Court Declines to Enforce Nursing Home’s Arbitration Clause

Many nursing homes insert mandatory arbitration clauses in their contracts with elderly patients.

They do not do so for the benefit of the elderly.

If you read the fine print on almost any standard contract a large company makes a consumer sign, you will most likely find a clause that any dispute between the consumer and the company concerning the contract must be submitted to arbitration.

Increasingly, nursing homes and other elder care facilities are also inserting these clauses in their contracts.

Companies are quick to note that arbitration is normally faster and cheaper than going to court.

However, consumer advocates and elder law attorneys point out that these clauses do not necessarily benefit consumers. In reality, arbitration can make it more difficult for consumers to prevail and remedies that might be available in court are sometimes not available in arbitration.

The Wills, Trusts & Estates Prof Blog reports that a court in Arizona recently refused to enforce the arbitration clause in one nursing home's contract in "Arizona Court Overturns Home Arbitration Agreement."

In this case, the man who signed the contract on behalf of his mother did not have any legal authority to bind her to arbitration. He was not her power of attorney.

Going further, the court also signaled that such a ruling could apply more broadly. According to the court, the arbitration clause could be seen as an unenforceable contract of adhesion.

As the article notes, in many states consumers have a legal right to strike out the arbitration clauses before signing the contracts.

If you have any questions about nursing homes and arbitration in your state, consult with an elder law attorney before you sign.

Reference: Wills, Trusts & Estates Prof Blog (Feb. 2, 2016) "Arizona Court Overturns Home Arbitration Agreement."