by Jack Zemlicka
August 24, 2009
Binding arbitration clauses are nothing new, popping up in everything from cell phone agreements to credit card contracts.
But they are becoming increasingly more common in Wisconsin, especially in the nursing home industry.
Trial lawyers claim that many nursing home residents and their families are being faced with mandatory arbitration clauses when they try to take the corporations to court.
According to attorney Jeffrey A. Pitman, in many instances clients are unaware of what they have signed.
“It’s not until something tragic happens that the nursing home raises the issue of ‘well, you signed a binding arbitration agreement even if you had no recollection of doing it,’” said Pitman, who leads the nursing home abuse and neglect practice at Pitman, Kyle & Sicula SC in Milwaukee.
Generally, challenges to these agreements have been unsuccessful.
Attorney M. Angela Dentice represents clients in nursing home negligence cases, but has yet to challenge an arbitration clause.
“My understanding is they are difficult to get out of,” she said.
Pitman said that one of the few arguments that might allow a plaintiff to successfully challenge an arbitration agreement is if one of the parties failed to properly fill out the paperwork for admittance.
“I actually had a situation where a facility moved to enforce an agreement, but they hadn’t signed it,” he said. “They agreed not to move to enforce.”
Attorney Robert F. Johnson of Cook & Franke SC in Milwaukee, who represents nursing homes, agreed that an arbitration clause can generally only be avoided due to a “technical issue.”
He said that patients are not required to accept binding arbitration to be admitted to a nursing home, but once someone agrees to the terms, any claims, “no matter how simple or complicated,” are subject to arbitration.
“From our perspective, they are enforceable,” Johnson said.
But that could change.
In March, Wisconsin Sen. Herb Kohl introduced the Fairness in Nursing Home Arbitration Act, which provides that a pre-dispute arbitration agreement between a long-term care facility and a resident, or person acting on the resident’s behalf, shall not be valid or specifically enforceable.
The legislation has been referred to the Senate Committee on the Judiciary.
Unfair to the vulnerable?
Mark L. Thomsen, President of the Wisconsin Association for Justice (WAJ) recently issued a statement in support of the measure.
He said that if the bill passes, it “will ensure that arbitration is voluntary and not coerced to resolve disputes.”
Dentice argues that it’s unfair for an elderly person or his or her family not to have the ability to present a claim at trial, simply because at an emotionally vulnerable moment someone agreed to something that wasn’t fully explained.
“I’m shocked that someone actually puts this agreement in front of people who simply sign them and have no idea,” she said.
In his statement, Thomsen recommended that attorneys advise their clients to thoroughly read contracts prior to signing them, or have counsel review them.
Noting that facilities cannot mandate that incoming residents agree to an arbitration clause, Dentice recently advised a client’s daughter to strike an arbitration clause out of an agreement.
“I recommend providing a copy of any agreement required to be signed to counsel, so at the very least the client can be apprised of what it is they are signing,” she said.
Pitman takes his advice one step further when it comes to arbitration clauses.
“Just say no,” he said.