Nursing Homes Will be Barred From Using Arbitration Agreements

Death is a part of life and that’s even more true in certain places of our communities, such as hospitals and nursing homes. It’s expected that most people will die there or shortly after their stay, but there are still plenty of deaths happening in these places that are preventable.

Liability insurance for the medical industry is much higher than other industries because they need to protect themselves from angry family members looking for someone to blame for their loss. Sometimes they’re just lashing out, but all too frequently, the families have a legitimate complaint and now many of them are claiming that nursing homes have been working to keep allegations against them out of the public eye.

Over the past decade or so, an increasing number of businesses, including nursing homes, have been including arbitration agreements in both their employment and service contracts. The result is that it has become nearly impossible for consumers to do anything without signing away their right to take the company to court in the event of a legal dispute.

Arbitration was created as a way for businesses to settle disputes between themselves without cluttering the courts with their lawsuits. It is a private process that is much less formal, and often less neutral, than our current legal system. For example, is common for negotiations to take place in the offices of an attorney representing one of the parties.

For years companies have been exploiting this loophole to require everyone who does business with them, including individual consumers and employees, to give up their right to sue and instead agree to handle all disputes via arbitration.

There are several problems with this, including the fact that arbitration is not equipped to handle class action or collective action lawsuits, which automatically blocks a lot of claims by individuals that are too small to justify the costs of filing a lawsuit. Class actions allow multiple plaintiffs with similar claims against a common defendant to combine their claims into one large lawsuit, but arbitration does not allow that possibility. There is also no opportunity to appeal an arbitrator’s decision.

Although companies have been arguing that arbitration agreements save legal costs and result in higher awards for the plaintiffs, the truth is many disputes don’t even see the light of day as a result of arbitration agreements. It looks suspiciously like the only ones saving money on legal costs are the companies.

The ramifications for nursing homes that require arbitration agreements are clear. Even if a plaintiff succeeds in settling their claim, the nursing home doesn’t have to do anything other than pay to settle the dispute. Whereas a court might order the nursing home to change its practices to prevent further accidents, an arbitrator does not have that power.

Claims in arbitration also never get publicized, regardless of whether they’re successful. This means that, for those looking for a nursing home with which to trust their loved ones, no amount of research will reveal any allegations against the company of neglect or abuse because they all went into private arbitration.

But that’s all about to change, thanks to a new rule issued by the Health and Human Services Department, a federal agency that decides what happens to more than $1 trillion in funding from Medicaid and Medicare. The new rule says that no nursing home that makes arbitration agreements mandatory will receive federal funding. The decision is a huge victory for consumer advocates all over the country, who can only hope other industries will follow.

Our Oak Brook and Palatine, Illinois consumer rights private law firm handles individual and class action gift card, data breach, privacy rights, deceptive advertising, predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totaling over a million dollars to organizations including the National Association of Consumer Advocatesthe National Consumer Law Center, and local law school consumer programs. The Chicago consumer lawyers at Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

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