by Michael Fedalen
Injuries and abuse in nursing homes because of under-staffing and neglect are all too common. In the past, victims in nursing homes had limited recourse or recoverable damages. Under traditional tort principles, pain and suffering damages do not survive the victims’ death. This created a perverse situation where it was better for nursing homes if residents did not survive injuries. Even when victims survived, their lack of earning potential and generally short expected life spans, both typically used to measure monetary damages, limited any meaningful consequences for nursing facilities. Families of victims who died were similarly limited in their ability to recover damages.
In response to this problem, the California Legislature passed the Elder Abuse and Dependent Adult Civil Protection Act. However, since its passage, the nursing home industry has worked to evade liability by pushing arbitration agreements on residents and lending its significant financial leverage towards enforcing these agreements.
Often when people move into nursing homes they no longer possess the mental wherewithal to understand contractual paperwork. Nonetheless, when no one else is present to sign for them, or when the nursing home has careless or pernicious motives, elders are often made to sign arbitration agreements.
Even when a person holding power of attorney or a relative is asked to sign, it is often implied that the agreement is a condition of admittance. As nursing homes are a last resort for many, believing that the home could become unavailable if an arbitration agreement is refused contributes toward obtaining compliance.
ARBITRATION AGREEMENT PROBLEMS
There are four primary problems with the agreements:
(1) Arbitrators are private professionals working for profit.
While the majority of arbitrators are honest and seek to avoid bias, that is not always possible. Most nursing home claims are defended by a small number of firms working on behalf of insurance companies, and the attorneys involved tend to know the arbitrators. Both nursing home and injured party have a say in selecting the arbitrator. There are not many repeat victims of nursing home abuse, but the same nursing homes, with the same attorneys, often have more than one case per year. Arbitrators who are tough on abuse are not likely to be hired again.
(2) Enhanced damages are generally unavailable.
Traditional principles governing damages for wrongful injuries do not work well in a nursing home context. One of the major reasons the Act was passed was to make attorneys’ fees available in cases of elder abuse. This has increased the pool of recoverable damages available, so that compensation to the victim is fair and attorneys are more willing to accept these cases for clients who cannot afford hourly billing.
(3) Arbitration is private.
nursing home abuse records are public. There is a public benefit to accessing accurate information about rates of abuse within nursing homes. This benefit becomes meaningless when victims are forced to arbitrate because accurate information becomes unavailable.. While elder abuse settlements are not confidential under California law, arbitration tends to keep the information from being effectively reported. Code of Civil Procedure Section 2017.310.
(4) Victims are unlikely to prove their cases.
The rights to discover information related to claims and defenses in a case are broad in California. If a nursing home abuse case is being heard in court, the plaintiff can access nursing home records, and may take the depositions of any person with relevant knowledge. In arbitration, parties are limited to whatever information the arbitrator decides they may access, which is often inadequate to prove a case.
FEDERAL ARBITRATION ACT
California courts have shown willingness to refuse to enforce nursing home arbitration agreements on the basis of unconscionability for being overly harsh, one-sided, or unduly oppressive. Unconscionability is a standard contract defense that seems to apply under these circumstances.
However, federal courts have consistently rebuked California for its resistance to enforcing the agreements by holding that these efforts are preempted by the Federal Arbitration Act.(Att v. Concepcion). . California attempted to make all pre-dispute nursing home arbitration agreements unenforceable, but the FAA preempted this effort as well. (Valley View Health Care v. Chapman)
Arbitration agreements cannot be a condition of admission and they can be combated by not signing. When there is concern about being denied admission, , a possible approach is that somebody who lacks authority signs the agreement. For example, spouses and next of kin do not have legal authority to bind a parent/spouse. (Flores V. Evergreen at SD, LLC). Principals can also grant a power of attorney that excludes the authority to enter into arbitration agreements, and can then have the person with power of attorney sign.
People who take these steps will find themselves in much better positions if disputes arise.