to some of the most susceptible members of society. Recent cases suggest that this would be true even if the Admission Agreement that is signed by the agent includes an Arbitration Clause, because the agent would not have standing to agree to such an arbitration clause.

Even if you have already signed off on an Admissions Agreement with an Arbitration Clause, good lawyers may be able to keep the case in the court system or otherwise invalidate or nullify those clauses, which would allow claims to proceed towards a jury trial, rather than forced, one-side and expensive Arbitration.

For more information, call a member of our legal team at 610-565-3701 or submit an online inquiry.