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Commentary & Opinion

Blair Horner: Privatizing America's Legal System

You see them everywhere – requirements that consumers go to an arbitration system instead of the courts.  If you look in your car’s manual, those arbitrations are mandatory, when you look at the fine print on your smart phones, they are there too.  If you want the car, or the phone, you have to agree to give up your right to go to court and resolve disputes through an arbitration system set up by the companies.

And while some may argue that these are bad practices, the cost to the consumer is financial.  Yet, as these arbitration practices move into more and more consumer contracts, the consequences could be much more severe.

According to a series written in the New York Times, nursing homes have begun to force residents into arbitration when a resident suffers harm from neglect or abuse.  That’s right, if an elderly person needs to be placed in a nursing home, he or she may have to give up their legal rights – or go somewhere else.

Thus, if a nursing home resident is harmed by a nursing home employee, the resident ends up having a private arbitrator – chosen by the nursing home – hear the case.  That’s a huge conflict.

Overturning a bad decision by an arbitrator borders on impossible – even if it’s dead wrong.  As one court noted, “a court’s conviction that the arbitrator has committed serious error” is not enough to overturn the decision as long as the arbitrator “is even arguably construing or applying the contract.” 

Under these circumstances, an injured nursing home resident’s chances of getting justice are slim to none.

And without proper justice, the injured nursing home resident will suffer as critical basic needs go unmet. These may include the need for better quality care, health insurance co-payments, transportation or equipment costs, care not covered by insurance, or other help.

The rest of us also suffer because if fewer claims get fully investigated, “bad actors” are not brought to light and harmful wrongdoing against vulnerable people is allowed to continue.  And in what is right out of Kafka, there’s no public record of private arbitration decisions, so no one can review the types of claims being brought against nursing homes and how they are decided.

People who seek residency in a nursing home typically have little or no choice about where they go for the care they need, so refusing to sign such a contract – or even expressing reluctance to do so – is not a practical option. 

Nursing home residents are by definition vulnerable.  The decision to enter a nursing home is fraught with emotion and often made under extreme time pressure.  Yet when they do so, they must entrust the nursing home with their very safety. 

Given these circumstances, nursing homes should never pressure residents to give up their right to go to court.  Yet this is exactly what is happening. 

And it is wrong. 

New York State agrees.  Long ago, it amended the state law to ban forced arbitration clauses in nursing home contracts.

But recent litigation is threatening this protection, with nursing homes claiming that a federal law (originally intended for business contracts) preempts New York’s, blocking state lawmakers from protecting nursing home residents.

At the national level, the situation is so problematic that the federal government is proposing to impose some restrictions on the practice. 

The bottom line is that forced arbitration agreements are all wrong for the nursing home setting.

After all, if arbitration were beneficial for nursing home residents, why make it mandatory?  Let residents (or their personal family representatives) decide voluntarily whether or not to choose it, on a case-by-case basis, after – not before – something really bad happens.

Blair Horner is the Legislative Director of the New York Public Interest Research Group.

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.

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