Arbitration is a process for settling disputes that is outside the court system. Instead of a judge or jury coming to a verdict, trained arbiters will resolve the situation. Pre-dispute arbitration means the consumer agrees to use arbitration to settle any disputes before they even happen. In the context of nursing homes, this means that residents or their families forego their right to a judge or jury trail if their nursing home has violated the law.

Before it was outlawed in 2019, some long-term care facilities (mainly nursing homes) required applicants to sign pre-dispute arbitration agreements in order to be admitted. Now, long-term care facilities can still ask applicants to sign arbitration agreements, but they can no longer be a prerequisite for admission, also known as a “forced arbitration agreement.”

Seniors and their families should be wary of pre-dispute arbitration agreements for several reasons:

• They prevent consumers from being able to make informed choices. No one can predict the future, so an agreement that requires you to relinquish your future legal rights is unfair.
• Pre-dispute arbitration agreements are predatory. They take advantage of consumers at their most vulnerable. At this potentially stressful time in their lives, people may not be aware of all they’re signing. They may not fully appreciate the consequences of abandoning their right to use the traditional legal system.
• They inherently favor the long-term care facilities. Typically, the arbitrators are hired by the long-term care facility, which creates a conflict of interest because it gives them motivation to decide in favor of the facility.
• Arbitration can be expensive. It’s a common misconception that arbitration is less expensive than going to court. In fact, arbitration can be more expensive than going to court. Not only will the consumer need to hire a lawyer in many arbitration cases, they will also have to pay for part of the arbitrator’s fee. Because of the cost, arbitration may not be an option for some consumers, leaving them with no recourse at all in the event they suffer damages.
• They make it easy to hide poor care. Often, arbitration decisions are not a matter of public record. This makes them confidential, creating a loophole that allows facilities to hide unsafe practices and abuse. If a facility can not be held accountable for its poor care, chances are that care and the people receiving it will suffer.

Thankfully, the Forced Arbitration Injustice Repeal (FAIR) Act put an end to pre-dispute arbitration agreements being a condition for admission or continued care at all federally-funded long-term care facilities in September of 2019.

If you’re worried that you or your loved one is being forced to sign an arbitration agreement in order to be accepted at a nursing home, connect with our team of professionals at Eldercare Resource Planning. We can make sure you understand what the agreement is asking and what might happen if you do or don’t sign it.