How Arbitration Agreements Limit Accountability in Assisted Living Facilities
Choosing an assisted living facility for a loved one is a major decision. Families often spend countless hours researching options, visiting communities, and reviewing care plans. The process can feel overwhelming, with a mountain of paperwork to sign. Among the many documents, there’s one that deserves special attention: the arbitration agreement.
These agreements, which are becoming increasingly common, are a significant component of residency contracts. They outline how any disputes between a resident and the facility will be handled. While they may seem like just another form to sign, experts say they have serious implications, potentially limiting a family’s ability to hold a facility accountable when something goes wrong.
What Are Arbitration Agreements?
An arbitration agreement is a legally binding contract where both parties agree to resolve any future disputes through an impartial third party, known as an arbitrator, rather than in a traditional court setting.
When a family signs this agreement, they are waiving their right to a trial by a judge or jury. The arbitrator’s decision is usually final and legally binding, meaning there’s little to no opportunity for an appeal.
Many people don’t fully grasp the weight of these agreements. It’s easy to assume they apply to minor issues, like a misplaced item or a billing disagreement. However, in many cases, they can extend to serious allegations of neglect or wrongful death. This is why it’s so important to understand the terms before you sign.
Freepik | Wavebreak Media | An arbitration agreement is a contract to resolve disputes out of court via an arbitrator.
The Challenges of Forced Arbitration
Critics of these agreements argue that they create an uneven playing field. The process itself is fundamentally different from a court case, and not in a way that favors the resident.
1. Financial Hurdles
In arbitration, the parties involved are responsible for paying the arbitrator’s fees, which can run into the thousands of dollars. This can be a major barrier for families, especially compared to court filings which often have much lower fees.
2. Limited Transparency
Unlike public court proceedings, arbitration is a private process. This means that a facility’s alleged misconduct, and any resulting settlement, often remains confidential. This lack of public record can prevent other families from learning about a facility’s history of issues.
3. A Biased System?
While arbitrators are supposed to be neutral, some critics point out that facilities often use the same arbitrators repeatedly. This repeated business relationship can create a perceived or actual bias, potentially favoring the facility’s interests.
4. Lower Payouts
Even in cases where an arbitrator rules in favor of the plaintiff, the awards tend to be significantly lower than what a jury might grant. This can leave families with less compensation to cover medical bills, funeral costs, and other damages.
Your Right to Decline
One of the most important things to know is that families are generally not required to sign an arbitration agreement as a condition of admission to an assisted living facility. These agreements are often presented as “voluntary.” A facility cannot legally deny a person a spot just because they refuse to sign one.
Families should take the time to read every document carefully and ask questions. If a facility’s staff is pushy or evasive about the terms, that may be a sign to proceed with caution. Some states, like Minnesota, have taken steps to require facilities to clearly and conspicuously disclose the terms of these agreements. However, this is not a universal standard.
Arbitration vs. Litigation
It’s helpful to understand the key differences between these two legal processes. In litigation, a case is heard by a judge and jury in a public courtroom. Both sides can call numerous witnesses, present a wide range of evidence, and appeal the decision if they believe there was an error. This public forum allows for greater transparency and accountability.
Arbitration, in contrast, is more like a private, informal hearing. The rules of evidence are often relaxed, and the arbitrator’s decision is final. While proponents of arbitration suggest it’s a faster and cheaper way to resolve disputes, critics argue that this speed and lower cost often come at the expense of a fair and transparent process for the resident and their family.
Federal and State Regulations
Freepik | The Yuri Arcurs Collection | Arbitration clauses in assisted living contracts can limit your right to sue, so understand them and know you can opt out.
The regulatory landscape for arbitration agreements in assisted living is not always clear. Assisted living facilities are typically regulated at the state level, not by the federal government, which can lead to a patchwork of rules.
For example, the federal government has specific requirements for arbitration in nursing homes, including a rule that they cannot deny admission to a resident who refuses to sign. They also give residents a 30-day window to change their mind after signing.
While many assisted living facilities have adopted similar standards, they are not legally bound to them. This makes it crucial for families to research the specific regulations in their state. The fight for greater consumer protection is ongoing, with some state commissions and attorney generals advocating for stricter rules, including a ban on mandatory arbitration as a condition of admission.
The Importance of Due Diligence
Arbitration agreements can be a significant part of the assisted living contract. They have the potential to profoundly impact a family’s legal options in the event of a dispute. By understanding the implications of these clauses, asking questions, and knowing that you have the right to decline, you can make a more informed decision.
Being aware and proactive is the first and most important step in protecting the well-being and rights of your loved one.